Senator David G. Buxton proposes the following substitute bill:


1     
DISPOSITION OF STATE PROPERTY AMENDMENTS

2     
2024 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: David G. Buxton

5     
House Sponsor: Calvin R. Musselman

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions related to the sale, long-term lease, or other disposition of
10     state property.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     modifies the duties and the authority of the Division of Facilities Construction and
15     Management (division);
16          ▸     modifies provisions related to the purchase, disposal, or exchange of real property
17     owned by the division; and
18          ▸     makes technical and conforming changes.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          This bill provides a special effective date.
23     Utah Code Sections Affected:
24     AMENDS:
25          63A-5b-303 (Superseded 07/01/24), as last amended by Laws of Utah 2023, Chapter
26     329
27          63A-5b-303 (Effective 07/01/24), as last amended by Laws of Utah 2023, Chapters
28     329, 394
29          63A-5b-806, as last amended by Laws of Utah 2022, Chapter 421
30          63A-5b-902, as last amended by Laws of Utah 2023, Chapter 263
31          63A-5b-904, as last amended by Laws of Utah 2022, Chapter 421
32          63A-5b-905, as last amended by Laws of Utah 2022, Chapter 421
33          63A-5b-908, as renumbered and amended by Laws of Utah 2020, Chapter 152
34          63A-5b-909, as last amended by Laws of Utah 2022, Chapter 101
35     

36     Be it enacted by the Legislature of the state of Utah:
37          Section 1. Section 63A-5b-303 (Superseded 07/01/24) is amended to read:
38          63A-5b-303 (Superseded 07/01/24). Duties and authority of division.
39          (1) (a) The division shall:
40          (i) subject to Subsection (1)(b), supervise and control the allocation of space, in
41     accordance with legislative directive through annual appropriations acts, other legislation, or
42     statute, to agencies in all buildings or space owned, leased, or rented by or to the state, except
43     as provided in Subsection (3) or as otherwise provided by statute;
44          (ii) assure the efficient use of all building space under the division's supervision and
45     control;
46          (iii) acquire title to all real property, buildings, fixtures, and appurtenances for use by
47     the state or an agency, as authorized by the Legislature through an appropriation act, other
48     legislation, or statute, subject to Subsection (1)(c);
49          (iv) except as otherwise provided by statute, hold title to all real property, buildings,
50     fixtures, and appurtenances owned by the state or an agency;
51          (v) collect and maintain all deeds, abstracts of title, and all other documents evidencing
52     title to or an interest in property belonging to the state or to the state's departments, except
53     institutions of higher education and the trust lands administration;
54          (vi) (A) periodically conduct a market analysis of proposed rates and fees; and
55          (B) include in a market analysis a comparison of the division's rates and fees with the
56     rates and fees of other public or private sector providers of comparable services, if rates and
57     fees for comparable services are reasonably available;
58          (vii) fulfill the division's responsibilities under Part 10, Energy Conservation and
59     Efficiency, including responsibilities[: (A)] to implement the state building energy efficiency
60     program under Section 63A-5b-1002[; and].
61          [(B) related to the approval of loans from the State Facility Energy Efficiency Fund
62     under Section 63A-5b-1003;]
63          (viii) convey, lease, or dispose of the real property, water rights, or water shares
64     associated with the Utah State Developmental Center [if directed to do so by the Utah State
65     Developmental Center board,] as provided in Subsection 26B-6-507(2); [and]
66          (ix) except as provided in Subsection (2)(c), convey, lease, or dispose of
67     division-owned real property for fair market value, as determined by the division; and
68          [(ix)] (x) take all other action that the division is required to do under this chapter or
69     other applicable statute.
70          (b) In making an allocation of space under Subsection (1)(a)(i), the division shall
71     conduct one or more studies to determine the actual needs of each agency.
72          (c) The division may, without legislative approval, acquire title to real property for use
73     by the state or an agency if [the acquisition cost]:
74          (i) the acquisition cost does not exceed $500,000[.], as estimated by the division; or
75          (ii) the real property is part or all of the consideration received in exchange for
76     division-owned real property conveyed, leased, or disposed of under Subsection (1)(a)(ix).
77          (2) The division may:
78          (a) sue and be sued;
79          (b) as authorized by the Legislature, buy, lease, or otherwise acquire, by exchange or
80     otherwise, and hold real or personal property necessary for the discharge of the division's
81     duties; [and]
82          (c) convey, lease, or dispose of vacant division-owned real property for less than fair
83     market value, subject to the requirements of Part 9, Disposal of Division-owned Real Property;
84     and
85          [(c)] (d) take all other action necessary for carrying out the purposes of this chapter.
86          (3) (a) The division may not supervise or control the allocation of space for an entity in
87     the public education system.
88          (b) The supervision and control of the legislative area is reserved to the Legislature.
89          (c) The supervision and control of capitol hill facilities and capitol hill grounds is
90     reserved to the State Capitol Preservation Board.
91          (d) (i) Subject to Subsection (3)(d)(ii), the supervision and control of the allocation of
92     space for an institution of higher education is reserved to the Utah Board of Higher Education.
93          (ii) The Utah Board of Higher Education shall consult and cooperate with the division
94     in the establishment and enforcement of standards for the supervision and control of the
95     allocation of space for an institution of higher education.
96          (e) (i) Subject to Subsection (3)(e)(ii), the supervision and control of the allocation of
97     space for the courts of record listed in Subsection 78A-1-101(1) is reserved to the
98     Administrative Office of the Courts referred to in Subsection 78A-2-108(3).
99          (ii) The Administrative Office of the Courts shall consult and cooperate with the
100     division in the establishment and enforcement of standards for the supervision and control of
101     the allocation of space for the courts of record listed in Subsection 78A-1-101(1).
102          (4) Before the division charges a rate, fee, or other amount for a service provided by
103     the division's internal service fund to an executive branch agency, or to a service subscriber
104     other than an executive branch agency, the division shall:
105          (a) submit an analysis of the proposed rate, fee, or other amount to the rate committee
106     created in Section 63A-1-114; and
107          (b) obtain the approval of the Legislature as required by Section 63J-1-410 or
108     63J-1-504.
109          Section 2. Section 63A-5b-303 (Effective 07/01/24) is amended to read:
110          63A-5b-303 (Effective 07/01/24). Duties and authority of division.
111          (1) (a) The division shall:
112          (i) subject to Subsection (1)(b), supervise and control the allocation of space, in
113     accordance with legislative directive through annual appropriations acts, other legislation, or
114     statute, to agencies in all buildings or space owned, leased, or rented by or to the state, except
115     as provided in Subsection (3) or as otherwise provided by statute;
116          (ii) assure the efficient use of all building space under the division's supervision and
117     control;
118          (iii) acquire title to all real property, buildings, fixtures, and appurtenances for use by
119     the state or an agency, as authorized by the Legislature through an appropriation act, other
120     legislation, or statute, subject to Subsection (1)(c);
121          (iv) except as otherwise provided by statute, hold title to all real property, buildings,
122     fixtures, and appurtenances owned by the state or an agency;
123          (v) collect and maintain all deeds, abstracts of title, and all other documents evidencing
124     title to or an interest in property belonging to the state or to the state's departments, except
125     institutions of higher education and the trust lands administration;
126          (vi) (A) periodically conduct a market analysis of proposed rates and fees; and
127          (B) include in a market analysis a comparison of the division's rates and fees with the
128     rates and fees of other public or private sector providers of comparable services, if rates and
129     fees for comparable services are reasonably available;
130          (vii) fulfill the division's responsibilities under Part 10, Energy Conservation and
131     Efficiency, including responsibilities[: (A)] to implement the state building energy efficiency
132     program under Section 63A-5b-1002; [and]
133          [(B) related to the approval of loans from the State Facility Energy Efficiency Fund
134     under Section 63A-5b-1003;]
135          (viii) convey, lease, or dispose of the real property, water rights, or water shares
136     associated with the Utah State Developmental Center [if directed to do so by the Utah State
137     Developmental Center board,] as provided in Subsection 26B-6-507(2); [and]
138          (ix) except as provided in Subsection (2)(c), convey, lease, or dispose of
139     division-owned real property for fair market value, as determined by the division; and
140          [(ix)] (x) take all other action that the division is required to do under this chapter or
141     other applicable statute.
142          (b) In making an allocation of space under Subsection (1)(a)(i), the division shall
143     conduct one or more studies to determine the actual needs of each agency.
144          (c) The division may, without legislative approval, acquire title to real property for use
145     by the state or an agency if [the acquisition cost]:
146          (i) the acquisition cost does not exceed $500,000[.], as estimated by the division; or
147          (ii) the real property is part or all of the consideration received in exchange for
148     division-owned real property conveyed, leased, or disposed of under Subsection (1)(a)(ix).
149          (2) The division may:
150          (a) sue and be sued;
151          (b) as authorized by the Legislature, buy, lease, or otherwise acquire, by exchange or
152     otherwise, and hold real or personal property necessary for the discharge of the division's
153     duties; [and]
154          (c) convey, lease, or dispose of vacant division-owned real property for less than fair
155     market value, subject to the requirements of Part 9, Disposal of Division-owned Real Property;
156     and
157          [(c)] (d) take all other action necessary for carrying out the purposes of this chapter.
158          (3) (a) The division may not supervise or control the allocation of space for an entity in
159     the public education system.
160          (b) The supervision and control of the legislative area is reserved to the Legislature.
161          (c) The supervision and control of capitol hill facilities and capitol hill grounds is
162     reserved to the State Capitol Preservation Board.
163          (d) (i) Subject to Subsection (3)(d)(ii), the supervision and control of the allocation of
164     space for an institution of higher education is reserved to the Utah Board of Higher Education.
165          (ii) The Utah Board of Higher Education shall consult and cooperate with the division
166     in the establishment and enforcement of standards for the supervision and control of the
167     allocation of space for an institution of higher education.
168          (e) (i) Subject to Subsection (3)(e)(ii), the supervision and control of the allocation of
169     space for the courts of record listed in Subsection 78A-1-101(1) is reserved to the
170     Administrative Office of the Courts described in Section 78A-2-108.
171          (ii) The Administrative Office of the Courts shall consult and cooperate with the
172     division in the establishment and enforcement of standards for the supervision and control of
173     the allocation of space for the courts of record listed in Subsection 78A-1-101(1).
174          (4) Before the division charges a rate, fee, or other amount for a service provided by
175     the division's internal service fund to an executive branch agency, or to a service subscriber
176     other than an executive branch agency, the division shall:
177          (a) submit an analysis of the proposed rate, fee, or other amount to the rate committee
178     created in Section 63A-1-114; and
179          (b) obtain the approval of the Legislature as required by Section 63J-1-410 or
180     63J-1-504.
181          Section 3. Section 63A-5b-806 is amended to read:
182          63A-5b-806. Division rules on the value of property bought or exchanged --
183     Exception.
184          (1) The division shall, in accordance with Title 63G, Chapter 3, Utah Administrative
185     Rulemaking Act, make rules to ensure that, if the division buys or exchanges real property, the
186     value of the real property is congruent with the proposed price and other terms of the purchase
187     or exchange.
188          (2) The rules:
189          (a) shall establish procedures for determining the value of the real property;
190          (b) may provide that an appraisal, as defined in Section 61-2g-102, demonstrates the
191     real property's value; and
192          (c) may require that the appraisal be completed by a state-certified general appraiser, as
193     defined in Section 61-2g-102.
194          (3) The rules adopted under Subsection (1) do not apply to the purchase or exchange of
195     real property, or an interest in real property[,]:
196          (a) with a value of less than $500,000, as estimated by the division[.]; or
197          (b) if the real property is part or all of the consideration received in exchange for
198     division-owned real property conveyed, leased, or disposed of under Subsection
199     63A-5b-303(1)(a)(ix).
200          Section 4. Section 63A-5b-902 is amended to read:
201          63A-5b-902. Application of part.
202          (1) [The] Except as stated in Subsection (1)(e), the provisions of this part, other than
203     this section, do not apply to:
204          (a) a conveyance, lease, or disposal under Subsection 63A-5b-303(1)(a)(viii);
205          (b) the division's disposal or lease of division-owned property [with] that would
206     otherwise be subject to this part, if the division-owned property has a value under $500,000, as
207     estimated by the division;
208          (c) a conveyance, lease, or disposal of division-owned property in connection with:
209          (i) the establishment of a state store, as defined in Section 32B-1-102; or
210          (ii) the construction of student housing; [or]
211          (d) a conveyance, lease, or disposal of any part of the point of the mountain state land,
212     as defined in Section 11-59-102, by the Point of the Mountain State Land Authority created in
213     Section 11-59-201[.]; or
214          (e) a conveyance, lease, or disposal of division-owned property for fair market value,
215     as determined by the division, under Subsection 63A-5b-303(1)(a)(ix), except that the
216     following sections apply:
217          (i) Section 63A-5b-907.5;
218          (ii) Section 63A-5b-908;
219          (iii) Section 63A-5b-910;
220          (iv) Section 63A-5b-911; and
221          (v) Section 63A-5b-912.
222          (2) Nothing in Subsection [(1)(b) or (c)] (1)(b), (c), or (e) may be construed to diminish
223     or eliminate the division's responsibility to manage division-owned property in the best
224     interests of the state.
225          Section 5. Section 63A-5b-904 is amended to read:
226          63A-5b-904. Division authority with respect to vacant division-owned property --
227     Limitations.
228          (1) Subject to Section 63A-5b-909, the division may:
229          (a) provide for a primary state agency's occupancy or use of vacant division-owned
230     property, if the director determines that the primary state agency's occupancy or use is in the
231     best interests of the state;
232          (b) effect a transfer of ownership or lease of vacant division-owned property, as
233     provided in this section; or
234          (c) refer vacant division-owned property to the Department of Transportation for sale
235     by auction, as provided in Section 63A-5b-908.
236          [(2) (a) The division may effect a transfer of ownership or lease of vacant
237     division-owned property to an applicant for fair market value if the director determines that the
238     transfer of ownership or lease to that applicant is in the state's best interest.]
239          [(b) In determining the state's best interest under Subsection (2)(a), the director may
240     consider:]
241          [(i) the price and financial terms of all qualified proposals; and]
242          [(ii) the relative benefits to the state of the proposed uses of the vacant division-owned
243     property as stated in the qualified proposals.]
244          [(3)] (2) The division may effect a transfer of ownership or lease of vacant
245     division-owned property without receiving fair market value in return if:
246          (a) the director determines that the transfer of ownership or lease is in the best interests
247     of the state;
248          (b) for a proposed transfer of ownership or lease to a local government entity, public
249     purpose nonprofit entity, or private party, the director determines that the local government
250     entity, public purpose nonprofit entity, or private party intends to use the property to fulfill a
251     public purpose;
252          (c) the director requests and receives a recommendation on the proposed transfer of
253     ownership or lease from the Legislative Executive Appropriations Committee;
254          (d) the director communicates the Executive Appropriations Committee's
255     recommendation to the executive director; and
256          (e) the executive director approves the transfer of ownership or lease.
257          [(4)] (3) (a) If the division effects a transfer of ownership of vacant division-owned
258     property without receiving fair market value in return, the division shall require the documents
259     memorializing the transfer of ownership to preserve to the division:
260          (i) in the case of a transfer of ownership of vacant division-owned property to a
261     secondary state agency, local government entity, or public purpose nonprofit entity for no or
262     nominal consideration, a right of reversion, providing for the ownership of the property to
263     revert to the division if the property ceases to be used for the public benefit; or
264          (ii) in the case of any other transfer of ownership of vacant division-owned property, a
265     right of first refusal allowing the division to purchase the property from the transferee for the
266     same price that the transferee paid to the division if the transferee wishes to transfer ownership
267     of the former vacant division-owned property.
268          (b) Subsection [(4)(a)] (3)(a) does not apply to the sale of vacant division-owned
269     property at an auction under Section 63A-5b-908.
270          Section 6. Section 63A-5b-905 is amended to read:
271          63A-5b-905. Notice required before division may effect a transfer of ownership
272     or lease of division-owned property for less than fair market value.
273          (1) Before the division may effect a transfer of ownership or lease of vacant
274     division-owned property for less than fair market value, the division shall give notice as
275     provided in Subsection (2).
276          (2) A notice required under Subsection (1) shall:
277          (a) identify and describe the vacant division-owned property;
278          (b) indicate the availability of the vacant division-owned property;
279          (c) invite persons interested in the vacant division-owned property to submit a written
280     proposal to the division;
281          (d) indicate the deadline for submitting a written proposal;
282          (e) be posted on the division's website for at least 60 consecutive days before the
283     deadline for submitting a written proposal, in a location specifically designated for notices
284     dealing with vacant division-owned property;
285          (f) be posted on the Utah Public Notice Website created in Section 63A-16-601 for at
286     least 60 consecutive days before the deadline for submitting a written proposal; and
287          (g) be sent by email to each person who has previously submitted to the division a
288     written request to receive notices under this section.
289          Section 7. Section 63A-5b-908 is amended to read:
290          63A-5b-908. Referring vacant division-owned property to the Department of
291     Transportation for auction.
292          (1) The division may refer vacant division-owned property to the Department of
293     Transportation for a public auction if:
294          (a) [(i)] for a conveyance, lease, or disposal of vacant division-owned property for less
295     than fair market value:
296          (i) the division has provided notice under Section 63A-5b-905 with respect to the
297     vacant division-owned property; and
298          (ii) the division receives no qualified proposals in response to the notice under Section
299     63A-5b-905;
300          (b) the director determines that:
301          (i) there is no reasonable likelihood that within the foreseeable future:
302          (A) a primary state agency will use or occupy the vacant division-owned property; or
303          (B) a secondary state agency, local government entity, or public purpose nonprofit
304     entity will seek a transfer of ownership or lease of the vacant division-owned property; and
305          (ii) disposing of the vacant division-owned property through a public auction is in the
306     best interests of the state;
307          (c) the director requests and receives a recommendation on the proposed public auction
308     from the Legislative Executive Appropriations Committee;
309          (d) the director communicates the Executive Appropriations Committee's
310     recommendation to the executive director; and
311          (e) the executive director approves the public auction.
312          (2) If the division refers a vacant division-owned property to the Department of
313     Transportation for public auction, the Department of Transportation shall publicly auction the
314     vacant division-owned property under the same law and in the same manner that apply to a
315     public auction of Department of Transportation property.
316          (3) At a public auction conducted under Subsection (2), the Department of
317     Transportation may, on behalf of the division, accept an offer to purchase the vacant
318     division-owned property.
319          (4) The division and the Department of Transportation shall coordinate together to:
320          (a) manage the details of finalizing any sale of the vacant division-owned property at
321     public auction; and
322          (b) ensure that the buyer acquires proper title and that the division receives the net
323     proceeds of the sale.
324          (5) If a public auction under this section does not result in a sale of the vacant
325     division-owned property, the Department of Transportation shall notify the division and refer
326     the vacant division-owned property back to the division.
327          Section 8. Section 63A-5b-909 is amended to read:
328          63A-5b-909. State real property subject to right of first refusal.
329          (1) (a) If Section 78B-6-520.3 applies to vacant division-owned property, the division
330     shall comply with Subsection 78B-6-520.3(3).
331          (b) If a condemnee accepts the division's offer to sell the vacant division-owned
332     property as provided in Section 78B-6-520.3, the division shall:
333          (i) comply with the requirements of Section 78B-6-520.3; and
334          (ii) terminate any process [under this chapter] to convey the vacant division-owned
335     property.
336          (c) A condemnee may waive rights and benefits afforded under Section 78B-6-520.3
337     and instead seek a transfer of ownership or lease of vacant division-owned property under the
338     provisions of this chapter in the same manner as any other person not entitled to the rights and
339     benefits of Section 78B-6-520.3.
340          (2) (a) If Section 78B-6-521 applies to the anticipated disposal of the vacant
341     division-owned property, the division shall comply with the limitations and requirements of
342     Subsections 78B-6-521(2) and (3).
343          (b) If the original grantor or a subsequent bona fide purchaser, or the original grantor's
344     or subsequent bona fide purchaser's assignee, accepts an offer for sale as provided in
345     Subsection 78B-6-521(2)(a), the division shall:
346          (i) sell the vacant division-owned property to the original grantor or subsequent bona
347     fide purchaser, or the original grantor's or subsequent bona fide purchaser's assignee, in
348     accordance with Section 78B-6-521; and
349          (ii) terminate any process under this chapter to convey the vacant division-owned
350     property.
351          (c) An original grantor or subsequent bona fide purchaser, or the original grantor's or
352     subsequent bona fide purchaser's assignee, may waive rights afforded under Section 78B-6-521
353     and instead seek a transfer of ownership or lease of vacant division-owned property [under the
354     provisions of this chapter] in the same manner as any other person seeking a transfer of
355     ownership or lease of vacant division-owned property to which Section 78B-6-521 does not
356     apply.
357          Section 9. Effective date.
358          (1) Except as provided in Subsection (2), this bill takes effect on May 1, 2024.
359          (2) The actions affecting Section 63A-5b-303 (Effective 07/01/2024) take effect on
360     July 1, 2024.