The bill, SB 318, aims to amend the capital outlay process for nonstate entities receiving funding for the acquisition or construction of buildings. It requires these entities to establish, fund, and maintain an escrow account dedicated to long-term major capital maintenance of the project. The escrow account must contain at least 3% of the total project cost, with annual deposits of 0.5% until the account reaches a minimum threshold of either 10% of the total project cost or $1,000,000, whichever is less. Once this threshold is achieved, further deposits are not required unless the account balance falls below 5% due to maintenance expenses.

Additionally, the bill specifies that the construction of buildings includes major repairs, renovations, and necessary equipment. It reduces the required duration for maintaining the escrow account from 30 years to 25 years and mandates that the account be a separate interest-bearing bank account. The bill also outlines consequences for noncompliance, including the project being deemed not feasible and exclusion from future capital outlay considerations. Certain exemptions are provided for land acquisitions and projects exempt from local match requirements. The proposed changes will take effect on July 1, 2024.

Statutes affected:
SB318 Original: 39:1(A)(1), 39:112(E)(4)
SB318 Engrossed: 39:1(A)(1), 39:112(E)(4)
SB318 Reengrossed: 39:1(A)(1), 39:112(E)(4)
SB318 Enrolled: 39:1(A)(1), 39:112(E)(4)
SB318 Act 764: 39:1(A)(1), 39:112(E)(4)