SB 318 aims to amend the capital outlay process for nonstate entities receiving funding for the acquisition or construction of buildings. The bill requires these entities to establish and maintain an escrow account dedicated to long-term major capital maintenance, with a minimum balance requirement of 3% of the total project cost. The amendments include provisions that define the scope of construction to encompass major repairs, renovations, and necessary equipment, while also adjusting the minimum threshold for the escrow account to either 10% of the total project cost or $1,000,000, whichever is less. Additionally, the bill stipulates that if the escrow account balance falls below 5% after withdrawals for maintenance, the entity must continue to make deposits until the balance is restored to that minimum.

The bill also modifies the duration for which the escrow account must be maintained, reducing it from 30 years to 25 years, and outlines consequences for noncompliance, including the potential exclusion of projects from the Capital Outlay Act. Certain exemptions are provided for land acquisitions and projects exempt from local match requirements. The proposed law will take effect on July 1, 2024, and mandates the division of administration to create rules for implementation, ensuring oversight by relevant legislative committees.

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)