LEGISLATIVE GENERAL COUNSEL H.B. 335
6 Approved for Filing: C.R. Gilbert 6 3rd Sub. (Cherry)
6 02-27-24 9:06 AM 6
Senator Kathleen A. Riebe proposes the following substitute bill:
1 STATE GRANT PROCESS AMENDMENTS
2 2024 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Val L. Peterson
5 Senate Sponsor: Jerry W Stevenson
6
7 LONG TITLE
8 General Description:
9 This bill enacts provisions governing the administration of state grants.
10 Highlighted Provisions:
11 This bill:
12 < defines terms;
13 < provides eligibility requirements for a competitive grant recipient;
14 < requires that a competitive grant recipient provide a proposed budget and agree to
15 deliverables, reporting, audit, and clawback requirements before receiving any grant
16 funds;
17 < addresses the disbursement schedule for grant funds;
18 < provides for review after a specified time of a competitive grant funded by an
19 ongoing appropriation;
20 < prohibits direct award grants, except during a declared state of emergency; and 3rd Sub. H.B. 335
21 < makes technical and conforming changes.
22 Money Appropriated in this Bill:
23 None
24 Other Special Clauses:
25 This bill provides a special effective date.
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26 Utah Code Sections Affected:
27 AMENDS:
28 11-41-102, as last amended by Laws of Utah 2023, Chapters 16, 34
29 63J-1-201, as last amended by Laws of Utah 2021, Chapters 382, 421
30 65A-16-201, as enacted by Laws of Utah 2022, Chapter 78 and further amended by
31 Revisor Instructions, Laws of Utah 2022, Chapter 78
32 65A-16-203, as enacted by Laws of Utah 2022, Chapter 78
33 65A-16-301, as last amended by Laws of Utah 2023, Chapter 205
34 72-2-121, as last amended by Laws of Utah 2023, Chapter 529
35 ENACTS:
36 63G-6b-101, Utah Code Annotated 1953
37 63G-6b-102, Utah Code Annotated 1953
38 63G-6b-201, Utah Code Annotated 1953
39 63G-6b-202, Utah Code Annotated 1953
40 63G-6b-301, Utah Code Annotated 1953
41 REPEALS:
42 63J-1-220, as last amended by Laws of Utah 2023, Chapter 16
43 63N-1a-307, as enacted by Laws of Utah 2022, Chapter 362
44
45 Be it enacted by the Legislature of the state of Utah:
46 Section 1. Section 11-41-102 is amended to read:
47 11-41-102. Definitions.
48 As used in this chapter:
49 (1) "Agreement" means an oral or written agreement between a public entity and a
50 person.
51 (2) "Business entity" means a sole proprietorship, partnership, limited partnership,
52 limited liability company, corporation, or other entity or association used to carry on a business
53 for profit.
54 (3) "Determination of violation" means a determination by the Governor's Office of
55 Economic Opportunity of substantial likelihood that a retail facility incentive payment has been
56 made in violation of Section 11-41-103, in accordance with Section 11-41-104.
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57 (4) "Environmental mitigation" means an action or activity intended to remedy known
58 negative impacts to the environment.
59 (5) "Executive director" means the executive director of the Governor's Office of
60 Economic Opportunity.
61 (6) "General plan" means the same as that term is defined in Section 23A-6-101.
62 (7) "Mixed-use development" means development with mixed land uses, including
63 housing.
64 (8) "Moderate income housing plan" means the moderate income housing plan element
65 of a general plan.
66 (9) "Office" means the Governor's Office of Economic Opportunity.
67 (10) "Political subdivision" means any county, city, town, metro township, school
68 district, special district, special service district, community reinvestment agency, or entity
69 created by an interlocal agreement adopted under Title 11, Chapter 13, Interlocal Cooperation
70 Act.
71 (11) "Public entity" means:
72 (a) a political subdivision;
73 [(b) a state agency as defined in Section 63J-1-220;]
74 (b) a department, commission, board, council, agency, institution, officer, corporation,
75 fund, division, office, committee, authority, laboratory, library, unit, bureau, panel, or other
76 administrative unit of the executive branch of the state;
77 (c) a higher education institution as defined in Section 53B-1-201;
78 (d) the Military Installation Development Authority created in Section 63H-1-201;
79 (e) the Utah Inland Port Authority created in Section 11-58-201; or
80 (f) the Point of the Mountain State Land Authority created in Section 11-59-201.
81 (12) "Public funds" means any money received by a public entity that is derived from:
82 (a) a sales and use tax authorized under Title 59, Chapter 12, Sales and Use Tax Act;
83 or
84 (b) a property tax levy.
85 (13) "Public infrastructure" means:
86 (a) a public facility as defined in Section 11-36a-102; or
87 (b) public infrastructure included as part of an infrastructure master plan related to a
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88 general plan.
89 (14) "Retail facility" means any facility operated by a business entity for the primary
90 purpose of making retail transactions.
91 (15) (a) "Retail facility incentive payment" means a payment of public funds:
92 (i) to a person by a public entity;
93 (ii) for the development, construction, renovation, or operation of a retail facility
94 within an area of the state; and
95 (iii) in the form of:
96 (A) a payment;
97 (B) a rebate;
98 (C) a refund;
99 (D) a subsidy; or
100 (E) any other similar incentive, award, or offset.
101 (b) "Retail facility incentive payment" does not include a payment of public funds for:
102 (i) the development, construction, renovation, or operation of:
103 (A) public infrastructure; or
104 (B) a structured parking facility;
105 (ii) the demolition of an existing facility;
106 (iii) assistance under a state or local:
107 (A) main street program; or
108 (B) historic preservation program;
109 (iv) environmental mitigation or sanitation, if determined by a state or federal agency
110 under applicable state or federal law;
111 (v) assistance under a water conservation program or energy efficiency program, if any
112 business entity located within the public entity's boundaries or subject to the public entity's
113 jurisdiction is eligible to participate in the program;
114 (vi) emergency aid or assistance, if any business entity located within the public entity's
115 boundaries or subject to the public entity's jurisdiction is eligible to receive the emergency aid
116 or assistance; or
117 (vii) assistance under a public safety or security program, if any business entity located
118 within the public entity's boundaries or subject to the public entity's jurisdiction is eligible to
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119 participate in the program.
120 (16) "Retail transaction" means any transaction subject to a sales and use tax under
121 Title 59, Chapter 12, Sales and Use Tax Act.
122 (17) (a) "Small business" means a business entity that:
123 (i) has fewer than 30 full-time equivalent employees; and
124 (ii) maintains the business entity's principal office in the state.
125 (b) "Small business" does not include:
126 (i) a franchisee, as defined in 16 C.F.R. Sec. 436.1;
127 (ii) a dealer, as defined in Section 41-1a-102; or
128 (iii) a subsidiary or affiliate of another business entity that is not a small business.
129 Section 2. Section 63G-6b-101 is enacted to read:
130 CHAPTER 6b. STATE GRANTS
131 Part 1. General Provisions
132 63G-6b-101. Definitions.
133 As use in this chapter:
134 (1) "Administering agency" means a state agency that administers a competitive grant.
135 (2) "Competitive grant" means a grant that is not a direct award grant.
136 (3) "Direct award grant" means a grant that is funded by money that the Legislature
137 intends the state agency to pass through to one or more recipients without a competitive
138 process.
139 (4) (a) "Grant" means a state agency's expenditure of state money, or agreement to
140 expend state money, that is:
141 (i) authorized by law;
142 (ii) made for a particular purpose; and
143 (iii) made without acquiring, or the promise of acquiring, a procurement item in
144 exchange for the expenditure.
145 (b) "Grant" does not include:
146 (i) a tax credit;
147 (ii) an expenditure of federal money;
148 (iii) public assistance, as defined in Section 26B-9-101;
149 (iv) a loan;
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150 (v) a rebate;
151 (vi) an incentive; or
152 (vii) a claim payment.
153 (5) "Grant appropriation" means an appropriation the Legislature makes to an
154 administering agency to be used for one or more competitive grants.
155 (6) "Grant period" means the time frame during which a grant recipient receives funds
156 from a single competitive grant.
157 (7) "Multi-year grant" means a competitive grant for which the grant period exceeds
158 one year.
159 (8) "Nonprofit entity" means an entity that:
160 (a) operates in the state;
161 (b) is not a government entity; and
162 (c) is exempt from federal income taxation under Section 501(c)(3), Internal Revenue
163 Code.
164 (9) "Procurement item" means the same as that term is defined in Section 63G-6a-103.
165 (10) (a) "State agency" means a department, division, or other agency or
166 instrumentality of the state.
167 (b) "State agency" does not include the legislative department.
168 (11) "State money" means money that is derived from state fees or state tax revenue.
169 Section 3. Section 63G-6b-102 is enacted to read:
170 63G-6b-102. Applicability.
171 This chapter does not apply to a grant that is authorized in statute, unless the statute
172 provides that the grant is subject to this chapter.
173 Section 4. Section 63G-6b-201 is enacted to read:
174 Part 2. Competitive Grants
175 63G-6b-201. Eligibility.
176 Except as otherwise provided in the grant appropriation, a person may receive a grant
177 only if the person is a nonprofit entity or a political subdivision.
178 Section 5. Section 63G-6b-202 is enacted to read:
179 63G-6b-202. Requirements for all grants.
180 (1) (a) To award a competitive grant, an administering agency shall:
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181 (i) establish a competitive application and selection process; and
182 (ii) award each competitive grant in accordance with the established process.
183 (b) As part of the competitive application process, the administering agency shall
184 require that each applicant disclose all other state funding the applicant receives.
185 (c) After an administering agency completes a competitive application process for a
186 competitive grant but before the administering agency awards the grant, the administering
187 agency shall report each grant recipient to the legislative fiscal analyst and the Governor's
188 Office of Planning and Budget.
189 (2) (a) An administering agency shall disburse grant funds in accordance with this
190 Subsection (2).
191 (b) Before an administering agency disburses a competitive grant's grant funds, the
192 administering agency shall ensure that the grant recipient provides a detailed budget
193 demonstrating how the grant recipient will use the grant funds.
194 (c) An administering agency shall establish a distribution schedule that ensures
195 accountability and responsible oversight of the use of the grant funds.
196 (d) An administering agency may not:
197 (i) disburse all grant funds in a single payment, unless the administering agency makes
198 the single payment after the grant recipient satisfies the grant recipient's performance
199 obligations under the agreement described in Subsection (5); or
200 (ii) make a grant recipient's final disbursement before the grant recipient delivers the
201 report described in Subsection (4).
202 (3) For a multi-year grant:
203 (a) the grant period may not exceed five years; and
204 (b) in the final quarter of each year of the grant period, excluding the final year, the
205 grant recipient shall deliver to the administering agency a report that details the grant recipient's
206 progress towards fulfilling the grant's purpose, including the annual deliverables and
207 performance metrics described in the agreement made in accordance with Subsection (5).
208 (4) An administering agency may not make the final grant funds disbursement until:
209 (a) the grant recipient delivers to the administering agency a final report that details the
210 extent to which the grant recipient fulfilled the grant's purpose, including the deliverables and
211 performance metrics described in the agreement made in accordance with Subsection (5); and
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212 (b) the administering agency determines that the grant recipient satisfactorily produced
213 each deliverable provided in the agreement described in Subsection (5).
214 (5) Except as otherwise provided in the grant appropriation and consistent with the
215 other provisions of this section, an administering agency may not disburse grant funds to a
216 grant recipient before the administering agency and the grant recipient execute an agreement
217 that contains:
218 (a) the disbursement schedule for the grant funds;
219 (b) the deliverables, reporting, and performance metrics the grant recipient will
220 produce and use to demonstrate that the grant recipient used the grant funds to fulfill the grant's
221 purpose;
222 (c) if the grant is a multi-year grant, annual deliverables and performance metrics the
223 grant recipient will produce and use to demonstrate sufficient progress towards fulfilling the
224 grant's purpose;
225 (d) a provision informing the grant recipient that disbursement of grant funds is subject
226 to legislative appropriation; and
227 (e) the grant recipient's consent to follow-up audit and clawback of the grant funds if
228 an audit shows that the grant funds were inappropriately used.
229 (6) In accordance with Utah Constitution, Article VI, Section 33, the legislative auditor
230 general may audit the use of any grant funds.
231 Section 6. Section 63G-6b-301 is enacted to read:
232 Part 3. Direct Award Grants
233 63G-6b-301. Direct award grants prohibited.
234 (1) Except as provided in Subsection (2), on or after July 1, 2025, the Legislature may
235 not authorize by appropriation, and an administering agency may not award, a direct award
236 grant.
237 (2) The prohibition described in Subsection (1) does not apply during a state of
238 emergency that is declared by:
239 (a) the president of the United States;
240 (b) the governor in an executive order under Title 53, Chapter 2a, Part 2, Disaster
241 Response and Recovery Act; or
242 (c) the chief executive officer of a political subdivision in a proclamation under Title
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243 53, Chapter 2a, Disaster Response and Recovery Act.
244 Section 7. Section 63J-1-201 is amended to read:
245 63J-1-201. Governor's proposed budget to Legislature -- Contents -- Preparation
246 -- Appropriations based on current tax laws and not to exceed estimated revenues.
247 (1) The governor shall deliver, not later than 30 days before the date the Legislature
248 convenes in the annual general session, a confidential draft copy of the governor's proposed
249 budget recommendations to the Office of the Legislative Fiscal Analyst according to the
250 requirements of this section.
251