Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 128 (2021GS)

Sponsor

Rep. Winder, M.

Final action

Governor Signed 3/11/2021

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• increases the maximum accumulated fund balance allowed in a political subdivision's general fund.

Every vote on this bill

Bill text

LOCAL ACCUMULATED FUND BALANCE AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Mike Winder
Senate Sponsor: 
Wayne A. Harper
LONG TITLE
General Description:
This bill amends provisions related to local accumulated fund balances.
Highlighted Provisions:
This bill:
▸ increases the maximum accumulated fund balance allowed in a political
subdivision's general fund.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
10-5-113
, as last amended by Laws of Utah 2014, Chapter 176
10-6-116
, as last amended by Laws of Utah 2014, Chapter 176
11-13-512
, as enacted by Laws of Utah 2015, Chapter 265
17-36-16
, as last amended by Laws of Utah 2014, Chapter 176
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
10-5-113
 is amended to read:
10-5-113.
Accumulation of retained earnings or fund balance -- Limit as to
general fund -- Reserve for capital improvements.
(1) A town may accumulate retained earnings or fund balances, as appropriate, in any
fund.
(2) The accumulation of a fund balance in the town general fund may not exceed
[
75%
] 
100%
 of the total revenue of the town general fund for the current fiscal period.
(3) (a) The town council may, in a budget year, appropriate from estimated revenue or
excess fund balance in the town general fund to a reserve for capital improvements:
(i) for the purpose of financing future specified capital improvements; and
(ii) in accordance with a formal long-range capital plan adopted by the governing body.
(b) The reserves described in Subsection (3)(a) may accumulate from year to year in a
capital improvements fund until the accumulated total is sufficient to permit economical
expenditure for the specified purposes.
Section 2. Section 
10-6-116
 is amended to read:
10-6-116.
Accumulated fund balances -- Limitations -- Excess balances --
Unanticipated excess of revenues -- Reserves for capital improvements.
(1) (a) A city may accumulate retained earnings or fund balances, as appropriate, in any
fund. With respect to the city general fund only, any accumulated fund balance is restricted to
the following purposes:
(i) to provide working capital to finance expenditures from the beginning of the budget
period until general property taxes, sales taxes, or other applicable revenues are collected,
thereby reducing the amount the city must borrow during the period;
(ii) to provide a resource to meet emergency expenditures under Section 
10-6-129
; and
(iii) to cover a pending year-end excess of expenditures over revenues from an
unavoidable shortfall in revenues.
(b) Notwithstanding Subsection (1)(a)(i), a city may not appropriate a fund balance for
budgeting purposes except as provided in Subsection (4).
(c) Notwithstanding Subsection (1)(a)(iii), a city may not appropriate a fund balance to
avoid an operating deficit during any budget period except as provided under Subsection (4), or
for emergency purposes under Section 
10-6-129
.
(2) The accumulation of a fund balance in the city general fund may not exceed [
25%
]
35%
 of the total revenue of the city general fund for the current fiscal period.
(3) If the fund balance at the close of any fiscal period exceeds the amount permitted
under Subsection (2), the excess shall be appropriated in the manner provided in Section
10-6-117
.
(4) Any fund balance in excess of 5% of the total revenues of the city general fund may
be utilized for budget purposes.
(5) (a) Within a capital improvements fund, the governing body may, in any budget
period, appropriate from estimated revenue or fund balance to a reserve for capital
improvements for the purpose of financing future specific capital improvements, under a
formal long-range capital plan adopted by the governing body.
(b) The reserves described in Subsection (5)(a) may accumulate from fiscal period to
fiscal period until the accumulated total is sufficient to permit economical expenditure for the
specified purposes.
(c) Disbursements from reserves described in Subsection (5)(a) shall be made only by
transfer to a revenue or transfer account within the capital improvements fund, under a budget
appropriation in a budget for the fund adopted in the manner provided by this chapter.
(d) Expenditures from the above appropriation budget accounts shall conform to all
requirements of this chapter relating to execution and control of budgets.
Section 3. Section 
11-13-512
 is amended to read:
11-13-512.
Accumulated fund balances -- Limitations -- Excess balances --
Unanticipated excess of revenues -- Reserves for capital projects.
(1) (a) An interlocal entity may accumulate retained earnings or fund balances, as
appropriate, in any fund.
(b) For the interlocal entity general fund only, an accumulated fund balance at the end
of a budget year may be used only:
(i) to provide working capital to finance expenditures from the beginning of the budget
year until general property taxes or other applicable revenues are collected, subject to
Subsection (1)(c);
(ii) to provide a resource to meet emergency expenditures under Section 
11-13-521
; or
(iii) to cover a pending year-end excess of expenditures over revenues from an
unavoidable shortfall in revenues, subject to Subsection (1)(d).
(c) Subsection (1)(b)(i) may not be construed to authorize an interlocal entity to
appropriate a fund balance for budgeting purposes, except as provided in Subsection (4).
(d) Subsection (1)(b)(iii) may not be construed to authorize an interlocal entity to
appropriate a fund balance to avoid an operating deficit during a budget year except:
(i) as provided under Subsection (4); or
(ii) for emergency purposes under Section 
11-13-521
.
(2) The accumulation of a fund balance in the interlocal entity general fund may not
exceed the greater of:
(a) 100% of the current year's property tax collected by the interlocal entity; or
(b) (i) [
25%
] 
35%
 of the total interlocal entity general fund revenues for an interlocal
entity with an annual interlocal entity general fund budget greater than $100,000; or
(ii) [
50%
] 
65%
 of the total interlocal entity general fund revenues for an interlocal
entity with an annual interlocal entity general fund budget equal to or less than $100,000.
(3) If the interlocal entity general fund balance at the close of a fiscal year exceeds the
amount permitted under Subsection (2), the interlocal entity shall appropriate the excess in the
manner provided in Section 
11-13-513
.
(4) Any interlocal entity general fund balance in excess of 5% of the total revenues of
the interlocal entity general fund may be utilized for budget purposes.
(5) (a) Within a capital projects fund the governing board may, in a budget year,
appropriate from estimated revenue or a fund balance to a reserve account for capital projects
for the purpose of financing future specific capital projects, including new construction, capital
repairs, replacement, and maintenance, under a formal long-range capital plan adopted by the
governing board.
(b) An interlocal entity may allow a reserve amount under Subsection (5)(a) to
accumulate from year to year until the accumulated total is sufficient to permit economical
expenditure for the specified purposes.
(c) An interlocal entity may disburse from a reserve account under Subsection (5)(a)
only by a budget appropriation adopted in the manner provided by this part.
(d) Expenditures from a reserve account described in Subsection (5)(a) shall conform
to all requirements of this part relating to execution and control of budgets.
Section 4. Section 
17-36-16
 is amended to read:
17-36-16.
Retained earnings -- Accumulation -- Restrictions -- Disbursements.
(1) (a) A county may accumulate retained earnings in any enterprise or internal service
fund or a fund balance in any other fund.
(b) Notwithstanding Subsection (1)(a), use of the county general fund shall be
restricted to the following purposes:
(i) to provide cash to finance expenditures from the beginning of the budget period
until general property taxes, sales taxes, or other revenues are collected;
(ii) to provide a fund or reserve to meet emergency expenditures; and
(iii) to cover unanticipated deficits for future years.
(2) (a) The maximum accumulated unappropriated surplus in the county general fund,
as determined prior to adoption of the tentative budget, may not exceed an amount equal to the
greater of:
(i) (A) for a county with a taxable value of $750,000,000 or more and a population of
100,000 or more, [
20%
] 
25%
 of the total revenues of the county general fund for the current
fiscal period; or
(B) for any other county, [
50%
] 
65%
 of the total revenues of the county general fund
for the current fiscal period; and
(ii) the estimated total revenues from property taxes for the current fiscal period.
(b) Any surplus balance in excess of the above computed maximum shall be included
in the estimated revenues of the county general fund budget for the next fiscal period.
(3) Any fund balance exceeding 5% of the total county general fund revenues may be
used for budgetary purposes.
(4) (a) A county may appropriate funds from estimated revenue in any budget period to
a reserve for capital improvements within any capital improvements fund which has been duly
established by ordinance or resolution.
(b) Money in the reserves shall be allowed to accumulate from fiscal period to fiscal
period until the accumulated total is sufficient to permit economical expenditure for the
specified purposes.
(c) Disbursements from the reserves shall be made only by transfer to a revenue
account within a capital improvements fund pursuant to an appropriation for the fund.
(d) Expenditures from the capital improvement budget accounts shall conform to all
requirements of this act as it relates to the execution and control of budgets.