Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 172 First Substitute (2022GS)

Sponsor

Sen. Vickers, E.

Final action

Governor Signed 3/22/2022

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• defines terms;
• creates the Higher Education Student Success Endowment (endowment) consisting of funds from the proceeds from the divestment of the Utah Higher Education Assistance Authority's (authority) loan portfolio, among other revenue sources;
• directs the state treasurer to manage the endowment;
• authorizes the Utah Board of Higher Education (board) to expend money from the endowment to advance higher education system priorities;
• enacts board duties in relation to the endowment;
• directs the board to prepare recommendations for discontinuing the authority; and
• makes conforming changes.

Every vote on this bill

Bill text

HIGHER EDUCATION STUDENT ASSISTANCE
AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Evan J. Vickers
House Sponsor: 
Val L. Peterson
LONG TITLE
General Description:
This bill amends and enacts provisions related to the Utah Higher Education Assistance
Authority.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ creates the Higher Education Student Success Endowment (endowment) consisting
of funds from the proceeds from the divestment of the Utah Higher Education
Assistance Authority's (authority) loan portfolio, among other revenue sources;
▸ directs the state treasurer to manage the endowment;
▸ authorizes the Utah Board of Higher Education (board) to expend money from the
endowment to advance higher education system priorities;
▸ enacts board duties in relation to the endowment;
▸ directs the board to prepare recommendations for discontinuing the authority; and
▸ makes conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
51-7-2
, as last amended by Laws of Utah 2021, Chapter 33
53B-12-101
, as last amended by Laws of Utah 2016, Chapter 296
ENACTS:
53B-7-801
, Utah Code Annotated 1953
53B-7-802
, Utah Code Annotated 1953
53B-7-803
, Utah Code Annotated 1953
53B-12-109
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
51-7-2
 is amended to read:
51-7-2.
Exemptions from chapter.
The following funds are exempt from this chapter:
(1) funds invested in accordance with the participating employees' designation or
direction pursuant to a public employees' deferred compensation plan established and operated
in compliance with Section 457 of the Internal Revenue Code of 1986, as amended;
(2) funds of the Utah State Retirement Board;
(3) funds of the Utah Housing Corporation;
(4) endowment funds of higher education institutions
, including funds of the Higher
Education Student Success Endowment, created in Section 
53B-7-801
;
(5) permanent and other land grant trust funds established pursuant to the Utah
Enabling Act and the Utah Constitution;
(6) the State Post-Retirement Benefits Trust Fund;
(7) the funds of the Utah Educational Savings Plan;
(8) funds of the permanent state trust fund created by and operated under Utah
Constitution, Article XXII, Section 4;
(9) the funds in the Navajo Trust Fund;
(10) the funds in the Radioactive Waste Perpetual Care and Maintenance Account;
(11) the funds in the Employers' Reinsurance Fund;
(12) the funds in the Uninsured Employers' Fund;
(13) the Utah State Developmental Center Long-Term Sustainability Fund, created in
Section 
62A-5-206.7
; and
(14) the funds in the Risk Management Fund created in Section 
63A-4-201
.
Section 2. Section 
53B-7-801
 is enacted to read:
Part 8. Higher Education Student Success Endowment
 53B-7-801.
Definitions.
As used in this part:
(1) "Authority" means the Utah Higher Education Assistance Authority.
(2) "Endowment" means the Higher Education Student Success Endowment created in
Section 
53B-7-802
.
Section 3. Section 
53B-7-802
 is enacted to read:
 53B-7-802.
Higher Education Student Success Endowment.
(1) There is created the Higher Education Student Success Endowment.
(2) The endowment consists of:
(a) the proceeds from divestment of the authority's loan portfolio in accordance with
Section 
53B-12-109
;
(b) appropriations made to the endowment by the Legislature, if any;
(c) income from the investment of the endowment; and
(d) other revenues received from other sources.
(3) The board shall account for the receipt and expenditures of endowment money in
accordance with the policies and guidance of the Division of Finance.
(4) (a) (i) The state treasurer shall invest the endowment money with the primary goal
of providing for stability, income, and growth of the principal.
(ii) The state treasurer may deduct any administrative costs incurred in managing
endowment assets from earnings before distributing the earnings.
(b) Nothing in this section requires a specific outcome in investing.
(c) The state treasurer may employ professional asset managers to assist in the
investment of assets of the endowment.
(d) The state treasurer may only provide compensation to asset managers from earnings
generated by the endowment's investments.
(e) The state treasurer shall invest and manage the endowment assets as a prudent
investor would, by:
(i) considering the purposes, terms, distribution requirements, and other circumstances
of the endowment; and
(ii) exercising reasonable care, skill, and caution in order to meet the standard of care
of a prudent investor.
(f) In determining whether or not the state treasurer has met the standard of care of a
prudent investor, the judge or finder of fact shall:
(i) consider the state treasurer's actions in light of the facts and circumstances existing
at the time of the investment decision or action, and not by hindsight; and
(ii) evaluate the state treasurer's investment and management decisions respecting
individual assets not in isolation, but in context of an endowment portfolio as a whole as a part
of an overall investment strategy that has risk and return objectives reasonably suited to the
endowment.
(5) (a) The endowment shall earn interest.
(b) The state treasurer shall deposit the interest or other revenue earned from
investment of the endowment into the endowment.
(6) The board:
(a) may expend money from the endowment for programs that:
(i) advance the system priorities as established in Subsection 
53B-1-402
(2)(a); and
(ii) support prospective students or current students enrolled at an institution, as
described in Section 
53B-2-101
; and
(b) may not expend money from the endowment for a capital expenditure, including
the construction or lease of a capital facility or operation and maintenance of a capital facility.
(7) The board shall ensure that:
(a) money deposited into the endowment is irrevocable and is expended only for
programs that advance the system priorities as established in Subsection 
53B-1-402
(2)(a); and
(b) creditors of the board of directors may not seize, attach, or otherwise obtain assets
of the endowment.
Section 4. Section 
53B-7-803
 is enacted to read:
 53B-7-803.
Board duties.
(1) The board shall:
(a) act as trustee of the endowment and exercise the state's fiduciary responsibilities;
(b) meet at least twice a year to conduct business on behalf of the endowment;
(c) review and approve all endowment policies, projections, rules, criteria, procedures,
forms, standards, and performance goals;
(d) review and approve the budget and expenditures for the endowment in accordance
with Section 
53B-7-802
;
(e) review financial records for the endowment, including endowment receipts,
expenditures, and investments; and
(f) take any other action necessary to perform the board's fiduciary obligations.
(2) The board shall annually submit a budget and expenditures to the Higher Education
Appropriations Subcommittee no later than November 1.
Section 5. Section 
53B-12-101
 is amended to read:
53B-12-101.
Utah Higher Education Assistance Authority designated -- Powers.
The board is the Utah Higher Education Assistance Authority and, in this capacity,
may
, subject to Section 
53B-12-109
,
 do the following:
(1) guarantee 100% of the principal of and interest on a loan to or for the benefit of a
person attending or accepted to attend an eligible postsecondary educational institution to assist
that person in meeting any educational expenses incurred in an academic year;
(2) take, hold, and administer real or personal property and money, including interest
and income, either absolutely or in trust, for any purpose under this chapter;
(3) acquire property for the purposes indicated in Subsection (2) by purchase or lease
and by the acceptance of gifts, grants, bequests, devises, or loans;
(4) enter into or contract with an eligible lending institution, or with a public or private
postsecondary educational institution to provide for the administration by the institution of any
loan or loan guarantee made by it, including application and repayment provisions;
(5) participate in federal programs guaranteeing, reinsuring, or otherwise supporting
loans to eligible borrowers for postsecondary educational purposes and agree to, and comply
with, the conditions and regulations applicable to those programs;
(6) adopt, amend, or repeal rules, in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act, to govern the activities authorized by this chapter;
(7) receive state appropriations for the fund established under Section 
53B-12-104
 to
match deposits and to accept contributions received by it for this purpose;
(8) receive funds from the federal government to assist in implementing federally
supported programs administered under this chapter;
(9) engage, appoint, or contract for the services of officers, agents, employees, and
private consultants to render and perform professional and technical duties and provide
assistance and advice in carrying out the purposes of this chapter, to describe their duties, and
to fix the amount and source of their compensation; and
(10) receive employment information from the Workforce Research and Analysis
Division in accordance with Section 
35A-4-312
 for the purpose of collecting defaulted student
loans made under this chapter. The information obtained under this Subsection (10) shall be
limited to the employer's name, address, and telephone number for borrowers who have
defaulted on a student loan held by the Utah Higher Education Assistance Authority.
Section 6. Section 
53B-12-109
 is enacted to read:
 53B-12-109.
Dissolution of authority -- Higher Education Student Success
Endowment.
(1) As used in this section:
(a) "Authority" means the Utah Higher Education Assistance Authority.
(b) "Board" means the board of directors appointed in accordance with Section
53B-12-102
.
(2) The board of directors shall, no later than November 1, 2022, prepare a written
analysis and recommendations describing:
(a) the most efficient way to discontinue any authority loan servicing and
administration;
(b) a complete accounting of remaining authority assets, real property, outstanding
bonds, and other obligations;
(c) recommendations for reorganizing the board of directors for purposes of
administering the Utah Educational Savings Plan created in Section 
53B-8a-103
;
(d) actions the authority will take to discontinue participation in federal programs
guaranteeing, reinsuring, or otherwise supporting loans for postsecondary educational
purposes; and
(e) efforts the board of directors is taking and will take toward the dissolution of the
authority.
(3) The board shall divest the authority's loan portfolio and deposit the proceeds into
the Higher Education Student Success Endowment, created in Section 
53B-7-802
.
Section 7. 
Effective date.
If approved by two-thirds of all the members elected to each house, this bill takes effect
upon approval by the governor, or the day following the constitutional time limit of Utah
Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
the date of veto override.