State Codes and Statutes
Statutes > Utah > Title-63j > Chapter-01 > 63j-1-41063J-1-410. Internal service funds -- Governance and review.
(1) For purposes of this section:
(a) "Agency" means a department, division, office, bureau, or other unit of stategovernment, and includes any subdivision of an agency.
(b) "Do not replace vehicles" means a vehicle accounted for in the Division of FleetOperations for which charges to an agency for its use do not include amounts to coverdepreciation or to accumulate assets to replace the vehicle at the end of its useful life.
(c) "Internal service fund agency" means an agency that provides goods or services toother agencies of state government or to other governmental units on a capital maintenance andcost reimbursement basis, and which recovers costs through interagency billings.
(d) "Revolving loan fund" means each of the revolving loan funds defined in Section63A-3-205.
(2) An internal service fund agency is not subject to this section with respect to itsadministration of a revolving loan fund.
(3) An internal service fund agency may not bill another agency for services that itprovides, unless the Legislature has:
(a) reviewed and approved the internal service fund agency's budget request;
(b) reviewed and approved the internal service fund agency's rates, fees, and otheramounts that it charges those who use its services and included those rates, fees, and amounts inan appropriation act;
(c) approved the number of full-time, permanent positions of the internal service fundagency as part of the annual appropriation process; and
(d) appropriated to the internal service fund agency the internal service fund's estimatedrevenue based upon the rates and fee structure that are the basis for the estimate.
(4) (a) Except as provided in Subsection (4)(b), an internal service fund agency may notcharge rates, fees, and other amounts that exceed the rates, fees, and amounts established by theLegislature in the appropriations act.
(b) (i) An internal service fund agency that begins a new service or introduces a newproduct between annual general sessions of the Legislature may establish and charge an interimrate or amount for that service or product.
(ii) The internal service fund agency shall submit that interim rate or amount to theLegislature for approval at the next annual general session.
(5) The internal service fund agency budget request shall separately identify the capitalneeds and the related capital budget.
(6) In the fiscal year that the accounting change referred to in Subsection 51-5-6(2) isimplemented by the Division of Finance, the Division of Finance shall transfer equity created bythat accounting change to any internal service fund agency up to the amount needed to eliminateany long-term debt and deficit working capital in the fund.
(7) No new internal service fund agency may be established unless reviewed andapproved by the Legislature.
(8) (a) Except as provided in Subsection (8)(f), an internal service fund agency may notacquire capital assets unless legislative approval for acquisition of the assets has been included inan appropriations act for the internal service fund agency.
(b) An internal service fund agency may not acquire capital assets after the transfermandated by Subsection (6) has occurred unless the internal service fund agency has adequate
working capital.
(c) The internal service fund agency shall provide working capital from the followingsources in the following order:
(i) first, from operating revenues to the extent allowed by state rules and federalregulations;
(ii) second, from long-term debt, subject to the restrictions of this section; and
(iii) last, from an appropriation.
(d) (i) To eliminate negative working capital, an internal service fund agency may incurlong-term debt from the General Fund or Special Revenue Funds to acquire capital assets.
(ii) The internal service fund agency shall repay all long-term debt borrowed from theGeneral Fund or Special Revenue Funds by making regular payments over the useful life of theasset according to the asset's depreciation schedule.
(e) (i) The Division of Finance may not allow an internal service fund agency'sborrowing to exceed 90% of the net book value of the agency's capital assets as of the end of thefiscal year.
(ii) If an internal service fund agency wishes to purchase authorized assets or enter intoequipment leases that would increase its borrowing beyond 90% of the net book value of theagency's capital assets, the agency may purchase those assets only with money appropriated fromanother fund, such as the General Fund or a special revenue fund.
(f) (i) Except as provided in Subsection (8)(f)(ii), capital assets acquired through agencyappropriation may not be transferred to any internal service fund agency without legislativeapproval.
(ii) Vehicles acquired by agencies from appropriated funds or money appropriated toagencies to be used for vehicle purchases may be transferred to the Division of Fleet Operationsand, when transferred, become part of the Fleet Operations Internal Service Fund.
(iii) Vehicles acquired with funding from sources other than state appropriations oracquired through the federal surplus property donation program may be transferred to theDivision of Fleet Operations and, when transferred, become part of the Fleet Operations InternalService Fund.
(iv) Unless otherwise approved by the Legislature, vehicles acquired under Subsection(8)(f)(iii) shall be accounted for as "do not replace" vehicles.
(9) The Division of Finance shall adopt policies and procedures related to the accountingfor assets, liabilities, equity, revenues, expenditures, and transfers of internal service fundsagencies.
Renumbered and Amended by Chapter 183, 2009 General Session
