Agency Fee Amendments

8
63J-1-410
63J-1-504
0
Agency Fee Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Kay J. Christofferson
Senate Sponsor: Evan J. Vickers
LONG TITLE
General Description:
This bill modifies provisions related to budgetary procedures.
Highlighted Provisions:
This bill:
requires that, before billing another state agency for a good or service, an internal service
fund agency provide specified rate data to the Governor's Office of Planning and Budget
and to the Office of the Legislative Fiscal Analyst;
requires an internal service fund agency to annually report the actual costs and revenue
for each rate, fee, or other amount charged during the preceding fiscal year;
prohibits a fee agency from charging a fee unless the fee agency provides specified fee
data to the Governor's Office of Planning and Budget and to the Office of the Legislative
Fiscal Analyst;
requires a fee agency to annually report the actual costs and revenue for each fee charged
during the preceding fiscal year; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
63J-1-410
, as last amended by Laws of Utah 2025, Chapters 350, 357
63J-1-504
, as last amended by Laws of Utah 2025, Chapter 357
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
63J-1-410
is amended to read:
63J-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 state
government, and includes any subdivision of an agency.
(b)
"Agency cost" means all of an internal service fund agency's direct and indirect costs
and expenses for providing the service for which the internal service fund agency
charges a rate, fee, or other amount under this section, including:
(i)
salaries, benefits, contracted labor costs, travel expenses, training expenses,
equipment and material costs, depreciation expenses, utility costs, and other
overhead costs; and
(ii)
costs and expenses for administering the rate, fee, or other amount.
(b)
(c)
"Do not replace
vehicles
vehicle
" means a vehicle accounted for in the Division
of Fleet Operations for which charges to an agency for
its
the vehicle's
use do not
include amounts to cover depreciation or to accumulate assets to replace the vehicle
at the end of
its
the vehicle's
useful life.
(c)
(d)
"Internal service fund agency" means an agency that
:

(i)
provides goods or services to other agencies of state government or to other
governmental units on a capital maintenance and cost reimbursement basis
, and
which
; and
(ii)
recovers costs through interagency billings.
(e)
"Rate data" means the following information related to a rate, fee, or other amount,
that an internal service fund agency charges or proposes to charge another agency for
services the internal service fund agency provides to the agency:
(i)
the title or purpose of the rate, fee, or other amount;
(ii)
the amount or proposed amount of the rate, fee, or other amount;
(iii)
the estimated total annual revenue from the rate, fee, or other amount;
(iv)
the account or fund into which the rate, fee, or other amount is or will be
deposited;
(v)
the estimated number of times the rate, fee, or other amount will be charged;
(vi)
the internal service fund agency's estimated costs related to the rate, fee, or other
amount;
(vii)
whether the rate, fee, or other amount is intended to cover the internal service
fund agency's costs related to the rate, fee, or other amount;
(viii)
whether the internal service fund agency intends to subsidize the rate, fee, or
other amount to cover the internal service fund agency's costs related to the rate,
fee, or other amount and, if so, the internal service fund agency's justification for
the subsidy;
(ix)
whether the proposed amount of the rate, fee, or other amount exceeds the
internal service fund agency's estimated costs related to the fee and, if so, the
internal service fund agency's justification for the excess fee;
(x)
for a current rate, fee, or other amount that the internal service fund agency
proposes to change:
(A)
the present amount of the rate, fee, or other amount;
(B)
the percent difference between the present amount and the proposed amount
of the rate, fee, or other amount; and
(C)
the reason for the change to the rate, fee, or other amount; and
(xi)
if available, a market analysis of the rate, fee, or other amount, including a
comparison of the amount of the internal service fund agency's rate, fee, or other
amount, and the amount other public or private sector providers charge for a
comparable service.
(d)
(f)
"Revolving loan fund" means
each of the revolving loan funds
the same as that
term is
defined in Section
63A-3-205
.
(2)
An internal service fund agency is not subject to this section with respect to
its
the
internal service fund agency's
administration of a revolving loan fund.
(3)
(a)
An
For a fiscal year that begins before July 1, 2027, an
internal service fund
agency may not bill another agency for services that
it
the internal service fund
agency
provides for each internal service fund operated by the agency, unless the
Legislature has:
(i)
reviewed and approved each internal service fund's budget request;
(ii)
reviewed and approved each internal service fund's rates, fees, and other amounts
that
it charges those who use its
the internal service fund bills the agencies that
use internal service fund agency's
services and included those rates, fees, and
other
amounts in an appropriation act;
(iii)
approved the number of full-time
equivalent
positions of each internal service
fund as part of the annual appropriation process;
(iv)
reviewed the number of full-time equivalent contract employees of each internal
service fund as part of the annual appropriation process; and
(v)
appropriated to the internal service fund agency each internal service fund's
estimated revenue based upon the rates and fee structure that are the basis for the
estimate.
(b)
For a fiscal year that begins on or after July 1, 2027, an internal service fund agency
may not bill another agency for services that the internal service fund agency
provides for each internal service fund operated by the agency, unless:
(i)
on or before September 15 of the fiscal year immediately preceding the fiscal year
in which the internal service fund agency intends to bill another agency, the
internal service fund agency submits to the Governor's Office of Planning and
Budget and to the Office of the Legislative Fiscal Analyst the rate data related to
the rate, fee, or other amount that the internal service fund agency intends to bill;
and
(ii)
the Legislature has:
(A)
reviewed and approved each internal service fund's budget request;
(B)
reviewed and approved each internal service fund's rates, fees, and other
amounts that the internal service fund bills the agencies that use internal
service fund agency's services and included those rates, fees, and other
amounts in an appropriation act;
(C)
approved the number of full-time equivalent positions of each internal service
fund as part of the annual appropriation process; and
(D)
reviewed the number of full-time equivalent contract employees of each
internal service fund as part of the annual appropriation process.
(c)
For purposes of submitting rate data under Subsection
(3)(b)
an internal service fund
agency may group multiple related rates, fees, or other amounts and submit rate data
for the group rather than each individual rate, fee, or other amount, provided the
internal service fund agency:
(i)
determines that the grouping is necessary and does not reduce the quality or
completeness of the rate data; and
(ii)
establishes objective criteria for determining when to group multiple related rates,
fees, or other amounts.
(b)
(d)
If an internal service fund agency operates more than one internal service fund
within the internal service fund agency, the internal service fund agency shall comply
with the
review and approval requirements under Subsection
(3)(a)
requirements of
Subsection
(3)(a)
or
(b)
, as applicable,
for each internal service fund.
(c)
If an internal service fund agency operates an internal service fund and does not get
the approvals required under Subsection
(3)(a)
or
(4)(c)
, the internal service fund
agency shall rebate all rates, fees, and amounts collected to those who use the
services for the rates, fees, and amounts collected that were not approved under
Subsection
(3)(a)
or
(4)(c)
.
(e)
An internal service fund agency that collects a rate, fee, or other amount in violation
of this section shall rebate the collected amount to the agency that paid the rate, fee,
or other amount.
(4)
(a)
An internal service fund agency shall annually submit a report to the Governor's
Office of Planning and Budget and the Office of the Legislative Fiscal Analyst that
includes the following information for each rate, fee, or other amount charged during
the preceding fiscal year:
(i)
the actual amount of the internal service fund agency's agency cost;
(ii)
the actual revenue collected from the rate, fee, or other amount; and
(iii)
the number of times the fee agency collected the rate, fee, or other amount.
(b)
For a report described in Subsection
(4)(a)
, an internal service fund agency may
group multiple related rates, fees, or other amounts and include the information
described in Subsections
(4)(a)(i)
through
(iii)
for the group rather than for each
individual rate, fee, or other amount, provided the internal service fund agency:
(i)
determines that the grouping is necessary and does not reduce the quality or
completeness of the report; and
(ii)
establishes objective criteria for determining when to group multiple related rates,
fees, or other amounts.
(c)
(i)
Subject to Subsection
(4)(c)(ii)
, an internal service fund agency shall submit the
report described in Subsection
(4)(a)
on or before September 15 each year.
(ii)
For any rate, fee, or other amount that is not closed out in time to report by
September 15, the internal service fund agency shall submit the report as soon as
practicable after the rate, fee, or other amount is closed out.
(d)
For the report described in Subsection
(4)(a)
that is due in 2026, the deadline
described in Subsection
(4)(c)(i)
is November 15.
(4)
(5)
(a)
An internal service fund agency may charge a rate, fee, or other amount that
is less than the rate, fee, or other amount established by the Legislature in an
appropriations act if the internal service fund agency first reports to the Governor's
Office of Planning and Budget and the Office of the Legislative Fiscal Analyst the
internal service fund agency's justification for reducing the rate, fee, or other amount.
(b)
Except as provided in Subsections
(4)(c)
(5)(c)
and
(d)
, an internal service fund
agency may not charge
rates, fees, and other amounts that exceed the rates, fees, and
amounts
a rate, fee, or other amount that exceeds the rate, fee, or other amount
approved by the Legislature in an appropriations act.
(c)
(i)
An internal service fund agency that begins a new service or introduces a new
product between annual general sessions of the Legislature may, for that service
or product:
(A)
establish and charge an interim rate
or amount
, fee, or other amount
;
(B)
acquire contract employees, if necessary; or
(C)
do a combination of Subsections
(4)(c)(i)(A)
(5)(c)(i)(A)
and
(B)
.
(ii)
The internal service fund agency shall:
(A)
submit the interim rate
or amount
, fee, or other amount
under Subsection
(4)(c)(i)
(5)(c)(i)

to the Legislature for approval at the next annual general
session; and
(B)
report any change in the number of contract employees under Subsection
(4)(c)(i)
(5)(c)(i)
to the appropriate legislative appropriations subcommittee for
review.
(d)
An internal service fund agency may, in a fiscal year, charge rates, fees, and other
amounts that exceed the rates, fees, or amounts approved by the Legislature in an
appropriations act, if:
(i)
during the immediately preceding annual general session, the Legislature
appropriates money to each state agency to pay for an increase in the state
agency's employee's compensation;
(ii)
within 90 days after the day on which the Legislature adjourns the general session
sine die, the internal service fund agency submits a proposed increased rate
schedule to the rate committee established in Section
63A-1-114
that adjusts the
rates, fees, and amounts approved by the Legislature to reflect the percentage
increase that the Legislature appropriated for state agency employee compensation
under Subsection
(4)(d)(i)
(5)(d)(i)
;
(iii)
the rate committee approves the proposed increased rate schedule described in
Subsection
(4)(d)(ii)
(5)(d)(ii)
during the meeting described in Subsection
63A-1-114(4)
; and
(iv)
the internal service fund agency uses all the revenue from the rate schedule
increase under this Subsection
(4)(d)
(5)(d)
to increase the internal service fund
agency's employee's compensation in an amount equivalent to the state agency
employee compensation increase described in Subsection
(4)(d)(i)
(5)(d)(i)
.
(5)
(6)
The internal service fund agency budget request shall separately identify the capital
needs and the related capital budget.
(6)
(7)
In the fiscal year that the accounting change referred to in Subsection
51-5-6(2)
is
implemented by the Division of Finance, the Division of Finance shall transfer equity
created by that accounting change to any internal service fund agency up to the amount
needed to eliminate any long-term debt and deficit working capital in the fund.
(7)
(8)
No new internal service fund agency may be established unless reviewed and
approved by the Legislature.
(8)
(9)
(a)
Except as provided in Subsection
(8)(f)
(9)(f)
, an internal service fund
agency may not acquire capital assets unless legislative approval for acquisition of
the assets has been included in an appropriations act for the internal service fund
agency.
(b)
An internal service fund agency may not acquire capital assets after the transfer
mandated by Subsection
(6)
(7)
has occurred unless the internal service fund agency
has adequate working capital.
(c)
The internal service fund agency shall provide working capital from the following
sources in the following order:
(i)
first, from operating revenues to the extent allowed by state rules and federal
regulations;
(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
incur long-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 the
General Fund or Special Revenue Funds by making regular payments over the
useful life of the asset according to the asset's depreciation schedule.
(e)
(i)
The Division of Finance may not allow an internal service fund agency's
borrowing to exceed 90% of the net book value of the agency's capital assets as of
the end of the fiscal year.
(ii)
If an internal service fund agency wishes to purchase authorized assets or enter
into equipment leases that would increase its borrowing beyond 90% of the net
book value of the agency's capital assets, the agency may purchase those assets
only with money appropriated from another fund, such as the General Fund or a
special revenue fund.
(f)
(i)
Except as provided in Subsection
(8)(f)(ii)
(9)(f)(ii)
, capital assets acquired
through agency appropriation may not be transferred to any internal service fund
agency without legislative approval.
(ii)
Vehicles acquired by agencies from appropriated funds or money appropriated to
agencies to be used for vehicle purchases may be transferred to the Division of
Fleet Operations and, when transferred, become part of the Fleet Operations
Internal Service Fund.
(iii)
Vehicles acquired with funding from sources other than state appropriations or
acquired through the federal surplus property donation program may be
transferred to the Division of Fleet Operations and, when transferred, become part
of the Fleet Operations Internal Service Fund.
(iv)
Unless otherwise approved by the Legislature, vehicles acquired under
Subsection
(8)(f)(iii)
(9)(f)(iii)
shall be accounted for as "do not replace" vehicles.
(9)
(10)
The Division of Finance shall adopt policies and procedures related to the
accounting for assets, liabilities, equity, revenues, expenditures, and transfers of internal
service funds agencies.
Section 2. Section
63J-1-504
is amended to read:
63J-1-504
. Fees -- Adoption, procedure, and approval -- Establishing and
assessing fees without legislative approval -- Report summarizing fees.
(1)
As used in this section:
(a)
(i)
"Agency" means each department, commission, board, council, agency,
institution, officer, corporation, fund, division, office, committee, authority,
laboratory, library, unit, bureau, panel, or other administrative unit of the state.
(ii)
"Agency" does not include:
(A)
the Legislature or a committee or staff office of the Legislature; or
(B)
the Judiciary, as that term is defined in Section
78A-2-310
.
(b)
"
Agency's
Agency
cost" means all of a fee agency's direct and indirect costs and
expenses for providing the goods or service for which the fee agency charges a fee or
for regulating the industry in which the persons paying the fee operate, including:
(i)
salaries, benefits, contracted labor costs, travel expenses, training expenses,
equipment and material costs, depreciation expense, utility costs, and other
overhead costs; and
(ii)
costs and expenses for administering the fee.
(c)
(i)
"Fee agency" means an agency that is authorized to establish and charge a
service fee or a regulatory fee.
(ii)
"Fee agency" does not include an internal service fund agency as defined in
Section
63J-1-410
.
(d)
"Fee data" means the following information related to a current or proposed fee:
(i)
the title or purpose of the fee;
(ii)
the amount or proposed amount of the fee;
(iii)
the estimated total annual revenue from the fee;
(iv)
the account or fund into which the fee is or will be deposited;
(v)
the estimated number of times the fee will be charged;
(vi)
the fee agency's estimated costs related to the fee;
(vii)
whether the fee is a service fee or a regulatory fee;
(viii)
whether the fee is intended to cover the fee agency's costs related to the fee;
(ix)
whether the fee agency intends to subsidize the fee to cover the agency's costs
related to the fee and, if so, the fee agency's justification for the subsidy;
(x)
whether the proposed amount of the fee exceeds the fee agency's estimated costs
related to the fee and, if so, the fee agency's justification for the excess fee; and
(xi)
for a current fee that the fee agency proposes to change:
(A)
the present amount of the fee;
(B)
the percent difference between the present amount and the proposed amount
of the fee; and
(C)
the reason for the change to the fee amount.
(d)
(e)
"Fee schedule" means the complete list of service fees and regulatory fees
charged by a fee agency and the amount of those fees.
(e)
(f)
"Regulatory fee" means a fee that a fee agency charges to cover the agency's cost
of regulating the industry in which the persons paying the fee operate.
(f)
(g)
"Service fee" means a fee that a fee agency charges to cover the agency's cost of
providing the goods or service for which the fee is charged.
(2)
(a)
A fee agency that charges or intends to charge a service fee or regulatory fee shall
adopt a fee schedule.
(b)
A service fee or regulatory fee that a fee agency charges shall:
(i)
be reasonable and fair;
(ii)
reflect and be based on the agency's cost for the fee; and
(iii)
be established according to a cost formula determined by the executive director
of the Governor's Office of Planning and Budget and the director of the Division
of Finance in conjunction with the fee agency seeking to establish the fee.
(3)
Except as provided in Subsection
(9)
, a fee agency may not:
(a)
set fees by rule; or
(b)
create, change, or collect any fee unless the fee has been established according to the
procedures and requirements of this section.
(4)
Each fee agency that is proposing a new fee or proposing to change a fee shall:
(a)
present each proposed fee at a public hearing, subject to the requirements of
Title 52,
Chapter 4, Open and Public Meetings Act
;
(b)
increase, decrease, or affirm each proposed fee based on the results of the public
hearing;
(c)
except as provided in Subsection
(10)
, submit the fee schedule to the Legislature as
part of the agency's annual appropriations request; and
(d)
modify the fee schedule as necessary to implement the Legislature's actions.
(5)
(a)
A fee agency shall submit the fee agency's fee schedule to the Legislature for the
Legislature's approval on an annual basis.
(b)
The Legislature may approve, increase or decrease and approve, or reject any fee
submitted to it by a fee agency in an appropriations act.
(6)
Except as provided in Subsection
(8)
, a fee agency may not charge a fee in an amount
that is different from the amount the Legislature approved under Subsection
(5)
.
(7)
If a fee agency charges a fee in an amount that exceeds the amount the Legislature
approved:
(a)
the fee agency shall make all efforts to refund to each payor the amount the payor
paid that exceeds the amount the Legislature approved; and
(b)
the Division of Finance shall transfer into the General Fund any excess collections
not refunded to payors in accordance with Subsection
(7)(a)
.
(8)
A fee agency may charge a fee that is less than the fee established by the Legislature in
an appropriations act if the fee agency first reports to the Governor's Office of Planning
and Budget and the Office of the Legislative Fiscal Analyst the fee agency's justification
for reducing the fee.
(9)
After conducting the public hearing required by this section, a fee agency may establish
and assess fees without first obtaining legislative approval if:
(a)
(i)
the Legislature creates a new program that is to be funded by fees to be set by
the Legislature;
(ii)
the new program's effective date is before the Legislature's next annual general
session; and
(iii)
the fee agency submits the fee schedule for the new program to the Legislature
for its approval at a special session, if allowed in the governor's call, or at the next
annual general session of the Legislature, whichever is sooner; or
(b)
(i)
the fee agency proposes to increase or decrease an existing fee for the purpose
of adding or removing a transactional fee that is charged or assessed by a
non-governmental third party but is included as part of the fee charged by the fee
agency;
(ii)
the amount of the increase or decrease in the fee is equal to the amount of the
transactional fee charged or assessed by the non-governmental third party; and
(iii)
the increased or decreased fee is submitted to the Legislature for the Legislature's
approval at a special session, if allowed in the governor's call, or at the next
annual session of the Legislature, whichever is sooner.
(10)
(a)
A fee agency that intends to change any fee
for a fiscal year that begins before
July 1, 2027,
shall submit to the governor, as part of the agency's annual
appropriation request a list that identifies:
(i)
the title or purpose of the fee;
(ii)
the present amount of the fee;
(iii)
the proposed new amount of the fee;
(iv)
the percent that the fee will have increased if the Legislature approves the higher
fee;
(v)
the estimated total annual revenue and total estimated annual revenue change that
will result from the changed fee;
(vi)
the account or fund into which the fee will be deposited;
(vii)
the reason for the change in the fee;
(viii)
the estimated number of persons to be charged the fee;
(ix)
the estimated agency's cost related to the fee;
(x)
whether the fee is a service fee or a regulatory fee;
(xi)
whether the fee is intended to cover the agency's cost related to the fee;
(xii)
whether the fee agency intends to subsidize the fee to cover the agency's cost
related to the fee and, if so, the fee agency's justification for the subsidy; and
(xiii)
whether the fee agency set the fee at an amount that exceeds the agency's cost
related to the fee and, if so, the fee agency's justification for the excess fee.
(b)
(i)
The governor may review and approve, modify and approve, or reject the fee
increases.
(ii)
(b)
The governor shall transmit the list required by Subsection
(10)(a)
, with any
modifications, to the legislative fiscal analyst with the governor's budget
recommendations.
(c)
Bills approving any fee change shall be filed before the beginning of the
Legislature's annual general session, if possible.
(11)
(a)
Except as otherwise provided by the Legislature, a fee agency may not charge a
fee, including a current fee, for a fiscal year that begins on or after July 1, 2027,
unless the fee agency submits initial fee data related to the fee:
(i)
to the Governor's Office of Planning and Budget and to the Office of the
Legislative Fiscal Analyst; and
(ii)
on or before the September 15 of the fiscal year immediately preceding the fiscal
year in which the fee agency intends to charge the fee.
(b)
For purposes of submitting fee data under Subsection
(11)(a)
a fee agency may group
multiple current or proposed fees and submit fee data for the group rather than each
individual current or proposed fee, provided the fee agency:
(i)
determines that the grouping is necessary and does not reduce the quality or
completeness of the fee data; and
(ii)
establishes objective criteria for determining when to group multiple related
current or proposed fees.
(c)
The governor may submit any updates to the fee data submitted under this
Subsection
(11)
at the same time the governor submits the governor's budget
recommendations.
(12)
(a)
A fee agency shall annually submit a report to the Governor's Office of Planning
and Budget and the Office of the Legislative Fiscal Analyst that includes the
following information for each fee charged during the preceding fiscal year:
(i)
the actual amount of the fee agency's agency cost;
(ii)
the actual revenue collected from the fee; and
(iii)
the number of times the fee agency collected the fee.
(b)
For a report described in Subsection
(12)(a)
, a fee agency may group multiple fees, if
individual reporting is not practicable.
(c)
For a report described in Subsection
(12)(a)
, a fee agency may group multiple fees
and include the information described in Subsections
(12)(a)(i)
through
(iii)
for the
group rather than for each individual fee, provided the fee agency:
(i)
determines that the grouping is necessary and does not reduce the quality or
completeness of the report; and
(ii)
establishes objective criteria for determining when to group multiple related fees.
(d)
(i)
Subject to Subsection
(12)(d)(ii)
, a fee agency shall submit the report described
in Subsection
(12)(a)
on or before September 15 each year.
(ii)
For any fee that is not closed out in time to report by September 15, the fee
agency shall submit the report as soon as practicable after the fee is closed out.
(e)
For the report described in Subsection
(12)(a)
that is due in 2026, the deadline
described in Subsection (12)(d)(i) is November 15.
(11)
(13)
(a)
Except as provided in Subsection
(11)(b)
(13)(b)
, the School and
Institutional Trust Lands Administration, established in Section
53C-1-201
, is exempt
from the requirements of this section.
(b)
The following fees of the School and Institutional Trust Lands Administration are
subject to the requirements of this section: application, assignment, amendment,
affidavit for lost documents, name change, reinstatement, grazing nonuse, extension
of time, partial conveyance, patent reissue, collateral assignment, electronic payment,
and processing.
Section 3.
Effective Date.
This bill takes effect on
May 6, 2026
.
3-12-26 12:34 PM