School District Project Financing Amendments

13
11-14-103
11-72-101
11-72-102
0
School District Project Financing Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Tiara Auxier
Senate Sponsor:
LONG TITLE
General Description:
This bill amends the requirements for how a school district may finance and build a school
building or facility.
Highlighted Provisions:
This bill:
requires a school district to pursue voter approval of a general obligation bond before
issuing a lease revenue bond to finance a school building or infrastructure project;
prohibits a school district from establishing a public-private partnership to execute a
school district project; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
11-14-103
, as last amended by Laws of Utah 2024, Chapter 474
ENACTS:
11-72-101
, Utah Code Annotated 1953
11-72-102
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
11-14-103
is amended to read:
11-14-103
. Bond issues authorized -- Purposes -- Use of bond proceeds.
(1)
Any local political subdivision may, in the manner and subject to the limitations and
restrictions contained in this chapter, issue
its
the local political subdivision's

negotiable bonds for the purpose of paying all or part of the cost of:
(a)
acquiring, improving, or extending any one or more improvements, facilities, or
property that the local political subdivision is authorized by law to acquire, improve,
or extend;
(b)
acquiring, or acquiring an interest in, any one or more or any combination of the
following types of improvements, facilities, or property to be owned by the local
political subdivision, either alone or jointly with one or more other local political
subdivisions, or for the improvement or extension of any of those wholly or jointly
owned improvements, facilities, or properties:
(i)
public buildings of every nature, including without limitation, offices,
courthouses, jails, fire, police and sheriff's stations, detention homes, and any
other buildings to accommodate or house lawful activities of a local political
subdivision;
(ii)
waterworks, irrigation systems, water systems, dams, reservoirs, water treatment
plants, and any other improvements, facilities, or property used in connection with
the acquisition, storage, transportation, and supplying of water for domestic,
industrial, irrigation, recreational, and other purposes and preventing pollution of
water;
(iii)
sewer systems, sewage treatment plants, incinerators, and other improvements,
facilities, or property used in connection with the collection, treatment, and
disposal of sewage, garbage, or other refuse;
(iv)
drainage and flood control systems, storm sewers, and any other improvements,
facilities, or property used in connection with the collection, transportation, or
disposal of water;
(v)
recreational facilities of every kind, including without limitation, athletic and play
facilities, playgrounds, athletic fields, gymnasiums, public baths, swimming pools,
camps, parks, picnic grounds, fairgrounds, golf courses, zoos, boating facilities,
tennis courts, auditoriums, stadiums, arenas, and theaters;
(vi)
convention centers, sports arenas, auditoriums, theaters, and other facilities for
the holding of public assemblies, conventions, and other meetings;
(vii)
roads, bridges, viaducts, tunnels, sidewalks, curbs, gutters, and parking
buildings, lots, and facilities;
(viii)
airports, landing fields, landing strips, and air navigation facilities;
(ix)
educational facilities, including without limitation, schools, gymnasiums,
auditoriums, theaters, museums, art galleries, libraries, stadiums, arenas, and
fairgrounds;
(x)
hospitals, convalescent homes, and homes for the aged or indigent; and
(xi)
electric light works, electric generating systems, and any other improvements,
facilities, or property used in connection with the generation and acquisition of
electricity for these local political subdivisions and transmission facilities and
substations if they do not duplicate transmission facilities and substations of other
entities operating in the state prepared to provide the proposed service unless these
transmission facilities and substations proposed to be constructed will be more
economical to these local political subdivisions;
(c)
new construction, renovation, or improvement to a state highway within the
boundaries of the local political subdivision or an environmental study for a state
highway within the boundaries of the local political subdivision; or
(d)
except as provided in Subsection (5), the portion of any claim, settlement, or
judgment that exceeds $3,000,000.
(2)
Except as provided in Subsection (1)(c), any improvement, facility, or property under
Subsection (1) need not lie within the limits of the local political subdivision.
(3)
A cost under Subsection (1) may include:
(a)
the cost of equipment and furnishings for such improvements, facilities, or property;
(b)
all costs incident to the authorization and issuance of bonds, including engineering,
legal, and fiscal advisers' fees;
(c)
costs incident to the issuance of bond anticipation notes, including interest to accrue
on bond anticipation notes;
(d)
interest estimated to accrue on the bonds during the period to be covered by the
construction of the improvement, facility, or property and for 12 months after that
period; and
(e)
other amounts which the governing body finds necessary to establish bond reserve
funds and to provide working capital related to the improvement, facility, or property.
(4)
(a)
Except as provided in Subsection (4)(b), the proceeds from bonds issued on or
after May 14, 2013, may not be used:
(i)
for operation and maintenance expenses for more than one year after the date any
of the proceeds are first used for those expenses; or
(ii)
for capitalization of interest more than five years after the bonds are issued.
(b)
The restrictions on the use of bond proceeds under Subsection (4)(a) do not apply to
bonds issued to pay all or part of the costs of a claim, settlement, or judgment under
Subsection (1)(d).
(5)
Beginning on or after July 1, 2021, a local political subdivision may not issue its
negotiable bonds for a purpose described in Subsection (1)(d).
(6)
(a)
As used in this Subsection (6):
(i)
"Applicable lease revenue bond" means a lease revenue bond in an amount that
exceeds $10,000,000.
(ii)
"Combined total" means the total of all lease revenue bonds issued by a local
political subdivision within any consecutive three-year period.
(b)
(i)
A local political subdivision may not issue a lease revenue bond if the issuance
of the bond will cause the combined total to exceed $200,000,000.
(ii)
The amount of a lease revenue bond to pay for the construction, reconstruction, or
remodeling of a correctional facility, as defined in Section
77-17b-102
, does not
count toward the combined total.
(c)
A school district may not issue a lease revenue bond to pay for the construction,
reconstruction, or remodeling of a school district building or facility unless, in
accordance with Title 11, Chapter 14, Part 2, Bond Elections, the school district first
gives the voters of the school district an opportunity to approve a general obligation
bond, described in Section 11-14-310, to pay for the construction, reconstruction, or
remodeling of the school district building or facility instead of the lease revenue bond.
(c)
(d)
Before issuing an applicable lease revenue bond on or after May 1, 2024, a local
political subdivision shall:
(i)
make a statement at a meeting of the local political subdivision, as provided in
Subsection
(6)(d)
(6)(e)
;
(ii)
as provided in Subsection
(6)(e)
(6)(f)
, publish notice of the proposed issuance
of a lease revenue bond and of the public hearing under Subsection
(6)(f)
(6)(g)
;
and
(iii)
hold a public hearing, as provided in Subsection
(6)(f)
(6)(g)
.
(d)
(e)
(i)
At a regular meeting of the local political subdivision that is held at least
14 days before a public hearing under Subsection
(6)(f)
(6)(f)
, the governing
body of a local political subdivision intending to issue an applicable lease revenue
bond shall make a statement indicating:
(A)
the intent to issue a lease revenue bond; and
(B)
the purpose and estimated amount of the lease revenue bond.
(ii)
The local political subdivision's agenda under Section
52-4-202
for a meeting
described in Subsection
(6)(d)(i)
(6)(e)(i)
shall include a separate item for the
statement required under Subsection
(6)(d)(i)
(6)(e)(i)
.
(e)
(f)
(i)
A local political subdivision intending to issue an applicable lease revenue
bond shall provide notice of the intent to issue a lease revenue bond and of the
public hearing required under Subsection
(6)(f)
(6)(g)
.
(ii)
The notice required under Subsection
(6)(e)(i)
(6)(f)(i)
shall be published:
(A)
subject to Section
45-1-101
, in a newspaper or combination of newspapers of
general circulation in the local political subdivision;
(B)
electronically in accordance with Section
45-1-101
; and
(C)
for the local political subdivision, as a class A notice under Section
63G-30-102
, for at least 14 days immediately before the public hearing under
Subsection
(6)(d)
(6)(e)
.
(iii)
If the local political subdivision intending to issue an applicable lease revenue
bond is a school district, the notice required by Subsection
(6)(e)(i)
(6)(f)(i)
shall
include a statement that contains substantially the following language: "This
proposed lease revenue bond commits money from future property tax and income
tax revenue allocated to the school district. Additionally, a lease revenue bond
generally has a higher interest cost than a voter-approved general obligation bond."
(iv)
The notice described in Subsection
(6)(e)(ii)(A)
(6)(f)(ii)(A)
:
(A)
shall be no less than 1/4 page in size, use type no smaller than 18 point, and be
surrounded by a 1/4-inch border;
(B)
shall be run once each week for the two weeks before a local political
subdivision conducts a public hearing under Subsection
(6)(f)
(6)(g)
; and
(C)
may not be placed in the portion of a newspaper where legal notices and
classified advertisements appear.
(v)
A notice required under Subsection
(6)(e)(i)
(6)(f)(i)
shall:
(A)
contain a clear statement indicating that the local political subdivision intends
to issue a lease revenue bond;
(B)
explain the purpose, proposed amount, and length of term of the lease revenue
bond and the annual amount that the local political subdivision will be required
to pay in principal and interest on the lease revenue bond;
(C)
identify the intended lessee of the facility to be constructed using proceeds
from the lease revenue bond and the expected annual amount of lease
payments that the lessee will pay;
(D)
provide the date, time, place, and purpose of the public hearing under
Subsection
(6)(f)
(6)(g)
; and
(E)
provide the date, time, and place of the local political subdivision governing
body meeting at which the governing body anticipates taking action on the
proposal to issue a lease revenue bond.
(f)
(g)
(i)
A local political subdivision intending to issue an applicable lease revenue
bond shall hold a public hearing on the proposed lease revenue bond.
(ii)
A public hearing under this Subsection
(6)(f)
(6)(g)
:
(A)
shall be held beginning at or after 6:00 p.m.;
(B)
shall be held separate from any other public hearing; and
(C)
may be held the same day as another public hearing, including immediately
before or after the other public hearing.
(iii)
At a public hearing under this Subsection
(6)(f)
(6)(g)
, the governing body of
the local political subdivision shall provide a member of the public desiring to be
heard an opportunity to present testimony on the proposed issuance of a lease
revenue bond:
(A)
within reasonable time limits; and
(B)
without unreasonable restriction on the number of individuals allowed to
make public comment.
Section 2. Section
11-72-101
is enacted to read:
72. Public-Private Partnerships
11-72-101
. Definitions.
As used in this chapter, "public-private partnership" means an arrangement or agreement
between a political subdivision and one or more private persons to fund and provide for a
public need through the development or operation of a public project in which the private
person or persons share with the government entity the responsibility or risk of developing,
owning, maintaining, financing, or operating the project.
Section 3. Section
11-72-102
is enacted to read:
11-72-102
. Public-private partnerships prohibited.
Except as provided in Section 53E-3-507.1, a school district may not establish a
public-private partnership to construct, acquire, improve, extend, or finance a school district
project.
Section 4.
Effective Date.
This bill takes effect on
May 6, 2026
.
2-13-26 2:07 PM