02-25 10:11 H.B. 553
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State Grant Process Amendments
2025 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Val L. Peterson
Senate Sponsor:
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LONG TITLE
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General Description:
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This bill modifies provisions related to state grants.
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Highlighted Provisions:
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This bill:
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▸ for direct award grants, prohibits an administering agency from using grant funds to
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administer the grant, unless otherwise provided in the grant appropriation's intent
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language;
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▸ modifies certain reporting requirements for competitive grants; and
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▸ makes technical and conforming changes.
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Money Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill provides a special effective date.
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Utah Code Sections Affected:
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AMENDS:
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63G-6b-101, as enacted by Laws of Utah 2024, Chapter 300
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63G-6b-201, as enacted by Laws of Utah 2024, Chapter 300
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63G-6b-301, as enacted by Laws of Utah 2024, Chapter 300
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63G-6b-401, as enacted by Laws of Utah 2024, Chapter 300
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Be it enacted by the Legislature of the state of Utah:
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Section 1. Section 63G-6b-101 is amended to read:
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63G-6b-101 . Definitions.
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As use in this chapter:
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(1) "Administering agency" means a state agency that administers a grant.
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(2) "Competitive grant" means a grant that is not a direct award grant.
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(3) "Direct award grant" means a grant that is funded by money that the Legislature intends
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the state agency to pass through to one or more recipients without a competitive process.
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(4)(a) "Grant" means a state agency's expenditure of state money, or agreement to
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expend state money, that is:
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(i) authorized by law;
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(ii) made for a particular purpose; and
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(iii) made without acquiring, or the promise of acquiring, a procurement item in
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exchange for the expenditure.
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(b) "Grant" does not include:
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(i) a tax credit;
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(ii) an expenditure of federal money;
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(iii) public assistance, as defined in Section 26B-9-101;
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(iv) a loan;
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(v) a rebate;
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(vi) an incentive; or
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(vii) a claim payment.
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(5) "Grant agreement" means an agreement between an administering agency and a grant
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recipient described in Subsection 63G-6b-201(4).
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[(5)] (6) "Grant appropriation" means an appropriation the Legislature makes to an
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administering agency to be used for one or more grants.
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[(6)] (7) "Grant period" means the time frame during which a grant recipient receives funds
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from a single grant.
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[(7)] (8) "Multi-year grant" means a grant for which the grant period exceeds one year.
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[(8)] (9) "Nonprofit entity" means an entity that:
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(a) operates in the state;
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(b) is not a government entity; and
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(c) is exempt from federal income taxation under Section 501(c)(3), Internal Revenue
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Code.
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[(9)] (10) "Procurement item" means the same as that term is defined in Section 63G-6a-103.
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[(10)] (11)(a) "State agency" means a department, division, or other agency or
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instrumentality of the state.
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(b) "State agency" does not include the legislative department.
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[(11)] (12) "State money" means money that is derived from state fees or state tax revenue.
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Section 2. Section 63G-6b-201 is amended to read:
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63G-6b-201 . Requirements for state grants.
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(1)(a) An administering agency shall disburse grant funds in accordance with this
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Subsection (1).
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(b) Before an administering agency disburses a grant's grant funds, the administering
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agency shall ensure that the grant recipient provides a detailed budget demonstrating
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how the grant recipient will use the grant funds.
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(c) An administering agency shall establish a distribution schedule that ensures
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accountability and responsible oversight of the use of the grant funds.
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(d) An administering agency may not:
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(i) disburse all grant funds in a single payment, unless the administering agency
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makes the single payment after the grant recipient satisfies the grant recipient's
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performance obligations under the [agreement described in Subsection (4)] grant
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agreement; or
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(ii) make a grant recipient's final disbursement before the grant recipient delivers the
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report described in Subsection (3).
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(2) For a multi-year grant:
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(a) the grant period may not exceed five years; and
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(b) in the final quarter of each year of the grant period, excluding the final year, the grant
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recipient shall deliver to the administering agency a report that details the grant
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recipient's progress towards fulfilling the grant's purpose, including the annual
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deliverables and performance metrics described in the agreement made in accordance
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with Subsection (4).
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(3) An administering agency may not make the final grant funds disbursement until:
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(a) the grant recipient delivers to the administering agency a final report that details the
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extent to which the grant recipient fulfilled the grant's purpose, including the
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deliverables and performance metrics described in the [agreement made in
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accordance with Subsection (4)] grant agreement; and
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(b) the administering agency determines that the grant recipient satisfactorily produced
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each deliverable provided in the [agreement described in Subsection (4)] grant
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agreement.
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(4) Except as otherwise provided in the grant appropriation and consistent with the other
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provisions of this section, an administering agency may not disburse grant funds to a
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grant recipient before the administering agency and the grant recipient execute an
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agreement that contains:
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(a) the disbursement schedule for the grant funds;
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(b) the deliverables, reporting, and performance metrics the grant recipient will produce
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and use to demonstrate that the grant recipient used the grant funds to fulfill the
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grant's purpose;
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(c) if the grant is a multi-year grant, annual deliverables and performance metrics the
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grant recipient will produce and use to demonstrate sufficient progress towards
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fulfilling the grant's purpose;
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(d) a provision informing the grant recipient that disbursement of grant funds is subject
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to legislative appropriation; and
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(e) the grant recipient's consent to follow-up audit and clawback of the grant funds if an
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audit shows that the grant funds were inappropriately used.
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(5) In accordance with Utah Constitution, Article VI, Section 33, the legislative auditor
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general may audit the use of any grant funds.
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Section 3. Section 63G-6b-301 is amended to read:
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63G-6b-301 . Direct award grant requirements.
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(1)(a) A direct award grant is valid only if the direct award grant's grant appropriation
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identifies the recipient or class of recipients in the grant appropriation's intent
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language.
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(b) For a grant appropriation that is an ongoing appropriation to fund a multi-year grant,
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the requirement to identify the recipient or class of recipients applies each fiscal year.
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(2) If the intent language for a direct award grant's grant appropriation provides a
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disbursement schedule that is inconsistent with the [schedule described in Section
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63G-6b-202] requirements described in Section 63G-6b-201, for the fiscal year in which
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the grant appropriation is made, the schedule in the intent language controls.
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(3) An administering agency may not use any portion of a direct award grant's grant
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appropriation to pay costs of administering the grant, unless otherwise provided in the
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grant appropriation's intent language.
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Section 4. Section 63G-6b-401 is amended to read:
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63G-6b-401 . Competitive grant requirements.
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(1)(a) For a competitive grant, the administering agency shall:
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(i) establish a competitive application and selection process; and
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(ii) award each competitive grant in accordance with the established process.
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(b) As part of the competitive application process, the administering agency shall require
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that each applicant disclose all other state funding the applicant receives.
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(2) Except as otherwise provided in the grant appropriation's intent language, an
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administering agency may not award a competitive grant to a recipient who has received
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a direct award grant if:
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(a) the direct award grant is for substantially the same purpose as the competitive grant;
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and
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(b) the direct award grant's grant period and the competitive grant's grant period overlap.
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(3) [After] If directed in the grant appropriation's intent language, after an administering
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agency completes a competitive application process for a competitive grant but before
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the administering agency awards the grant, the administering agency shall report each
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grant recipient to the legislative fiscal analyst and the Governor's Office of Planning and
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Budget.
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Section 5. Effective Date.
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This bill takes effect on July 1, 2025.
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