HB 405

02-20 12:00  1st Sub. (Buff) H.B. 405
                            Ken Ivory proposes the following substitute bill:
1State Purchasing Reserve Funding
                                       2026 GENERAL SESSION
                                            STATE OF UTAH
                                       Chief Sponsor: Ken Ivory
                                    Senate Sponsor: John D. Johnson
2
3   LONG TITLE
4   General Description:
5This bill modifies provisions related to state purchasing.
6   Highlighted Provisions:
7This bill:
8▸ establishes an administrative fee on state cooperative contracts;
9▸ deposits revenue from the administrative fee into a restricted account called the State
10   Purchasing Reserve Restricted Account (account);
11▸ directs the state treasurer to invest money in the account in precious metals; and
12▸ authorizes the money in the account to be used for the purpose of offsetting the cost of
13   procuring goods and services for specified public entities and ensuring continuity in the
14   public entities' procurement of goods and services, if certain inflation metrics are met.
15   Money Appropriated in this Bill:
16None
17   Other Special Clauses:
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18None
19   Utah Code Sections Affected:
20   AMENDS:
2151-7-2 (Effective 05/06/26) (Partially Repealed 07/01/28), as last amended by Laws of
22Utah 2025, First Special Session, Chapter 9
2363G-6a-2105 (Effective 05/06/26), as last amended by Laws of Utah 2016, Chapters 348,
24355
25   ENACTS:
2667-4-20 (Effective 05/06/26), Utah Code Annotated 1953
27
28   Be it enacted by the Legislature of the state of Utah:
1st Sub. (Buff) H.B. 405  02-20 12:00
29Section 1. Section 51-7-2 is amended to read:
3051-7-2 (Effective 05/06/26) (Partially Repealed 07/01/28). Exemptions from
31   chapter.
32   (1) Except as provided in Subsection (2), the following funds are exempt from this chapter:
33(a) funds invested in accordance with the participating employees' designation or
34direction pursuant to a public employees' deferred compensation plan established and
35operated in compliance with Section 457 of the Internal Revenue Code of 1986, as
36amended;
37(b) funds of the Utah State Retirement Board;
38(c) funds of the Utah Housing Corporation;
39(d) endowment funds of higher education institutions, including funds of the Higher
40Education Student Success Endowment, created in Section 53H-8-402;
41(e) permanent and other land grant trust funds established pursuant to the Utah Enabling
42Act and the Utah Constitution;
43(f) the State Post-Retirement Benefits Trust Fund;
44(g) the funds of the Utah Educational Savings Plan;
45   (h) funds of the permanent state trust fund created by and operated under Utah
46Constitution, Article XXII, Section 4;
47(i) the funds in the Navajo Trust Fund;
48(j) the funds in the Radioactive Waste Perpetual Care and Maintenance Account;
49(k) the funds in the Employers' Reinsurance Fund;
50(l) the funds in the Uninsured Employers' Fund;
51(m) the Utah State Developmental Center Long-Term Sustainability Fund, created in
52Section 26B-1-331;
53(n) the funds in the Risk Management Fund created in Section 63A-4-201;
54(o) the Utah fund of funds created in Section 63N-6-401;
55(p) the funds deposited into the Utah Homes Investment Program from the
56Transportation Infrastructure General Fund Support Subfund created in Section
5772-2-134;
58(q) subject to Subsection 67-4-19(2), the portion of the funds in the following accounts
59invested by the state treasurer in precious metals:
60(i) the State Disaster Recovery Restricted Account, created in Section 53-2a-603;
61(ii) the General Fund Budget Reserve Account, created in Section 63J-1-312;
62(iii) the Income Tax Fund Budget Reserve Account, created in Section 63J-1-313; and
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63(iv) the Medicaid Growth Reduction and Budget Stabilization Account, created in
64Section 63J-1-315;
65(r) except as provided in Section 11-13-533, the funds of a public agency insurance
66mutual as that term is defined in Subsection 31A-1-103(7)(a);
67(s) the State Sovereignty Fund created in Section 51-13-201;[ and]
68(t) the funds in the Opioid Litigation Proceeds Fund, created in Section [51-9-801.]
6951-9-801; and
70(u) the State Purchasing Reserve Restricted Account, created in Section 67-4-20.
71   (2) Except for the funds of the Utah State Retirement Board and the Utah Educational
72Savings Plan, the funds described in Subsection (1) are not exempt from Subsections
7351-7-14(2) and (3).
74   (3) Notwithstanding Title 52, Chapter 4, Open and Public Meetings Act, a public body that
75administers a fund described in Subsection (1) may hold a closed meeting to discuss the
76sale or purchase of identifiable securities, investment funds, or investment contracts.
77   (4) A paper, electronic, or other depiction or record of information relating to investment
78activities of a fund described in Subsection (1) is not subject to Title 63G, Chapter 2,
79Government Records Access and Management Act.
80Section 2. Section 63G-6a-2105 is amended to read:
8163G-6a-2105 (Effective 05/06/26). Cooperative procurements -- Contracts with
82   federal government -- Regional solicitations.
83   (1)(a) The chief procurement officer may, in accordance with the requirements of this
84chapter, enter into a cooperative procurement, and a contract that is awarded as a
85result of a cooperative procurement, with:
86[(a)] (i) another state;
87[(b)] (ii) a cooperative purchasing organization;[ or]
88[(c)] (iii) a public entity[ inside or outside the state.] ; or
89(iv) a government entity outside the state.
90(b)(i) Except for a contract the chief procurement officer exempts from
91administrative fees, the chief procurement officer shall ensure that each contract
92resulting from a state cooperative procurement with a public entity includes an
93administrative fee equal to 0.5% of the total price the public entity pays for
94procurement items under the contract.
95(ii) The fee described in Subsection (1)(b)(i) is in addition to any administrative fee
96the chief procurement officer includes under the chief procurement officer's
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97authority described in Subsection 63G-6a-303(2)(b).
98(iii) The division shall deposit revenue from the administrative fee described in this
99Subsection (1)(b) into the State Purchasing Reserve Restricted Account created in
100Section 67-4-20.
101(iv) The provisions of this Subsection (1)(b) apply only to contracts for which the
102chief procurement officer posts the notice required under Section 63G-6a-112 on
103or after July 1, 2026.
104   (2) A public entity, nonprofit organization, or, as permitted under federal law, an agency of
105the federal government, may obtain a procurement item from a state cooperative contract
106or a contract awarded by the chief procurement officer under Subsection [(1)] (1)(a),
107without signing a participating addendum if the solicitation issued by the chief
108procurement officer to obtain the contract includes a statement indicating that the
109resulting contract will be issued for the benefit of public entities and, as applicable,
110nonprofit organizations and agencies of the federal government.
111   (3) Except as provided in Section 63G-6a-506, or as otherwise provided in this chapter, an
112executive branch procurement unit may not obtain a procurement item from a source
113other than a state cooperative contract or a contract awarded by the chief procurement
114officer under Subsection [(1)] (1)(a), if the procurement item is available under a state
115cooperative contract or a contract awarded by the chief procurement officer under
116Subsection [(1)] (1)(a).
117   (4) A Utah procurement unit may:
118(a) contract with the federal government without going through a standard procurement
119process or an exception to a standard procurement process, described in Part 8,
120Exceptions to Procurement Requirements, if the procurement item obtained under the
121contract is provided:
122(i) directly by the federal government and not by a person contracting with the
123federal government; or
124(ii) by a person under contract with the federal government that obtained the contract
125in a manner that substantially complies with the provisions of this chapter;
126(b) participate in, sponsor, conduct, or administer a cooperative procurement with
127another Utah procurement unit or another public entity in Utah, if:
128(i) each party unit involved in the cooperative procurement enters into an agreement
129describing the rights and duties of each party;
130(ii) the procurement is conducted, and the contract awarded, in accordance with the
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131requirements of this chapter;
132(iii) the solicitation:
133(A) clearly indicates that the procurement is a cooperative procurement; and
134(B) identifies each party that may purchase under the resulting contract; and
135(iv) each party involved in the cooperative procurement signs a participating
136addendum describing its rights and obligations in relation to the resulting contract;
137or
138(c) purchase under, or otherwise participate in, an agreement or contract of a cooperative
139purchasing organization, if:
140(i) each party involved in the cooperative procurement enters into an agreement
141describing the rights and duties of each party;
142(ii) the procurement was conducted in accordance with the requirements of this
143chapter;
144(iii) the solicitation:
145(A) clearly indicates that the procurement is a cooperative procurement; and
146(B) identifies each party that may purchase under the resulting contract; and
147(iv) each party involved in the cooperative procurement signs a participating
148addendum describing its rights and obligations in relation to the resulting contract.
149   (5) A procurement unit may not obtain a procurement item under a contract that results
150from a cooperative procurement described in Subsection (4), unless the procurement
151unit:
152(a) is identified under Subsection (4)(b)(iii)(B) or (4)(c)(iii)(B); and
153(b) signs a participating addendum to the contract as required by this section.
154   (6) A procurement unit, other than a legislative procurement unit or a judicial procurement
155unit, may not obtain a procurement item under a contract held by the United States
156General Services Administration, unless, based upon documentation provided by the
157procurement unit, the Director of the State Division of Purchasing and General Services
158determines in writing that the United States General Services Administration procured
159the contract in a manner that substantially complies with the provisions of this chapter.
160   (7)(a) As used in this Subsection (7), "regional solicitation" means a solicitation issued
161by the chief procurement officer for the procurement of a procurement item within a
162specified geographical region of the state.
163(b) In addition to any other duty or authority under this section, the chief procurement
164officer shall:
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165(i) after considering board recommendations, develop a plan for issuing regional
166solicitations; and
167(ii) after developing a plan, issue regional solicitations for procurement items in
168accordance with the plan and this chapter.
169(c) A plan under Subsection (7)(b) shall:
170(i) define the proposed regional boundaries for regional solicitations;
171(ii) specify the types of procurement items for which a regional solicitation may be
172issued; and
173(iii) identify the regional solicitations that the chief procurement officer plans to issue.
174(d) A regional solicitation shall require that a person responding to the solicitation offer
175similar warranties and submit to similar obligations as are standard under other state
176cooperative contracts.
177(e) Except as authorized by the chief procurement officer, a procurement item that is
178available under a state cooperative contract may not be provided under a contract
179pursuant to a regional solicitation until after the expiration of the state cooperative
180contract.
181Section 3. Section 67-4-20 is enacted to read:
18267-4-20 (Effective 05/06/26). State Purchasing Reserve Restricted Account.
183   (1) As used in this section, "precious metal" means the same as that term is defined in
184Section 61-1-13.
185   (2) There is created within the General Fund a restricted account known as the State
186Purchasing Reserve Restricted Account.
187   (3) The account is funded by:
188(a) revenue from the fee created in Subsection 63G-6a-2105(1)(b); and
189(b) the appreciated value of investments made with the money deposited into the
190account.
191   (4)(a) The state treasurer shall invest the money in the account in precious metals.
192(b) The requirements of Subsections 51-7-14(2) and (3) apply to the state treasurer's
193investment in precious metals under this section.
194   (5)(a) The Legislature may appropriate money from the account:
195(i) if the Chained Consumer Price Index is at least two standard deviations above the
19615 year mean of the Chained Consumer Price Index; and
197(ii) for the purpose of offsetting the cost of procuring goods and services for public
198entities and ensuring continuity in public entities' procurement of goods and
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199services.
200(b) When appropriating money from the account, the Legislature shall make reasonable
201efforts in light of the circumstances to ensure the appropriated money benefits each
202public entity that participates in a state cooperative procurement.
203   (6) When the Legislature appropriates money from the account, the state treasurer shall sell
204investments sufficient to effectuate the appropriation.
205Section 4. Effective Date.
206   This bill takes effect on May 6, 2026.
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