HB 464: State Sovereignty Fund - Utah

Amended 2/27/2025 12:02:571 → Substitute #1 · 7 edits

MODERATE

This bill creates a new State Sovereignty Fund to preserve Utah's financial resources for future generations. The fund will automatically receive surplus money from state budgets and excess tax revenues, with principal contributions locked until 2075. After that date, the fund can be used to offset reduced federal funding or provide tax relief. The bill also modifies existing budget reserve accounts to redirect some surplus funds into this new sovereign fund.

Scope change

The bill adds a new permanent state fund that operates independently from regular budget cycles, with specific rules about when and how money can be withdrawn.

FISCAL

Created a new State Sovereignty Fund that automatically receives reserve account surpluses, half of General Fund savings from federal Medicaid percentage decreases, 12.5% of state savings from enhanced federal Medicaid percentages, excess revenue collections, investment earnings, and future legislative appropriations.

Changed the percentage of state fund savings from enhanced Federal Medical Assistance Percentage from 25% to 12.5%.

Modified General Fund Budget Reserve Account rules to transfer remaining surplus funds to the State Sovereignty Fund when the account balance exceeds 9% of General Fund appropriations.

Modified Income Tax Fund Budget Reserve Account rules to transfer remaining surplus funds to the State Sovereignty Fund when the account balance exceeds 11% of Income Tax Fund appropriations.

TIMELINE

Established a 2075-76 date when the Legislature may begin appropriating money from the fund, with initial restrictions allowing up to 50% of annual earnings to be used for specific purposes.

DEFINITION

Created new definitions for 'Excess revenue collections' (revenue exceeding estimates by more than two standard deviations on a 20-year mean) and 'Reserve account surplus' (specific amounts from budget reserve accounts).

ELIGIBILITY

Added the State Sovereignty Fund to the list of funds exempt from certain state investment disclosure and open meeting requirements.

Amended Excerpts 2/27/2025 12:02:571 → Amended 2/27/2025 12:02:571 · 5 edits

MODERATE

This bill creates a new State Sovereignty Fund in Utah and amends existing statutes to exempt it from certain taxes and reporting requirements. The legislation establishes how the fund will be funded through excess revenue collections and defines key terms for its operation.

Scope change

New scope - creates a previously non-existent State Sovereignty Fund with specific funding mechanisms and exemptions.

SCOPE

Creates a new State Sovereignty Fund (Section 51-13-201) to hold state funds for sovereignty purposes.

DEFINITION

Defines key terms including 'Excess revenue collections' (revenue exceeding estimates by more than two standard deviations), 'Principal' (deposited money excluding earnings), and 'Reserve account surplus'.

ELIGIBILITY

Amends Section 51-7-2 to add the State Sovereignty Fund to the list of funds exempt from certain tax provisions.

FISCAL

Establishes funding sources including excess revenue collections and allocations from other state funds.

REQUIREMENT

Adds provisions allowing closed meetings for investment discussions and exempting investment records from public records requests.

Enrolled → Amended Excerpts 2/27/2025 12:02:571 · 1 edit

MINOR

The bill was amended to increase the percentage of state fund savings that must be deposited into the State Sovereignty Fund from 12.5% to 25% when the federal government offers an enhanced Federal Medical Assistance Percentage. This change significantly increases the potential funding available in the fund, which is designed to help offset future reductions in federal funding or provide state tax relief.

FISCAL

Increased the required deposit percentage from 12.5% to 25% of state fund savings resulting from an enhanced Federal Medical Assistance Percentage.

Introduced → Enrolled · 8 edits · Mar 26, 2025

MODERATE

This bill creates a new State Sovereignty Fund in Utah that will receive money from budget surpluses in the General Fund and Income Tax Fund, as well as from gold and silver held in reserve accounts. The fund is designed to grow over time and can only be used after 2075 to either offset federal funding cuts or provide tax relief. The bill also modifies existing reserve accounts to automatically transfer surplus funds to the new Sovereignty Fund.

Scope change

New fund created with specific funding sources and usage restrictions; existing reserve accounts now have modified rules for transferring surplus money to the new fund

FISCAL

Created a new State Sovereignty Fund that will receive automatic transfers of budget surpluses from the General Fund and Income Tax Fund Budget Reserve Accounts

Added one-time transfers of $54.4 million from the General Fund Budget Reserve Account and $85.6 million from the Income Tax Fund Budget Reserve Account for fiscal year 2025

Established that the fund can only be appropriated starting in fiscal year 2075-76, with up to 50% of annual earnings allowed for use

Allows the state treasurer to invest up to 3% or $140 million of the fund's principal in precious metals

Modified General Fund and Income Tax Fund Budget Reserve Accounts to automatically transfer 25% of surpluses to the new Sovereignty Fund, with remaining amounts going to the Sovereignty Fund if the reserve account would exceed 9% of appropriations

REQUIREMENT

Requires two-thirds legislative vote to appropriate principal from the fund, with earnings available for use without such vote

DEFINITION

Added new definitions for terms including 'excess revenue collections', 'reserve account surplus', and 'principal' as they apply to the State Sovereignty Fund

TECHNICAL

Added Senate sponsor name and cosponsors to the enrolled copy; corrected formatting inconsistencies in the original draft

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