1. (1)

   1. (a) A special district may accumulate retained earnings or fund balances, as appropriate, in any fund.

   2. (b) For the general fund only, a special district may only use an accumulated fund balance to:

      1. (i) provide working capital to finance expenditures from the beginning of the budget year until general property taxes or other applicable revenues are collected, subject to Subsection (1)(c);
      2. (ii) provide a resource to meet emergency expenditures under Section 17B-1-623; and
      3. (iii) cover a pending year-end excess of expenditures over revenues from an unavoidable shortfall in revenues, subject to Subsection (1)(d).
   3. (c) Subsection (1)(b)(i) does not authorize a special district to appropriate a fund balance for budgeting purposes, except as provided in Subsection (4).

   4. (d) Subsection (1)(b)(iii) does not authorize a special district to appropriate a fund balance to avoid an operating deficit during a budget year except:

      1. (i) as provided under Subsection (4); or
      2. (ii) for emergency purposes under Section 17B-1-623.

2. (2)

   1. (a) Except as provided in Subsection (2)(b), the accumulation of a fund balance in the general fund may not exceed the most recently adopted general fund budget, plus 100% of the current year's property tax.

   2. (b) Notwithstanding Subsection (2)(a), a special district may accumulate in the general fund mineral lease revenue that the special district receives from the United States under the Mineral Lands Leasing Act, 30 U.S.C. Sec. 181 et seq., through a distribution under:

      1. (i) Title 63N, Chapter 22, Part 5, Community Impact Fund; or
      2. (ii) Title 59, Chapter 21, Mineral Lease Funds.
3. (3) If the fund balance at the close of any fiscal year exceeds the amount permitted under Subsection (2), the district shall appropriate the excess in accordance with Section 17B-1-613.
4. (4) A special district may utilize any fund balance in excess of 5% of the total revenues of the general fund for budget purposes.

5. (5)

   1. (a) Within a capital projects fund, the board of trustees may, in any budget year, appropriate from estimated revenue or fund balance to a reserve for capital projects for the purpose of financing future specific capital projects, including new construction, capital repairs, replacement, and maintenance, under a formal long-range capital plan that the board of trustees adopts.
   2. (b) A special district may allow a reserve amount under Subsection (5)(a) to accumulate from year to year until the accumulated total is sufficient to permit economical expenditure for the specified purposes.
   3. (c) A special district may disburse from a reserve account under Subsection (5)(a) only by a budget appropriation that the special district adopts in accordance with this part.
   4. (d) A special district shall ensure that the expenditures from the appropriation budget accounts described in this Subsection (5) conform to all requirements of this part relating to execution and control of budgets.

Amended by Chapter 393, 2026 General Session