1. (1) If a political subdivision, interlocal organization, or other local entity does not comply with the accounting report requirements of Section 51-2a-201, the state auditor may:

   1. (a) withhold allocated state funds to pay the cost of the accounting report, in accordance with Subsection (2); or
   2. (b) prohibit financial access, in accordance with Subsection (3).

2. (2)

   1. (a) If the state auditor does not prohibit financial access in accordance with Subsection (3), the state auditor may withhold allocated state funds sufficient to pay the cost of the accounting report from any local entity described in Subsection (1).
   2. (b) If no allocated state funds are available for withholding, the local entity shall reimburse the state auditor for any cost incurred in completing the accounting reports required under Section 51-2a-402.
   3. (c) The state auditor shall release the withheld funds if the local entity meets the accounting report requirements either voluntarily or by action under Section 51-2a-402.

3. (3)

   1. (a) If the state auditor does not withhold funds in accordance with Subsection (2), the state auditor may prohibit any local entity described in Subsection (1) from accessing:

      1. (i) money held by the state; and

      2. (ii) money held in an account of a financial institution by:

         1. (A) contacting the entity's financial institution and requesting that the institution prohibit access to the account; or
         2. (B) filing an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, requesting an order of the court to prohibit a financial institution from providing the entity access to the account.
   2. (b) The state auditor shall remove the prohibition on accessing funds described in Subsection (3)(a) if the local entity meets the accounting report requirements either voluntarily or by action under Section 51-2a-402.
4. (4) The state auditor may take the action described in Subsection (3) in regard to revenue generated by a county's imposition of a transient room tax under Section 59-12-301 or a tourism, recreation, cultural, convention, and airport facilities tax under Section 59-12-603 if, after completing the analysis and determination required by Subsection 17-78-704(4)(a)(i), the state auditor and the Office of the Legislative Fiscal Analyst determine by consensus that the county's written report does not sufficiently demonstrate that the county is expending revenue in accordance with the requirements of Sections 17-78-702, 59-12-301, and 59-12-603.

Amended by Chapter 117, 2026 General Session