1. (1) As used in this section:

   1. (a)

      1. (i) "Annual leave II" means leave hours an employing agency provides to an employee, beginning on the change date established in Subsection (2), as time off from work for personal use without affecting the employee's pay.

      2. (ii) "Annual leave II" does not include:

         1. (A) legal holidays under Section 63G-1-301;
         2. (B) time off as compensation for actual time worked in excess of an employee's defined work period;
         3. (C) sick leave;
         4. (D) paid or unpaid administrative leave; or
         5. (E) other paid or unpaid leave from work provided by state statute, administrative rule, or by federal law or regulation.
   2. (b) "Change date" means the date established by the Division of Finance under Subsection (2) when annual leave II begins for a state agency.
2. (2) In accordance with the Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the Division of Finance shall establish a date that is no later than January 2, 2016, when a state agency shall offer annual leave II in lieu of annual leave to an employee who is eligible to receive paid leave.
3. (3) An employing agency shall allow an employee who has an unused balance of accrued annual leave before the change date, to use the annual leave under the same rules that applied to the leave on the change date.

4. (4)

   1. (a) At the time of employee accrual of annual leave II, an employing agency shall set aside the cost of each hour of annual leave II for each eligible employee in an amount determined in accordance with rules made by the Division of Finance.

   2. (b) The rules made under Subsection (4)(a) shall consider:

      1. (i) the employee hourly rate of pay;
      2. (ii) applicable employer paid taxes that would be required if the employee was paid for the annual leave II instead of using it for time off;
      3. (iii) other applicable employer paid benefits; and
      4. (iv) adjustments due to employee hourly rate changes, including the effect on accrued annual leave II balances.
   3. (c) The Division of Finance shall provide that the amount of costs set aside under Subsection (4)(a) and deposited into the fund increase by at least the projected increase in annual leave liability for that year, until the year-end trust fund balances are reached as required under Subsection 67-19f-201(3)(b).
5. (5) The cost set aside under Subsection (4) shall be deposited by the Division of Finance into the State Employees' Annual Leave Trust Fund created in Section 67-19f-201.
6. (6) For annual leave hours accrued before the change date, an employing agency shall continue to comply with the Division of Finance requirements for contributions to the termination pool.

7. (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:

   1. (a) the division shall make rules for the accrual and use of annual leave II provided under this section; and
   2. (b) the Division of Finance shall make rules for the set aside provisions under Subsections (4) and (5).
8. (8) The provisions of this section are subject to the provisions of Section 63A-17-515.

Amended by Chapter 357, 2026 General Session