HB0405 creates a new funding mechanism for state cooperative purchasing in Utah. It imposes a 0.5% administrative fee on certain state cooperative contracts with public entities, directs the resulting revenue into a new restricted account called the State Purchasing Reserve Restricted Account, and requires the state treasurer to invest that account’s money in precious metals. The bill also expands cooperative procurement provisions and adds regional solicitation authority for the chief procurement officer, while limiting the new fee to contracts noticed on or after July 1, 2026.
The bill allows money in the new account to be appropriated only when the Chained Consumer Price Index is at least two standard deviations above its 15-year mean, and then only to offset procurement costs and help maintain continuity in goods-and-services purchasing for public entities. It also amends existing investment law to exempt the new account from certain restrictions and to treat it like other state funds that may be invested in precious metals. The measure takes effect May 6, 2026, and does not appropriate new money directly.
Impact
HB0405 would amend Utah’s procurement and state investment statutes by creating a dedicated restricted account within the General Fund, adding a new administrative fee to certain cooperative purchasing contracts, and authorizing the state treasurer to invest those funds in precious metals. It also modifies the state cooperative procurement framework to require the fee on qualifying contracts, establish deposit procedures, and authorize regional solicitations by the chief procurement officer. Public entities that use state cooperative contracts would be the primary affected parties, along with the Division of Purchasing and General Services and the state treasurer.
Sentiment
The bill appears to have received mixed but meaningful support in the House. It advanced out of committee on a 7-2 vote and then passed third reading 42-23, indicating a majority of members supported the concept while a substantial minority opposed it. No committee transcript was provided, so the available record shows vote outcomes but not detailed floor or committee debate.
Contention
The likely points of contention are the new 0.5% administrative fee, the requirement that the state treasurer invest the reserve in precious metals, and the trigger for spending the account only when inflation reaches a specified threshold. Supporters appear to view the bill as a way to create a reserve that can stabilize procurement costs during high inflation, while opponents may question the added fee on public contracts, the use of precious metals as an investment strategy, and the narrow conditions for accessing the funds. The split House vote suggests concern about both the fiscal mechanics and the policy approach.