Local government requirement to establish replacement accounts to maintain and replace capital projects that receive state funding

This bill requires local governments receiving state funding for capital projects (like schools, parks, or infrastructure) to establish special accounts to maintain and replace those projects once they reach their useful life. Local governments must set annual deposit amounts based on depreciation and inflation, create written policies for fund use (including safety and sustainability), and maintain balances no higher than the state funding received. Failure to comply results in a penalty fee equal to 1% of the state appropriation per year, paid to the state general fund. The requirement applies to new projects with agreements signed on or after July 1, 2025, and does not affect state agencies or existing replacement funds meeting minimum deposit standards.