2-17-105. Insurance on state buildings -- use of proceeds -- building replacement. (1) Money received by the state as indemnification for damage to state buildings, except buildings procured by the department of transportation by purchase or condemnation for right-of-way purposes, must be deposited in the state special revenue fund. The money is statutorily appropriated, as provided in 17-7-502, for the purposes of subsections (2) and (3).

(2) The money may only be:

(a) used to repair the damaged property;

(b) used to replace the damaged property, subject to the limitations in subsection (3); or

(c) transferred to the fund and account from which the premiums were paid on the policy covering the building. Money transferred in this manner may not be spent by the institution or agency having custody of the damaged property but must be available for future legislative appropriation. If the money is not spent or committed within 2 years from the time that it is received, the money automatically reverts to the fund and account from which the premiums were paid.

(3) If an insured building is totally destroyed or so badly damaged that repair is impractical, the governing board or officer responsible for the building may request that any money received by the state as indemnification for property damage be used to replace the building only if the proposed replacement is designed to be used for the same general purposes as the damaged or destroyed building. If the governing board or officer determines that the building should not be replaced, any money received by the state as indemnification for property damage over and above any outstanding debt on the building must be transferred as provided in subsection (2)(c).