"It's pretty clear that at every level there's dissent from a small number of folks, and we understand that," Nadauld said after the vote.
Rep. Lowry Snow, R-St. George, said on the House floor that in Utah, Dixie signifies a "spirit of tolerance, love and welcome."
"The move to create this university is an accomplishment of part of its destiny, not just for Southern Utah, but for the whole state," he said.
Dixie is a nickname for the region that traces back to a Church of Jesus Christ of Latter-day Saints mission in the 1800s that sent pioneers, some of them former slave owners and drivers, south to grow cotton.
Confederate imagery, including the flag, a soldier mascot and occasional student use of blackface, was part of the school for decades; the symbols were formally retired in the late 1990s. The mascot's retirement is "a painful thing for a lot of people in southern Utah, believe me," said Rep. Brad Last, R-Hurricane.
"In the community, where most students come from and the supporters come from, there is support for this name," said Last, referencing an advertising firm's study released last month that found an overwhelming majority of people in and around the school were in favor of keeping the word in the name.
Bill sponsor Rep. Don Ipson, R-St. George, said university status will be an economic boon to the community, keeping more students and tuition dollars in the community longer.
"It'll be phenomenal," said Ipson. "It's kind of an emotional thing for me."
The final version of the bill removed a $4 million budget request; the higher education appropriations subcommittee is now considering a recommendation to give Dixie State an additional $1.34 million next year.
At the Utah Senate, rules requiring a third reading and a committee hearing were suspended to vote on the bill immediately. It passed that body unanimously, without debate over the name.
Sen. Patricia Jones spoke in support of elevating the school, which she's been familiar with for decades.
"Dixie was then known as a party school. That has changed so much. It's now known as a fine institution where students from Utah and outside the state long to go," she said.
To qualify to become a university, Dixie State officials spent four years tripling the number of bachelor's degree programs to 42, hiring new 60 faculty members and meeting other benchmarks set by the Utah Board of Regents.
The fast timetable for the bill will allow the school to print "Dixie State University" on diplomas for students graduating in May, Nadauld said. After the signs are repainted and the logo changed, officials will let the school adjust a bit before considering adding master's degree programs.
"It's been four years of dramatic change," Nadauld said. "I think we'll need to let it digest."