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H.B. 134 Enrolled
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Corrected Version
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SCHOOL AND INSTITUTIONAL TRUST
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LANDS AMENDMENTS
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2007 GENERAL SESSION
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STATE OF UTAH
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Chief Sponsor: John G. Mathis
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Senate Sponsor:
Darin G. Peterson
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Cosponsors:
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Kay L. McIffMichael E. NoelPatrick Painter
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LONG TITLE
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General Description:
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This bill changes the distribution of mineral revenue generated from lands acquired by
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the School and Institutional Trust Lands Administration from the federal government.
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Highlighted Provisions:
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This bill:
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. defines terms;
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. creates the Land Exchange Distribution Account;
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. distributes the state's share of mineral revenues from school and institutional trust
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lands to:
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. the counties from which the revenue is generated;
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. the counties where school and institutional trust lands were relinquished to the
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United States;
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. the Constitutional Defense Restricted Account;
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. the Permanent Community Impact Fund;
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. the State Board of Education;
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. the Utah Geological Survey; and
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. the Water Research Laboratory at Utah State University;
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. designates how the state's share of mineral revenues from school and institutional
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trust lands are to be used;
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. eliminates the contributions of mineral revenue from school and institutional trust
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lands to:
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. the Rural Electronic Commerce Communications System Fund;
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. the Rural Development Fund; and
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. the Mineral Lease Account;
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. changes how administrative costs are determined;
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. provides for revenue generated on SITLA land exchanged with the federal
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government;
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. directs the Division of Finance to transfer the balance of the Rural Development
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Fund and the Rural Electronic Commerce Communications System to the
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Permanent Community Impact Fund when the funds are repealed;
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. repeals provisions relating to the Rural Development Fund;
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. repeals provisions relating to the Rural Electronic Commerce Communications
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System Fund; and
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. makes technical changes.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill provides an effective date and a repeal date.
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Utah Code Sections Affected:
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AMENDS:
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9-4-302, as last amended by Chapters 10 and 299, Laws of Utah 2000
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9-4-303, as last amended by Chapter 175, Laws of Utah 2001
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9-4-307, as last amended by Chapters 10 and 299, Laws of Utah 2000
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9-15-102, as last amended by Chapter 256, Laws of Utah 2002
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11-14-308, as last amended by Chapter 83, Laws of Utah 2006
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53C-3-201, as last amended by Chapter 299, Laws of Utah 2000
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53C-3-202, as last amended by Chapter 292, Laws of Utah 2002
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59-21-1, as last amended by Chapter 299, Laws of Utah 2000
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59-21-2, as last amended by Chapter 148, Laws of Utah 2005
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63C-4-103, as last amended by Chapter 14, Laws of Utah 2006
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ENACTS:
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53C-3-203, Utah Code Annotated 1953
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REPEALS:
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9-14-101, as last amended by Chapter 18, Laws of Utah 2004
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9-14-102, as last amended by Chapter 256, Laws of Utah 2002
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9-14-103, as last amended by Chapter 176, Laws of Utah 2002
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9-14-104, as last amended by Chapter 14, Laws of Utah 2006
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9-14-105, as enacted by Chapter 368, Laws of Utah 1999
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9-14-106, as enacted by Chapter 368, Laws of Utah 1999
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9-15-101, as last amended by Chapter 18, Laws of Utah 2004
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9-15-102, as last amended by Chapter 256, Laws of Utah 2002
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9-15-103, as last amended by Chapter 176, Laws of Utah 2002
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9-15-104, as last amended by Chapter 14, Laws of Utah 2006
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9-15-105, as enacted by Chapter 368, Laws of Utah 1999
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9-15-106, as enacted by Chapter 368, Laws of Utah 1999
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Uncodified Material Affected:
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ENACTS UNCODIFIED MATERIAL
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
9-4-302
is amended to read:
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9-4-302. Definitions.
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As used in this part:
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[(1) "Acquired lands" is as defined in Section
53C-3-201
.]
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[(2) "Acquired mineral interests" is as defined in Section
53C-3-201
.]
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[(3)] (1) "Bonus payments" means[: (a)] that portion of the bonus payments received
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by the United States government under the Leasing Act paid to the state under Section 35 of
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the Leasing Act, 30 U.S.C. Sec. 191, together with any interest that had accrued on those
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payments[; or].
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[(b) bonus payments collected by the School and Institutional Trust Lands
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Administration created by Section
53C-1-201
from the lease of:]
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[(i) minerals on acquired lands; or]
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[(ii) acquired mineral interests.]
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[(4)] (2) "Impact board" means the Permanent Community Impact Fund Board created
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under Section
9-4-304
.
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[(5)] (3) "Impact fund" means the Permanent Community Impact Fund established by
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this chapter.
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[(6)] (4) "Interlocal Agency" means a legal or administrative entity created by a
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subdivision or combination of subdivisions under the authority of Title 11, Chapter 13,
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Interlocal Cooperation Act.
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[(7)] (5) "Leasing Act" means the Mineral Lands Leasing Act of 1920, 30 U.S.C. Sec.
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181 et seq.
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[(8)] (6) "Subdivision" means a county, city, town, county service area, special service
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district, special improvement district, water conservancy district, water improvement district,
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sewer improvement district, housing authority, building authority, school district, or public
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postsecondary institution organized under the laws of this state.
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Section 2.
Section
9-4-303
is amended to read:
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9-4-303. Impact fund -- Deposits and contents -- Use of fund monies.
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(1) There is created an enterprise fund entitled the "Permanent Community Impact
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Fund."
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(2) The fund consists of:
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(a) all amounts appropriated to the impact fund under Section
59-21-2
;
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(b) bonus payments deposited to the impact fund pursuant to Subsection
59-21-1
(2);
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(c) [bonus payments deposited] all amounts appropriated to the impact fund [pursuant
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to] under Section [
53C-3-202
]
53C-3-203
;
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(d) all amounts received for the repayment of loans made by the impact board under
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this chapter; and
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(e) all other monies appropriated or otherwise made available to the impact fund by the
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Legislature.
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(3) The state treasurer shall:
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(a) invest the monies in the impact fund by following the procedures and requirements
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of Title 51, Chapter 7, State Money Management Act; and
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(b) deposit all interest or other earnings derived from those investments into the impact
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fund.
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(4) The amounts in the impact fund available for loans, grants, administrative costs, or
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other purposes of this part shall be limited to that which the Legislature appropriates for these
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purposes.
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(5) Federal mineral lease revenue received by the state under the Leasing Act that is
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deposited into the impact fund shall be used:
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(a) in a manner consistent with:
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(i) the Leasing Act; and
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(ii) this part; and
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(b) for loans, grants, or both to state agencies or subdivisions that are socially or
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economically impacted by the leasing of minerals under the Leasing Act.
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[(6) Mineral lease revenue collected by the School and Institutional Trust Lands
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Administration from the lease of minerals on acquired lands or the lease of acquired mineral
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interests that is deposited into the impact fund shall be used:]
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[(a) in a manner consistent with this part; and]
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[(b) for loans, grants, or both to state agencies or subdivisions socially or economically
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impacted by the leasing of:]
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[(i) minerals on acquired lands; or]
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[(ii) acquired mineral interests.]
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(6) The monies described in Subsection (2)(c) shall be used for grants to political
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subdivisions of the state to mitigate the impacts resulting from the development or use of
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school and institutional trust lands.
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Section 3.
Section
9-4-307
is amended to read:
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9-4-307. Impact fund administered by impact board -- Eligibility for assistance --
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Review by board -- Administration costs -- Annual report.
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(1) (a) The impact board shall:
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(i) administer the impact fund in a manner that will keep a portion of the impact fund
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revolving;
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(ii) determine provisions for repayment of loans; and
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(iii) establish criteria for determining eligibility for assistance under this part.
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(b) (i) Criteria for awarding loans or grants made from funds described in Subsection
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9-4-303
(5) shall be consistent with Subsection
9-4-303
(5).
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(ii) Criteria for awarding [loans or] grants made from funds described in Subsection
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9-4-303
[(6)] (2)(c) shall be consistent with [Subsections] Subsection
9-4-303
(6) [and
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9-4-305
(1)(a)].
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(c) In order to receive assistance under this part, subdivisions and interlocal agencies
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shall submit formal applications containing the information that the impact board requires.
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(2) In determining eligibility for loans and grants under this part, the impact board shall
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consider the following:
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(a) the subdivision's or interlocal agency's current mineral lease production;
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(b) the feasibility of the actual development of a resource that may impact the
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subdivision or interlocal agency directly or indirectly;
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(c) current taxes being paid by the subdivision's or interlocal agency's residents;
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(d) the borrowing capacity of the subdivision or interlocal agency, its ability and
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willingness to sell bonds or other securities in the open market, and its current and authorized
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indebtedness;
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(e) all possible additional sources of state and local revenue, including utility user
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charges;
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(f) the availability of federal assistance funds;
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(g) probable growth of population due to actual or prospective natural resource
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development in an area;
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(h) existing public facilities and services;
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(i) the extent of the expected direct or indirect impact upon public facilities and
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services of the actual or prospective natural resource development in an area; and
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(j) the extent of industry participation in an impact alleviation plan, either as specified
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in Title 63, Chapter 51, Resource Development, or otherwise.
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(3) The impact board may not fund any education project that could otherwise have
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reasonably been funded by a school district through a program of annual budgeting, capital
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budgeting, bonded indebtedness, or special assessments.
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(4) The impact board may restructure all or part of the agency's or subdivision's
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liability to repay loans for extenuating circumstances.
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(5) The impact board shall:
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(a) review the proposed uses of the impact fund for loans or grants before approving
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them and may condition its approval on whatever assurances that the impact board considers to
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be necessary to ensure that the proceeds of the loan or grant will be used in accordance with the
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Leasing Act and this part; and
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(b) ensure that each loan specifies the terms for repayment and is evidenced by general
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obligation, special assessment, or revenue bonds, notes, or other obligations of the appropriate
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subdivision or interlocal agency issued to the impact board under whatever authority for the
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issuance of those bonds, notes, or obligations exists at the time of the loan.
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(6) The impact board shall allocate from the impact fund to the department those funds
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that are appropriated by the Legislature for the administration of the impact fund, but this
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amount may not exceed 2% of the annual receipts to the impact fund.
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(7) The department shall make an annual report to the Legislature concerning the
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number and type of loans and grants made as well as a list of subdivisions and interlocal
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agencies that received this assistance.
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Section 4.
Section
9-15-102
is amended to read:
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9-15-102. Rural Electronic Commerce Communications System Fund -- Deposits
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and contents -- Interest -- Administration.
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(1) In order to preserve and promote communications systems, such as broadcast
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television, in the rural areas of the state, there is created a restricted special revenue fund
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entitled the "Rural Electronic Commerce Communications System Fund."
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(2) The fund shall consist of:
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(a) monies deposited to the fund under this chapter; and
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[(b) monies deposited to the fund under Section
53C-3-202
; and]
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[(c)] (b) bond proceeds from the issuance and sale of revenue bonds authorized under
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Subsection
9-15-104
(2).
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(3) The fund shall earn interest, which shall be deposited in the fund.
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(4) Any unallocated balance in the fund at the end of a fiscal year shall be nonlapsing.
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(5) The division may use fund monies for administration of the fund, but not to exceed
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2% of the annual receipts to the fund.
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Section 5.
Section
11-14-308
is amended to read:
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11-14-308. Special service district bonds secured by federal mineral lease
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payments -- Use of bond proceeds -- Bond resolution -- Nonimpairment of appropriation
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formula -- Issuance of bonds.
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(1) Special service districts may:
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(a) issue bonds payable, in whole or in part, from federal mineral lease payments which
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are to be deposited into the Mineral Lease Account under Section
59-21-1
and distributed to
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special service districts under Subsection
59-21-2
[(3)](2)(h); or
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(b) pledge all or any part of the mineral lease payments referred to in Subsection (1)(a)
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as an additional source of payment for their general obligation bonds.
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(2) The proceeds of these bonds may be used:
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(a) to construct, repair, and maintain streets and roads;
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(b) to fund any reserves and costs incidental to the issuance of the bonds and pay any
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associated administrative costs; and
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(c) for capital projects of the special service district.
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(3) (a) The special service district board shall enact a resolution authorizing the
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issuance of bonds which, until the bonds have been paid in full:
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(i) shall be irrevocable; and
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(ii) may not be amended in any manner that would:
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(A) impair the rights of the bond holders; or
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(B) jeopardize the timely payment of principal or interest when due.
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(b) Notwithstanding any other provision of this chapter, the resolution may contain
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covenants with the bond holder regarding:
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(i) mineral lease payments, or their disposition;
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(ii) the issuance of future bonds; or
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(iii) other pertinent matters considered necessary by the governing body to:
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(A) assure the marketability of the bonds; or
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(B) insure the enforcement, collection, and proper application of mineral lease
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payments.
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(4) (a) Except as provided in Subsection (4)(b), the state may not alter, impair, or limit
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the statutory appropriation formula provided in Subsection
59-21-2
[(3)](2)(h), in a manner that
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reduces the amounts to be distributed to the special service district until the bonds and the
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interest on the bonds are fully met and discharged. Each special service district may include
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this pledge and undertaking of the state in these bonds.
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(b) Nothing in this section:
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(i) may preclude the alteration, impairment, or limitation of these bonds if adequate
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provision is made by law for the protection of the bond holders; or
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(ii) shall be construed:
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(A) as a pledge guaranteeing the actual dollar amount ultimately received by individual
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special service districts;
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(B) to require the Department of Transportation to allocate the mineral lease payments
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in a manner contrary to the general allocation method described in Subsection
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59-21-2
[(3)](2)(h); or
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(C) to limit the Department of Transportation in making rules or procedures allocating
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mineral lease payments pursuant to Subsection
59-21-2
[(3)](2)(h).
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(5) (a) The average annual installments of principal and interest on bonds to which
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mineral lease payments have been pledged as the sole source of payment may not at any one
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time exceed:
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(i) 80% of the total mineral lease payments received by the issuing entity during the
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fiscal year of the issuing entity immediately preceding the fiscal year in which the resolution
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authorizing the issuance of bonds is adopted; or
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(ii) if the bonds are issued during the first fiscal year the issuing entity is eligible to
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receive funds, 60% of the amount estimated by the Department of Transportation to be
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appropriated to the issuing entity in that fiscal year.
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(b) The Department of Transportation shall not be liable for any loss or damage
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resulting from reliance on the estimates.
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(6) The final maturity date of the bonds may not exceed 15 years from the date of their
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issuance.
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(7) Bonds may not be issued under this section after December 31, 2010.
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(8) Bonds which are payable solely from a special fund into which mineral lease
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payments are deposited constitute a borrowing based solely upon the credit of the mineral lease
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payments received or to be received by the special service district and do not constitute an
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indebtedness or pledge of the general credit of the special service district or the state.
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Section 6.
Section
53C-3-201
is amended to read:
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53C-3-201. Definitions.
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As used in this part:
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(1) "Acquired lands" means those lands acquired by the administration under the
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agreement.
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(2) "Acquired mineral interests" means mineral interests acquired by the administration
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pursuant to Section 3(F), (K), (L), or (M) of the agreement.
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(3) "Agreement" means the Agreement to Exchange Utah School Trust Lands Between
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the State of Utah and the United States of America, signed May 8, 1998, as ratified by the Utah
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School and Lands Exchange Act of 1998, Pub. L. No. 105-335.
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(4) "Exchange" means any land or mineral interest exchange by the administration and
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the United States of America after March 1, 2007.
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(5) "Exchanged lands" means those lands acquired by the administration through an
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exchange.
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(6) "Exchanged mineral interests" means mineral interests acquired by the
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administration through an exchange.
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[(4)] (7) "Identified tracts" means the tracts identified in Section 3(F), (G), (J), (K), (L),
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and (M) of the agreement, generally referred to as the Cottonwood Tract, Westridge Coal Tract,
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Ferron Field, Mill Fork Tract, Dugout Canyon Tract, Muddy Tract, and North Horn Coal Tract.
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[(5)] (8) "Subject mineral" means any mineral that is covered by the Mineral Lands
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Leasing Act, 30 U.S.C. Sec. 181 et seq., as amended through May 3, 1999.
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Section 7.
Section
53C-3-202
is amended to read:
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53C-3-202. Collection and distribution of revenues from federal land exchange
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parcels.
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(1) The director [is responsible for the collection of] shall collect all bonus payments,
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rentals, and royalties from the lease of:
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(a) minerals on acquired lands; [and]
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(b) acquired mineral interests[.];
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(c) minerals on exchanged lands; and
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(d) exchanged mineral interests.
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(2) The director shall:
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(a) [except as provided in Subsections (3) and (4),] no later than the last day of the
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second month following each calendar quarter, distribute all bonus payments received during
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the calendar quarter from the lease of coal, oil and gas, and coalbed methane on the identified
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tracts as follows:
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(i) 50% to the United States; and
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[(ii) 12.16% to the Permanent Community Impact Fund created in Section
9-4-303
;]
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[(iii) 20% to the Constitutional Defense Restricted Account created in Section
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63C-4-103
;]
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[(iv) 15% to the Rural Electronic Commerce Communications System Fund created by
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Section
9-15-102
; and]
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[(v) 2.84% to the Rural Development Fund created under Section
9-14-102
; and]
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(ii) 50% to the Land Exchange Distribution Account created in Section
53C-3-203
;
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(b) [except as provided in Subsections (3) and (4),] no later than the last day of the
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second month following each calendar quarter, distribute all rentals and royalties received
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during the calendar quarter from the lease of subject minerals on the acquired lands and the
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lease of acquired mineral interests as follows:
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(i) 50% to the Land Grant Management Fund created by Section
53C-3-101
; and
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[(ii) 39.5% to the Mineral Lease Account created by Subsection
59-21-2
(3);]
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[(iii) 4.5% to the Constitutional Defense Restricted Account created by Section
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63C-4-103
;]
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[(iv) 3.0% to the Rural Electronic Commerce Communications System Fund created by
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Section
9-15-102
; and]
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[(v) 3.0% to the Rural Development Fund created by Section
9-14-102
.]
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[(3) Notwithstanding Subsections (2)(a), (2)(b), and (4), if the distribution required by
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Subsection (2)(a)(iii), (2)(b)(iii), or (4) would cause the balance of the Constitutional Defense
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Restricted Account to exceed $2,000,000, the director shall distribute to the Permanent
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Community Impact Fund an amount equal to the difference between:]
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[(a) what the total balance of the Constitutional Defense Restricted Account would be
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if, but for this Subsection (3), a distribution described in Subsection (2)(a)(iii), (2)(b)(iii), or (4)
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was made; and]
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[(b) $2,000,000.]
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[(4) Notwithstanding Subsections (2)(a) and (b), and except as provided in Subsection
341
(3), for each fiscal year the director shall deposit:]
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[(a) the first $750,000 of distributions required by Subsections (2)(a)(iv) and (2)(b)(iv)
343
into the Rural Electronic Commerce Communications System Fund; and]
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[(b) any amounts exceeding the $750,000 described in Subsection (4)(a) that would be
345
distributed into the Rural Electronic Commerce Communications System Fund but for this
346
Subsection (4) into the Constitutional Defense Restricted Account.]
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(ii) 50% to the Land Exchange Distribution Account created in Section
53C-3-203
; and
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(c) no later than the last day of the second month following each calendar quarter,
349
deposit the state's share of the mineral bonus, rental, and royalty revenue generated from the
350
lease of minerals on exchanged lands or exchanged mineral interests in the Land Exchange
351
Distribution Account created in Section
53C-3-203
.
352
[(5)] (3) (a) The director may retain up to 3% of the monies collected under Subsection
353
(1) to pay for administrative costs incurred under Subsection (1).
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(b) The director may deduct administrative costs [may be deducted prior to] before the
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distributions made under Subsections (2)(a) and (b).
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(c) The director shall keep the administrative cost deductions in separate accounts.
357
(d) (i) For purposes of this section, administrative costs[: (A)] include:
358
[(I)] (A) direct costs incurred by the administration; and
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[(II)] (B) out-of-pocket expenditures incurred by the administration that are directly
360
attributable to leasing or management of the acquired lands for subject minerals or acquired
361
mineral interests[; and].
362
[(B) shall be determined in a manner similar to that used by the federal government
363
pursuant to 30 U.S.C. Sec. 191(b).]
364
(ii) If the administration includes out-of-pocket expenditures under Subsection [(5)]
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(3)(d)(i) in determining its costs, those expenditures may not be included in its general
366
calculation of direct costs.
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(e) (i) At the end of each fiscal year, the director shall reconcile the amount actually
368
spent under Subsection [(5)] (3)(d) with the amount retained under Subsection [(5)] (3)(a).
369
(ii) The monies retained under Subsection [(5)] (3)(a) are nonlapsing.
370
Section 8.
Section
53C-3-203
is enacted to read:
371
53C-3-203. Land Exchange Distribution Account.
372
(1) As used in this section, "account" means the Land Exchange Distribution Account
373
created in Subsection (2)(a).
374
(2) (a) There is created within the General Fund a restricted account known as the Land
375
Exchange Distribution Account.
376
(b) The account shall consist of all revenue deposited in the account as required by