First Substitute S.B. 24

This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Mon, Feb 1, 2010 at 12:16 PM by rday. -->

Senator Dennis E. Stowell proposes the following substitute bill:

1 LAND EXCHANGE DISTRIBUTION ACCOUNT
2 AMENDMENTS
3 2010 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Dennis E. Stowell
6 House Sponsor: John G. Mathis
7
8 LONG TITLE
9 General Description:
10 This bill modifies provisions relating to the collection and distribution of revenues from
11 federal land exchange parcels.
12 Highlighted Provisions:
13 This bill:
14 . defines terms;
15 . provides that 50% of the revenue generated from oil shale leases on federal land
16 exchange parcels, net of amounts paid to the United States pursuant to a reserved
17 interest of the United States in oil shale, shall be deposited in the Land Exchange
18 Distribution Account;
19 . modifies the calculation of administrative costs related to the collection and
20 distribution of revenue from federal land exchange parcels;
21 . provides that 1% of the monies in the Land Exchange Distribution Account shall be
22 distributed to the Geological Survey for test wells, other hydrologic studies, and air
23 quality monitoring in the West Desert;
24 . reduces the amount of money distributed from the Land Exchange Distribution
25 Account to the Permanent Community Impact Fund from 7.5% to 6.5% of the

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27 . provides a repeal date; and
28 . makes technical amendments.
29 Monies Appropriated in this Bill:
30 None
31 Other Special Clauses:
32 None
33 Utah Code Sections Affected:
34 AMENDS:
35 53C-3-201, as last amended by Laws of Utah 2007, Chapter 303
36 53C-3-202, as last amended by Laws of Utah 2007, Chapter 303
37 53C-3-203, as last amended by Laws of Utah 2008, Chapter 216
38 63I-1-253, as last amended by Laws of Utah 2009, Chapter 299
39
40 Be it enacted by the Legislature of the state of Utah:
41 Section 1. Section 53C-3-201 is amended to read:
42 53C-3-201. Definitions.
43 As used in this part:
44 (1) "Acquired lands" means [those] lands acquired by the administration under the
45 agreement.
46 (2) "Acquired mineral interests" means mineral interests acquired by the administration
47 pursuant to Section 3(F), (K), (L), or (M) of the agreement.
48 (3) "Agreement" means the Agreement to Exchange Utah School Trust Lands Between
49 the State of Utah and the United States of America, signed May 8, 1998, as ratified by the Utah
50 School and Lands Exchange Act of 1998, Pub. L. No. 105-335.
51 (4) "Exchange" means [any] a land or mineral interest exchange by the administration
52 and the United States of America after March 1, 2007 that is directed by Congressional action.
53 (5) "Exchanged lands" means [those] lands:
54 (a) acquired by the administration through an exchange[.]; and
55 (b) reduced in value to take into account the presence of minerals subject to leasing
56 under the Mineral Leasing Act, 30 U.S.C. Sec. 181 et seq.

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Senate 2nd Reading Amendments 2-1-2010 rd/aos 57

(6) "Exchanged mineral interests" means mineral interests:
58 (a) acquired by the administration through an exchange[.]; and
59 (b) reduced in value to take into account the presence of minerals subject to leasing
60 under the Mineral Leasing Act, 30 U.S.C. Sec. 181 et seq.
61 (7) "Identified tracts" means the tracts identified in Section 3(F), (G), (J), (K), (L), and
62 (M) of the agreement, generally referred to as the Cottonwood Tract, Westridge Coal Tract,
63 Ferron Field, Mill Fork Tract, Dugout Canyon Tract, Muddy Tract, and North Horn Coal Tract.
64 (8) "Subject mineral" means [any] a mineral that is covered by the Mineral [Lands]
65 Leasing Act, 30 U.S.C. Sec.181 et seq.[, as amended through May 3, 1999.]
66 Section 2. Section 53C-3-202 is amended to read:
67 53C-3-202. Collection and distribution of revenues from federal land exchange
68 parcels.
69 (1) The director shall collect all bonus payments, rentals, and royalties from the lease
70 of:
71 (a) minerals on acquired lands;
72 (b) acquired mineral interests;
73 (c) minerals on exchanged lands; and
74 (d) exchanged mineral interests.
75 (2) [The] No later than the last day of the second month following each calendar
76 quarter, the director shall S. distribute .S :
77 (a) [no later than the last day of the second month following each calendar quarter,]
78 S. [ distribute all ] .S bonus payments received during the calendar quarter from the lease of coal, oil
79 and gas, and coalbed methane on the identified tracts as follows:
80 (i) 50% to the United States; and
81 (ii) 50% to the Land Exchange Distribution Account created in Section 53C-3-203 ;
82 (b) [no later than the last day of the second month following each calendar quarter,]
83 S. [ distribute all ] .S rentals and royalties received during the calendar quarter from the lease of
83a subject
84 minerals on the acquired lands and the lease of acquired mineral interests as follows:
85 (i) 50% to the Land Grant Management Fund created by Section 53C-3-101 ; and
86 (ii) 50% to the Land Exchange Distribution Account created in Section 53C-3-203 ;
87 [and]

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Senate 2nd Reading Amendments 2-1-2010 rd/aos 88

(c) [no later than the last day of the second month following each calendar quarter,]
89 S. [ deposit ] .S [the state's share] S. [ 50% of the ] .S mineral bonus, rental, and royalty
89a revenue generated from
90 the lease of subject minerals, other than oil shale, on exchanged lands or from the lease of
91 exchanged mineral interests, other than interests in oil shale, S. [ in ] as follows:
91a (i) 50% to the Land Grant Management Fund created by Section 53C-3-101; and
91b (ii) 50% to .S the Land Exchange Distribution
92 Account created in Section 53C-3-203 [.]; and
93 (d) S. [ deposit 50% of the ] .S mineral bonus, rental, and royalty revenue generated from
93a the
94 lease of oil shale on exchanged lands or the lease of exchanged mineral interests that are
95 interests in oil shale, net of amounts paid to the United States pursuant to a reserved interest of
96 the United States in oil shale, S. [ in ] as follows:
96a (i) 50% to the Land Grant Management Fund created by Section 53C-3-101; and
96b (ii) 50% to .S the Land Exchange Distribution Account created in Section
97 53C-3-203 .
98 (3) (a) [The] Except as provided in Subsection (3)(c), the director may retain up to 3%
99 of the monies collected under Subsection (1) to pay for administrative costs incurred under
100 [Subsection] Subsections (1) and (2).
101 (b) [The] Except as provided in Subsection (3)(c), the director may deduct
102 administrative costs before [the] distributions are made under [Subsections (2)(a) and (b)]
103 Subsection (2).
104 (c) The director may not deduct administrative costs from the portion of collections
105 derived from minerals on exchanged lands or exchanged mineral interests that is equal to the
106 United States' reserved interest in oil shale.
107 [(c)] (d) The director shall keep the administrative cost deductions in separate
108 accounts.
109 [(d) (i) For purposes of this section, administrative costs include:]
110 [(A) direct costs incurred by the administration; and]
111 [(B) out-of-pocket expenditures incurred by the administration that are directly
112 attributable to leasing or management of the acquired lands for subject minerals or acquired
113 mineral interests.]
114 [(ii) If the administration includes out-of-pocket expenditures under Subsection
115 (3)(d)(i) in determining its costs, those expenditures may not be included in its general
116 calculation of direct costs.]
117 [(e) (i) At the end of each fiscal year, the director shall reconcile the amount actually
118 spent under Subsection (3)(d) with the amount retained under Subsection (3)(a).]

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- 5 - 119 [(ii)] (e) The monies retained under Subsection (3)(a) are nonlapsing.
120 (f) The director shall distribute in accordance with Subsection (2) the unused balance
121 of the monies retained under Subsection (3)(a) that exceeds $2,000,000 at the end of a fiscal
122 year.
123 Section 3. Section 53C-3-203 is amended to read:
124 53C-3-203. Land Exchange Distribution Account.
125 (1) As used in this section, "account" means the Land Exchange Distribution Account
126 created in Subsection (2)(a).
127 (2) (a) There is created within the General Fund a restricted account known as the Land
128 Exchange Distribution Account.
129 (b) The account shall consist of [all] revenue deposited in the account as required by
130 [Subsections 53C-3-202 (2)(a)(ii) and (2)(b)(ii)] Section 53C-3-202 .
131 (3) (a) The state treasurer shall invest monies in the account according to Title 51,
132 Chapter 7, State Money Management Act.
133 (b) The Division of Finance shall deposit interest or other earnings derived from
134 investment of account monies into the General Fund.
135 (4) [For fiscal years beginning on or after fiscal year 2007-08, because the revenue is
136 not derived from taxes, the] The Legislature shall annually appropriate from the account:
137 (a) 55% of all deposits made to the account to counties in amounts proportionate to the
138 amounts of mineral revenue generated from the acquired land, exchanged land, acquired
139 mineral interests, or exchanged mineral interests located in each county, to be used to mitigate
140 the impacts caused by mineral development;
141 (b) 25% of all deposits made to the account to counties in amounts proportionate to the
142 total surface and mineral acreage within each county that was conveyed to the United States
143 under the agreement or an exchange, to be used to mitigate the loss of mineral development
144 opportunities resulting from the agreement or exchange;
145 (c) 1.68% of all deposits made to the account to the State Board of Education, to be
146 used for education research and experimentation in the use of staff and facilities designed to
147 improve the quality of education in Utah;
148 (d) 1.66% of all deposits made to the account to the Geological Survey, to be used for
149 natural resources development in the state;

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- 6 - 150 (e) 1.66% of all deposits made to the account to the Water Research Laboratory at Utah
151 State University, to be used for water development in the state; and
152 (f) 7.5% of all deposits made to the account to the Constitutional Defense Restricted
153 Account created in Section 63C-4-103 .
154 (5) [For fiscal years 2007-08 and 2008-09] Beginning with fiscal year 2009-10, the
155 Legislature shall annually appropriate from the account [7.5%] 1% of all deposits made to the
156 account to the Geological Survey, to be used for test wells [and], other hydrologic studies, and
157 air quality monitoring in the West Desert.
158 (6) [For fiscal years beginning on or after] Beginning with fiscal year 2009-10, the
159 Legislature shall annually appropriate from the account [7.5%] 6.5% of all deposits made to the
160 account to the Permanent Community Impact Fund created in Section 9-4-303 , to be used for
161 grants to political subdivisions of the state to mitigate the impacts resulting from the
162 development or use of school and institutional trust lands.
163 Section 4. Section 63I-1-253 is amended to read:
164 63I-1-253. Repeal dates, Titles 53, 53A, and 53B.
165 The following provisions are repealed on the following dates:
166 (1) Section 53-3-232 , Conditional licenses, is repealed July 1, 2015.
167 (2) Title 53A, Chapter 1a, Part 6, Public Education Job Enhancement Program is
168 repealed July 1, 2010.
169 (3) Title 53A, Chapter 1a, Part 9, Voluntary Extended-day Kindergarten Program, is
170 repealed July 1, 2011.
171 (4) The State Instructional Materials Commission, created in Section 53A-14-101 , is
172 repealed July 1, 2011.
173 (5) Section 53A-17a-163 , Performance-based Compensation Pilot Program is repealed
174 July 1, 2011.
175 (6) Subsection 53C-3-203 (5), which provides for the distribution of monies from the
176 Land Exchange Distribution Account to the Geological Survey for test wells, other hydrologic
177 studies, and air quality monitoring in the West Desert, is repealed July 1, 2020.