First Substitute H.B. 145

This document includes Senate 2nd and 3rd Reading Floor Amendments incorporated into the bill on Wed, Mar 13, 2013 at 7:51 PM by lpoole. -->

Senator Wayne A. Harper proposes the following substitute bill:

1 YOUTH ORGANIZATION RESTRICTED
2 ACCOUNTS AND INCOME TAX CONTRIBUTIONS
3 2013 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Steve Eliason
6 Senate Sponsor: Curtis S. Bramble
7
8 LONG TITLE
9 General Description:
10 This bill enacts certain youth organization restricted accounts, provides for the
11 distribution of amounts deposited into the accounts, and enacts income tax
12 contributions for certain youth organizations.
13 Highlighted Provisions:
14 This bill:
15 . creates the Youth Development Organization Restricted Account;
16 . creates the Youth Character Organization Restricted Account;
17 . provides for the distribution of amounts deposited into the accounts;
18 . provides that the accounts are nonlapsing accounts;
19 . enacts an income tax contribution for a youth development organization;
20 . enacts an income tax contribution for a youth character organization;
21 . provides that if the collections from the contributions do not meet certain threshold
22 amounts, the State Tax Commission shall remove the designations for the
23 contributions from the individual income tax return and may not collect the
24 contributions; and
25 . makes technical and conforming changes.

26 Money Appropriated in this Bill:
27 None
28 Other Special Clauses:
29 This bill provides an effective date.
30 This bill provides retrospective operation for a taxable year beginning on or after
31 January 1, 2013.
32 Utah Code Sections Affected:
33 AMENDS:
34 59-10-1304, as last amended by Laws of Utah 2011, Chapter 294
35 63J-1-602.2 (Effective 07/01/13), as last amended by Laws of Utah 2012, Chapters 388
36 and 397
37 ENACTS:
38 35A-8-1901, Utah Code Annotated 1953
39 35A-8-1902, Utah Code Annotated 1953
40 35A-8-1903, Utah Code Annotated 1953
41 35A-8-1904, Utah Code Annotated 1953
42 35A-8-2001, Utah Code Annotated 1953
43 35A-8-2002, Utah Code Annotated 1953
44 35A-8-2003, Utah Code Annotated 1953
45 35A-8-2004, Utah Code Annotated 1953
46 59-10-1316, Utah Code Annotated 1953
47 59-10-1317, Utah Code Annotated 1953
48
49 Be it enacted by the Legislature of the state of Utah:
50 Section 1. Section 35A-8-1901 is enacted to read:
51 Part 19. Youth Development Organization Restricted Account Act
52 35A-8-1901. Title.
53 This part is known as the "Youth Development Organization Restricted Account Act."
54 Section 2. Section 35A-8-1902 is enacted to read:
55 35A-8-1902. Definitions.
56 As used in this part:

57 (1) "Account" means the Youth Development Organization Restricted Account created
58 in Section 35A-8-1903 .
59 (2) "Qualified youth development organization council" means a youth development
60 organization council in the state that the division determines to be eligible to receive a
61 distribution under Section 35A-8-1904 .
62 (3) "Youth development organization" means an organization that:
63 (a) is exempt from federal income taxation under Section 501(c)(3), Internal Revenue
64 Code;
65 (b) has more than 180,000 youth members within the state;
66 (c) has as its mission to prepare youth members to make ethical and moral choices over
67 their lifetimes; and
68 (d) accomplishes the mission described in Subsection (3)(c) by building character,
69 teaching citizenship, and developing personal fitness.
70 (4) "Youth development organization council" means a council that:
71 (a) is chartered by a youth development organization;
72 (b) is exempt from federal income taxation under Section 501(c)(3), Internal Revenue
73 Code;
74 (c) has more than 35,000 youth members within the state;
75 (d) covers a specified geographic area within the state;
76 (e) has as its mission to prepare youth members to make ethical and moral choices over
77 their lifetimes; and
78 (f) accomplishes the mission described in Subsection (4)(e) by building character,
79 teaching citizenship, and developing personal fitness.
80 (5) "Youth member" means a person who:
81 (a) has a valid membership in a youth development organization;
82 (b) is affiliated with a particular youth development organization council; and
83 (c) is 20 years of age or younger.
84 Section 3. Section 35A-8-1903 is enacted to read:
85 35A-8-1903. Youth Development Organization Restricted Account -- Creation --
86 Interest.
87 (1) There is created within the General Fund a restricted account known as the "Youth

88 Development Organization Restricted Account."
89 (2) The account shall be funded by:
90 (a) contributions deposited into the account in accordance with Section 59-10-1316 ;
91 (b) private contributions;
92 (c) donations or grants from public or private entities; and
93 (d) interest described in Subsection (3).
94 (3) (a) The account shall earn interest.
95 (b) Interest earned on the account shall be deposited into the account.
96 (4) The division shall distribute money appropriated by the Legislature to the division
97 from the restricted account as provided in Section 35A-8-1904 .
98 Section 4. Section 35A-8-1904 is enacted to read:
99 35A-8-1904. Division to distribute amounts deposited into Youth Development
100 Organization Restricted Account -- Procedures for distribution.
101 (1) Subject to the other provisions of this section, the division shall distribute amounts
102 deposited into the Youth Development Organization Restricted Account in accordance with
103 Section 35A-8-1903 to one or more qualified youth development organization councils in the
104 state.
105 (2) A qualified youth development organization council that receives a distribution
106 from the division under this section shall expend the distribution only to accomplish the
107 mission of the qualified youth development organization council described in Subsection
108 35A-8-1903 (4).
109 (3) An organization that seeks to receive a distribution from the division under this
110 section shall, on or before May 1 of each year, file an application with the division:
111 (a) on a form prescribed by the division;
112 (b) that contains information required by the division to establish that the organization
113 is a youth development organization council in the state; and
114 (c) that contains any other information prescribed by the commission.
115 (4) (a) The division shall, on or before June 1 of each year, determine whether an
116 organization that files an application with the division under Subsection (3) is a youth
117 development organization council in the state.
118 (b) (i) If the division determines that an organization that files an application with the

119 division under Subsection (3) is a youth development organization council, the division shall,
120 on or before June 15 of each year, issue the organization a certificate stating that the
121 organization is a qualified youth development organization council.
122 (ii) If the division determines that an organization that files an application with the
123 division under Subsection (3) is not a youth development organization council, the division
124 shall provide the organization written notice stating the reasons for its determination.
125 (5) On or before July 1 of each year, the division shall make the distributions required
126 by this section to each qualified youth development organization council as follows:
127 (a) the division shall, for each qualified youth development organization council,
128 calculate a percentage:
129 (i) the numerator of which is the youth membership of the qualified youth development
130 organization council; and
131 (ii) the denominator of which is the total youth membership of the qualified youth
132 development organization councils;
133 (b) the division shall, for each qualified youth development organization council,
134 calculate an amount by multiplying the percentage the division calculates under Subsection
135 (5)(a) by S. the lesser of:
135a (i) .S the amount the Legislature appropriates to the division from the account for the fiscal
136 year; S. or
136a (ii) the balance in the account as of June 1 of that year; .S and
137 (c) S. the division shall .S distribute the amount the division calculates under
137a Subsection (5)(b) to each
138 qualified youth development organization council.
139 Section 5. Section 35A-8-2001 is enacted to read:
140 Part 20. Youth Character Organization Restricted Account Act
141 35A-8-2001. Title.
142 This part is known as the "Youth Character Organization Restricted Account Act."
143 Section 6. Section 35A-8-2002 is enacted to read:
144 35A-8-2002. Definitions.
145 As used in this part:
146 (1) "Account" means the Youth Character Organization Restricted Account created in
147 Section 35A-8-2003 .
148 (2) "Qualified youth character organization council" means a youth character
149 organization council in the state that the division determines to be eligible to receive a

150 distribution under Section 35A-8-2004 .
151 (3) "Youth character organization" means an organization that is chartered under 36
152 U.S.C. S. [ § ] Sec. .S 80301.
153 (4) "Youth character organization council" means a council that:
154 (a) is chartered by a youth character organization;
155 (b) is exempt from federal income taxation under Section 501(c)(3), Internal Revenue
156 Code; and
157 (c) covers a specified geographic area that includes a geographic area within the state.
158 (5) "Youth member" means a person who:
159 (a) has a valid membership in a youth character organization;
160 (b) is affiliated with a particular youth character organization council; and
161 (c) is 18 years of age or younger.
162 Section 7. Section 35A-8-2003 is enacted to read:
163 35A-8-2003. Youth Character Organization Restricted Account -- Creation --
164 Interest.
165 (1) There is created within the General Fund a restricted account known as the "Youth
166 Character Organization Restricted Account."
167 (2) The account shall be funded by:
168 (a) contributions deposited into the account in accordance with Section 59-10-1317 ;
169 (b) private contributions;
170 (c) donations or grants from public or private entities; and
171 (d) interest described in Subsection (3).
172 (3) (a) The account shall earn interest.
173 (b) Interest earned on the account shall be deposited into the account.
174 (4) The division shall distribute money appropriated by the Legislature to the division
175 from the restricted account as provided in Section 35A-8-2004 .
176 Section 8. Section 35A-8-2004 is enacted to read:
177 35A-8-2004. Division to distribute amounts deposited into Youth Character
178 Organization Restricted Account -- Procedures for distribution.
179 (1) Subject to the other provisions of this section, the division shall distribute amounts
180 deposited into the Youth Character Organization Restricted Account in accordance with

181 Section 35A-8-2003 to one or more qualified youth character organization councils in the state.
182 (2) A qualified youth character organization that receives a distribution from the
183 division under this section shall expend the distribution only to accomplish the purposes
184 described in 36 U.S.C. S. [ § ] Sec. .S 80302.
185 (3) An organization that seeks to receive a distribution from the division under this
186 section shall, on or before May 1 of each year, file an application with the division:
187 (a) on a form prescribed by the division;
188 (b) that contains information required by the division to establish that the organization
189 is a youth character organization council in the state; and
190 (c) that contains any other information prescribed by the commission.
191 (4) (a) The division shall, on or before June 1 of each year, determine whether an
192 organization that files an application with the division under Subsection (3) is a youth character
193 organization council in the state.
194 (b) (i) If the division determines that an organization that files an application with the
195 division under Subsection (3) is a youth character organization council, the division shall, on or
196 before June 15 of each year, issue the organization a certificate stating that the organization is a
197 qualified youth character organization council.
198 (ii) If the division determines that an organization that files an application with the
199 division under Subsection (3) is not a youth character organization council, the division shall
200 provide the organization written notice stating the reasons for its determination.
201 (5) On or before July 1 of each year, the division shall make the distributions required
202 by this section to each qualified youth character organization council as follows:
203 (a) the division shall, for each qualified youth character organization council, calculate
204 a percentage:
205 (i) the numerator of which is the youth membership of the qualified youth character
206 organization S. council .S ; and
207 (ii) the denominator of which is the total youth membership of the qualified youth
208 character organization councils;
209 (b) the division shall, for each qualified youth character organization council, calculate
210 an amount by multiplying the percentage the division calculates under Subsection (5)(a) by S. the
210a lesser of:
210b (i) .S the
211 amount the Legislature appropriates to the division from the account for the fiscal year; S. or
211a (ii) the balance in the account as of June 1 of that year; .S and

212 (c) S. the division shall .S distribute the amount the division calculates under
212a Subsection (5)(b) to each
213 qualified youth character organization council.
214 Section 9. Section 59-10-1304 is amended to read:
215 59-10-1304. Removal of designation and prohibitions on collection for certain
216 contributions on income tax return -- Conditions for removal and prohibitions on
217 collection -- Commission reporting requirements.
218 (1) (a) If a contribution or combination of contributions described in Subsection (1)(b)
219 generate less than $30,000 per year for three consecutive years, the commission shall remove
220 the designation for the contribution from the individual income tax return and may not collect
221 the contribution from a resident or nonresident individual beginning two taxable years after the
222 three-year period for which the contribution generates less than $30,000 per year.
223 (b) The following contributions apply to Subsection (1)(a):
224 (i) the contribution provided for in Section 59-10-1305 ;
225 (ii) the contribution provided for in Section 59-10-1306 ;
226 (iii) the sum of the contributions provided for in Subsection 59-10-1307 (1);
227 (iv) the contribution provided for in Section 59-10-1308 ;
228 (v) the contribution provided for in Section 59-10-1310 ; [or]
229 (vi) the contribution provided for in Section 59-10-1315 [.]; or
230 (vii) the sum of the contributions provided for in:
231 (A) Section 59-10-1316 ; and
232 (B) Section 59-10-1317 .
233 (2) If the commission removes the designation for a contribution under Subsection (1),
234 the commission shall report to the Revenue and Taxation Interim Committee that the
235 commission removed the designation on or before the November interim meeting of the year in
236 which the commission determines to remove the designation.
237 Section 10. Section 59-10-1316 is enacted to read:
238 59-10-1316. Contribution to Youth Development Organization Restricted
239 Account.
240 (1) Except as provided in Section 59-10-1304 , for a taxable year beginning on or after
241 January 1, 2013, a resident or nonresident individual who files an individual income tax return
242 under this chapter may designate on the resident or nonresident individual's individual income

243 tax return a contribution as provided in this section to be:
244 (a) deposited into the Youth Development Organization Restricted Account created in
245 Section 35A-8-1903 ; and
246 (b) expended as provided in Title 35A, Chapter 8, Part 19, Youth Development
247 Organization Restricted Account Act.
248 (2) The commission shall:
249 (a) determine the total amount of contributions designated in accordance with this
250 section for a taxable year; and
251 (b) credit the amount described in Subsection (2)(a) to the Youth Development
252 Organization Restricted Account.
253 Section 11. Section 59-10-1317 is enacted to read:
254 59-10-1317. Contribution to Youth Character Organization Restricted Account.
255 (1) Except as provided in Section 59-10-1304 , for a taxable year beginning on or after
256 January 1, 2013, a resident or nonresident individual who files an individual income tax return
257 under this chapter may designate on the resident or nonresident individual's individual income
258 tax return a contribution as provided in this section to be:
259 (a) deposited into the Youth Character Organization Restricted Account created in
260 Section 35A-8-2003 ; and
261 (b) expended as provided in Title 35A, Chapter 8, Part 20, Youth Character
262 Organization Restricted Account Act.
263 (2) The commission shall:
264 (a) determine the total amount of contributions designated in accordance with this
265 section for a taxable year; and
266 (b) credit the amount described in Subsection (2)(a) to the Youth Character
267 Organization Restricted Account.
268 Section 12. Section 63J-1-602.2 (Effective 07/01/13) is amended to read:
269 63J-1-602.2 (Effective 07/01/13). List of nonlapsing funds and accounts -- Title 31
270 through Title 45.
271 (1) Appropriations from the Technology Development Restricted Account created in
272 Section 31A-3-104 .
273 (2) Appropriations from the Criminal Background Check Restricted Account created in

274 Section 31A-3-105 .
275 (3) Appropriations from the Captive Insurance Restricted Account created in Section
276 31A-3-304 , except to the extent that Section 31A-3-304 makes the money received under that
277 section free revenue.
278 (4) Appropriations from the Title Licensee Enforcement Restricted Account created in
279 Section 31A-23a-415 .
280 (5) Appropriations from the Health Insurance Actuarial Review Restricted Account
281 created in Section 31A-30-115 .
282 (6) Appropriations from the Insurance Fraud Investigation Restricted Account created
283 in Section 31A-31-108 .
284 (7) Appropriations from the Underage Drinking Prevention Media and Education
285 Campaign Restricted Account created in Section 32B-2-306 .
286 (8) The Youth Development Organization Restricted Account created in Section
287 35A-8-1903 .
288 (9) The Youth Character Organization Restricted Account created in Section
289 35A-8-2003 .
290 [(8)] (10) Funding for a new program or agency that is designated as nonlapsing under
291 Section 36-24-101 .
292 [(9)] (11) Appropriations from the Oil and Gas Conservation Account created in
293 Section 40-6-14.5 .
294 [(10)] (12) Appropriations from the Electronic Payment Fee Restricted Account
295 created by Section 41-1a-121 to the Motor Vehicle Division.
296 [(11)] (13) Funds available to the Tax Commission under Section 41-1a-1201 for the:
297 (a) purchase and distribution of license plates and decals; and
298 (b) administration and enforcement of motor vehicle registration requirements.
299 Section 13. Effective date -- Retrospective operation.
300 (1) Except as provided in Subsection (2), this bill takes effect on January 1, 2014.
301 (2) The actions affecting the following sections have retrospective operation for a
302 taxable year beginning on or after January 1, 2013:
303 (a) Section 59-10-1304 ;
304 (b) Section 59-10-1316 ; and

305 (c) Section 59-10-1317 .

[Bill Documents]