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H.B. 134

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MINERAL LEASE AMENDMENTS

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1998 GENERAL SESSION

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STATE OF UTAH

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Sponsor: Jack A. Seitz

5    AN ACT RELATING TO REVENUE AND TAXATION; REDISTRIBUTING A PORTION OF
6    MINERAL LEASE ACCOUNT MONIES FROM THE BOARD OF REGENTS TO THE
7    PERMANENT COMMUNITY IMPACT FUND, THE DEPARTMENT OF
8    TRANSPORTATION, h [ AND ] h THE DEPARTMENT OF COMMUNITY AND ECONOMIC
9    DEVELOPMENT h , AND CERTAIN COUNTIES; PROVIDING THAT AFTER THE LEGISLATURE
9a     MAKES CERTAIN APPROPRIATIONS THE REMAINDER OF THE DEPOSITS MADE TO THE MINERAL
9b     LEASE ACCOUNT SHALL BE APPROPRIATED TO THE PERMANENT COMMUNITY IMPACT FUND h ;
9c    MAKING TECHNICAL CHANGES; AND PROVIDING AN EFFECTIVE
10    DATE.
11    This act affects sections of Utah Code Annotated 1953 as follows:
12    AMENDS:
13         59-21-2, as last amended by Chapter 36, Laws of Utah 1996
14    Be it enacted by the Legislature of the state of Utah:
15        Section 1. Section 59-21-2 is amended to read:
16         59-21-2. Mineral Bonus Account -- Allocation of monies from Mineral Lease
17     Account.
18        (1) (a) The Mineral Bonus Account is created within the General Fund.
19        (b) All bonus money received by the state under Subsection 59-21-1(3) shall be deposited
20    in this account.
21        (c) The Legislature shall appropriate from the Mineral Bonus Account in accordance with
22    Section 35 of the Mineral Leasing Act of 1920, 30 U.S.C. Sec. 191.
23        (d) The state treasurer shall:
24        (i) invest the money in the Mineral Bonus Account by following the procedures and
25    requirements of Title 51, Chapter 7, State Money Management Act; and
26        (ii) deposit all interest or other earnings derived from the account into the Mineral Bonus
27    Account.
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1        (2) The Legislature shall [appropriate,] make appropriations from the Mineral Lease
2    Account[:] as provided in this Subsection (2).
3        (a) In addition to the appropriation under Subsection (2)(b)(ii), the Legislature shall
4    appropriate 32.5% of all deposits made to the Mineral Lease Account to the Permanent
5    Community Impact Fund established by Section 9-4-303[;].
6        (b) (i) [except] Except as provided in Subsection (2)(b)(ii), the Legislature shall
7    appropriate 33.5% of all deposits made to the Mineral Lease Account to the Board of Regents for
8    allocation to the state's institutions of higher education[;].
9        (ii) [in] (A) For the fiscal year [1996-97,] beginning on July 1, 1996, and ending on June
10    30, 1997, the Legislature shall appropriate 20% of the mineral lease funds that would otherwise
11    be appropriated to the Board of Regents under Subsection (2)(b)(i) [shall be appropriated] to the
12    Permanent Community Impact Fund [and an equivalent amount shall be appropriated from the
13    General Fund to the Board of Regents to replace the mineral lease monies that the Board of
14    Regents would have otherwise received . An].
15        (B) For the fiscal year beginning on July 1, 1997, and ending on June 30, 1998, the
16    Legislature shall appropriate 40% of the mineral lease funds that would otherwise be appropriated
17    to the Board of Regents under Subsection (2)(b)(i) to the Permanent Community Impact Fund.
18        (C) For fiscal years beginning on or after July 1, 1998, the Legislature shall annually
19    appropriate as follows an additional 20% of the funds that would otherwise be appropriated to the
20    Board of Regents under Subsection (2)(b)(i) [shall be appropriated to] until the Legislature
21    appropriates 100% of the funds that would otherwise be appropriated to the Board of Regents:
22        (I) the Legislature shall make an appropriation to the Department of Transportation as
23    provided in Subsection (2)(f)(ii);
24        (II) the Legislature shall make an appropriation to the Department of Community and
25    Economic Development as provided in Subsection (2)(g); h [ and ]
25a          (III) THE LEGISLATURE SHALL MAKE THE APPROPRIATIONS PROVIDED FOR IN SUBSECTION
25b     (2)(h); AND h
26         h [ (III) ] IV h the Legislature shall, after making the appropriations under Subsections
27    (2)(b)(ii)(B)(I) h [ and (II) ] THROUGH (III) h , appropriate the remainder of the funds that would
27a    otherwise be
28    appropriated to the Board of Regents to the Permanent Community Impact Fund [in each
29    succeeding fiscal year until 100% of the funds currently appropriated to the Board of Regents
30    under Subsection (2)(b)(i) are appropriated to the Permanent Community Impact Fund]. [An]
31        (D) For fiscal years beginning on or after July 1, 1996, the Legislature shall appropriate

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1    an equivalent amount [shall be appropriated] from the General Fund to the Board of Regents [each
2    of the succeeding fiscal years] to replace the mineral lease monies the Board of Regents would
3    have otherwise received under Subsection (2)(b)(i).
4        (c) The Legislature shall appropriate 2.25% of all deposits made to the Mineral Lease
5    Account to the State Board of Education, to be used for education research and experimentation
6    in the use of staff and facilities designed to improve the quality of education in Utah[;].
7        (d) The Legislature shall appropriate 2.25% of all deposits made to the Mineral Lease
8    Account to the Utah Geological Survey, to be used for activities carried on by the survey having
9    as a purpose the development and exploitation of natural resources in the state[;].
10        (e) The Legislature shall appropriate 2.25% of all deposits made to the Mineral Lease
11    Account to the Water Research Laboratory at Utah State University, to be used for activities
12    carried on by the laboratory having as a purpose the development and exploitation of water
13    resources in the state[;].
14        (f) [25%] The Legislature shall appropriate the following percentages of all deposits made
15    to the Mineral Lease Account to the Department of Transportation, to be distributed [to special
16    service districts established by counties] as follows for the purpose of constructing, repairing, and
17    maintaining roads, or for other purposes authorized by [law; and (g)] statute:
18        (i) the Legislature shall annually appropriate to the Department of Transportation 25% of
19    all deposits made to the Mineral Lease Account to be distributed to special service districts within
20    counties; and
21        (ii) in addition to the appropriation under Subsection (2)(f)(i), the Legislature shall make
22    the following appropriations from mineral lease funds that would be appropriated to the Board of
23    Regents under Subsection (2)(b)(i) except for the appropriations provided in Subsection
24    (2)(b)(ii)(C):
25        (A) for the fiscal year beginning on July 1, 1998, and ending on June 30, 1999, the
26    Legislature shall appropriate 5% of all deposits made to the Mineral Lease Account to the
27    Department of Transportation to be distributed to special service districts within counties;
28        (B) for the fiscal year beginning on July 1, 1999, and ending on June 30, 2000, the
29    Legislature shall appropriate 10% of all deposits made to the Mineral Lease Account to the
30    Department of Transportation to be distributed to special service districts within counties; and
31        (C) for fiscal years beginning on or after July 1, 2000, the Legislature shall appropriate

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1    15% of all deposits made to the Mineral Lease Account to the Department of Transportation to be
2    distributed to special service districts within counties.
3        (g) (i) The Legislature shall appropriate the following percentages of all deposits made to
4    the Mineral Lease Account to the Department of Community and Economic Development to be
5    distributed as follows for the purpose of constructing, repairing, and maintaining roads, or for other
6    purposes authorized by statute:
7        (A) for the fiscal year beginning on July 1, 1998, and ending on June 30, 1999, the
8    Legislature shall appropriate 2.5% of all deposits made to the Mineral Lease Account to the
9    Department of Community and Economic Development to be distributed to special service
10    districts within counties:
11        (I) of the third, fourth, fifth, or sixth class;
12        (II) in which 4.5% or less of the mineral lease moneys within the state are generated; and
13        (III) that are significantly socially or economically impacted by the development of
14    minerals under the Mineral Lands Leasing Act, 30 U.S.C. Sec. 191, as a result of either the
15    transportation of hydrocarbons h , INCLUDING SOLID HYDROCARBONS AS DEFINED IN SECTION
15a     59-5-101, h within the county, the employment in hydrocarbon extraction h , INCLUDING THE
15b     EXTRACTION OF SOLID HYDROCARBONS AS DEFINED IN SECTION 59-5-101, h of
16    persons residing within the county, or both; and
17        (B) for fiscal years beginning on or after July 1, 1999, the Legislature shall appropriate 5%
18    of all deposits made to the Mineral Lease Account to the Department of Community and Economic
19    Development to be distributed to special service districts within counties meeting the requirements
20    of Subsections (2)(g)(i)(A)(I) through (III).
21        (ii) The executive director of the Department of Community and Economic Development:
22        (A) shall determine whether a county meets the requirements of Subsections (2)(g)(i)(A)(I)
23    through (III);
24        (B) shall distribute the appropriations under Subsection (2)(g)(i) to special service districts
25    within counties that meet the requirements of Subsections (2)(g)(i)(A)(I) through (III) as provided
26    in Subsection (2)(g)(iii); and
27        (C) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, may
28    make rules:
29        (I) providing a procedure for making the distributions under Subsection (2)(g)(ii)(B) to
30    special service districts; and
31        (II) defining the term "population" for purposes of Subsection (2)(g)(ii)(B).

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1        (iii) For purposes of distributing the appropriations under Subsection (2)(g)(i) to special
2    service districts within counties, the Department of Community and Economic Development shall:
3        (A) (I) allocate 50% of the appropriations equally among the counties meeting the
4    requirements of Subsections (2)(g)(i)(A)(I) through (III); and
5        (II) allocate 50% of the appropriations based on the ratio that the population of each
6    county meeting the requirements of Subsections (2)(g)(i)(A)(I) through (III) bears to the total
7    population of all of the counties meeting the requirements of Subsections (2)(g)(i)(A)(I) through
8    (III); and
9        (B) after making the allocations described in Subsection (2)(g)(iii)(A), distribute the
10    allocated revenues to special service districts within the counties as determined by the executive
11    director of the Department of Community and Economic Development after consulting with the
12    county legislative bodies of the counties meeting the requirements of Subsection (2)(g)(i)(A)(I)
13    through (III).
14        (h) The Legislature shall h [ appropriate to the extent available after the allocations provided ] h
15     S [in Subsections (2)(a) through (2)] s [(f)] h [ (g) are made ] MAKE THE FOLLOWING APPROPRIATIONS
15a     FROM THE MINERAL LEASE ACCOUNT h :
16        (i) an amount equal to 52 cents multiplied by the number of acres of school or institutional
17    trust lands, lands owned by the Division of Parks and Recreation, [or] and lands owned by the
18    Division of Wildlife Resources that are not under an in lieu of taxes contract, to each county in
19    which those lands are located;
20        (ii) to each county in which school or institutional trust lands are transferred to the federal
21    government after December 31, 1992, an amount equal to the number of transferred acres in the
22    county multiplied by a payment per acre equal to the difference between 52 cents per acre and the
23    per acre payment made to that county in the most recent payment under the federal payment in lieu
24    of taxes program, 31 U.S.C. Sec. 6901 or P.L. 97-258 as amended, unless the federal payment
25    was equal to or exceeded the 52 cents per acre, in which case no payment shall be made for the
26    transferred lands; and
27        (iii) to each county in which federal lands, which are entitlement lands under the federal
28    in lieu of taxes program, are transferred to the school or institutional trust, an amount equal to the
29    number of transferred acres in the county multiplied by a payment per acre equal to the difference
30    between the most recent per acre payment made under the federal payment in lieu of taxes program
31    and 52 cents per acre, unless the federal payment was equal to or less than 52 cents per acre, in


Text Box

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1    which case no payment shall be made for the transferred land.
1a         h (i) BEGINNING ON JULY 1, 2000, THE LEGISLATURE SHALL, AFTER MAKING THE
1b     APPROPRIATIONS PROVIDED FOR IN SUBSECTIONS (2)(a) THROUGH (h), APPROPRIATE THE
1c     REMAINDER OF ALL DEPOSITS MADE TO THE MINERAL LEASE ACCOUNT TO THE PERMANENT
1d     COMMUNITY IMPACT FUND. h
2        (3) (a) Until July 1, 1999, the Board of Regents may not:
3         (i) increase the total amount of federal mineral lease funds allocated during any fiscal year
4    above the amount allocated during the last fiscal year more than the percentage increase in the
5    Consumer Price Index published by the United States Department of Labor for the last calendar
6    year; and
7        (ii) increase the total amount allocated more than 10% above the amount allocated during
8    the last fiscal year.
9        (b) If the total amount of mineral lease funds allocated to a recipient agency or institution
10    in any fiscal year is less than the total amount allocated for the last fiscal year, the allocation to that
11    agency or institution for the next fiscal year shall be increased by the amount of the reduction
12    before calculating and applying the percent limitation.
13        (c) (i) Higher education institutions shall expend the federal mineral lease funds
14    apportioned to them via institutional work programs.
15        (ii) The Board of Regents may approve those programs only when it is satisfied that a
16    majority of the funds will be expended for research, educational, or public service programs of
17    benefit to subdivisions of the state that are socially or economically impacted by the development
18    of minerals leased under the Mineral Lands Leasing Act in the planning, construction, and
19    maintenance of public facilities, and the provision of public services.
20        (d) (i) Except as provided in Subsection (3)(d)(ii), each institution of higher education is
21    entitled to an amount of mineral lease funds equal to the proportion of the total amount available
22    that the average number of full-time students enrolled during the preceding year at that institution
23    bears to the total enrollment of all institutions.
24        (ii) Enrollment at the University of Utah and Utah State University shall first be multiplied
25    by 1.25 and that product shall constitute the enrollment of the University of Utah and Utah State
26    University for the purposes of determining their proportionate allocation.
27        (4) The federal mineral lease funds allocated to the Water Research Laboratory at Utah
28    State University are in addition to any other money to which Utah State University is entitled
29    under this section.
30        (5) Federal mineral lease funds distributed by the Department of Transportation under
31    Subsection (2)(f) shall be allocated to county special service districts in amounts proportionate to

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1    the amount of federal mineral lease money generated by the county in which a special service
2    district is located.
3        (6) (a) Each county receiving money under Subsection (2)[(g)](h) shall give the money
4    to a school district or other special [purpose governmental entity] service district within the county.
5        (b) Beginning in fiscal year 1994-95 and in each year thereafter, the amount per acre
6    provided in Subsection (2)[(g)](h)(i) shall adjust to reflect changes in the rate of inflation as
7    measured by the Consumer Price Index.
8        (7) Each agency, board, institution of higher education, and political subdivision receiving
9    money under this chapter shall provide the Legislature, through the Office of the Legislative Fiscal
10    Analyst, with a complete accounting of the use of that money on an annual basis. This accounting
11    shall:
12        (a) include actual expenditures for the prior fiscal year, budgeted expenditures for the
13    current fiscal year, and planned expenditures for the following fiscal year; and
14        (b) be reviewed by the Economic Development and Human Resources Appropriation
15    Subcommittee as part of its normal budgetary process under Title 63, Chapter 38, Budgetary
16    Procedures Act.
17        (8) All monies in or appropriated to the Targeted Allocation Fund shall be transferred to
18    the Permanent Community Impact Fund.
19        Section 2. Effective date.
20        This act takes effect on July 1, 1998.




Legislative Review Note
    as of 12-16-97 12:25 PM


A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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