S.B. 187

1

DISPOSITION OF REVENUE FROM CERTAIN
2 SCHOOL AND INSTITUTIONAL TRUST
3 LANDS
4 1999 GENERAL SESSION
5 STATE OF UTAH
6 Sponsor: Leonard M. Blackham
7 AN ACT RELATING TO STATE LANDS; PROVIDING THAT THE DIRECTOR OF THE
8 SCHOOL AND INSTITUTIONAL TRUST LANDS ADMINISTRATION IS RESPONSIBLE
9 FOR THE COLLECTION AND DISTRIBUTION OF ALL BONUS BIDS, RENTALS, AND
10 ROYALTIES FROM MINERAL LEASES ON LANDS ACQUIRED FROM THE FEDERAL
11 GOVERNMENT UNDER THE UTAH SCHOOLS AND LAND EXCHANGE ACT OF 1998;
12 PROVIDING DISTRIBUTION FORMULAS; PROVIDING FOR ADMINISTRATIVE COSTS;
13 CREATING A RURAL DEVELOPMENT FUND AND A RURAL DEVELOPMENT FUND
14 BOARD; CREATING A RURAL ELECTRONIC COMMERCE COMMUNICATIONS
15 SYSTEM FUND AND A RURAL ELECTRONIC COMMERCE COMMUNICATIONS
16 SYSTEM FUND BOARD; AND PROVIDING FUNDING SOURCES FOR THE
17 DEVELOPMENT AND COMMUNICATIONS FUNDS.
18 This act affects sections of Utah Code Annotated 1953 as follows:
19 ENACTS:
20 9-13-101, Utah Code Annotated 1953
21 9-13-102, Utah Code Annotated 1953
22 9-13-103, Utah Code Annotated 1953
23 9-13-104, Utah Code Annotated 1953
24 9-13-105, Utah Code Annotated 1953
25 9-13-106, Utah Code Annotated 1953
26 9-14-101, Utah Code Annotated 1953
27 9-14-102, Utah Code Annotated 1953

28 9-14-103, Utah Code Annotated 1953
29 9-14-104, Utah Code Annotated 1953
30 9-14-105, Utah Code Annotated 1953
31 9-14-106, Utah Code Annotated 1953
32 53C-3-201, Utah Code Annotated 1953
33 53C-3-202, Utah Code Annotated 1953
34 59-21-4, Utah Code Annotated 1953
35 Be it enacted by the Legislature of the state of Utah:
36 Section 1. Section 9-13-101 is enacted to read:
37 CHAPTER 13. RURAL DEVELOPMENT FUND AND BOARD
38 9-13-101. Definitions.
39 As used in this chapter:
40 (1) "Board" means the Rural Development Fund Board.
41 (2) "Development Fund" means the Rural Development Fund.
42 (3) "Division" means the Division of Community Development.
43 (4) "Eligible entity" means Garfield, Kane, Piute, or Wayne County and any incorporated
44 municipality or special service district within those counties.
45 Section 2. Section 9-13-102 is enacted to read:
46 9-13-102. Rural Development Fund -- Deposits and contents -- Interest --
47 Administration.
48 (1) In order to compensate for the effects of the federal-state land exchange identified in
49 Section 53C-3-201 that have a significant social or economic impact on rural areas of the state
50 located in close proximity to where the former state lands are now designated as federal lands,
51 there is created S [ an enterprise ] A s fund entitled the Rural Development Fund.
52 (2) The development fund sources of revenue are:
53 (a) monies deposited to the fund under this chapter; and
54 (b) monies deposited to the fund under Section 53C-3-202 .
55 (3) The development fund shall earn interest, which shall be deposited in the development
56 fund.
57 (4) The division may use development fund monies for administration of the fund, but not
58 to exceed 2% of the annual receipts to the fund.

59 (5) Any unallocated balance in the fund at the end of a fiscal year shall be nonlapsing.
60 Section 3. Section 9-13-103 is enacted to read:
61 9-13-103. Rural Development Fund Board -- Members -- Terms -- Chair -- Quorum
62 -- Expenses.
63 (1) There is created within the division the Rural Development Fund Board comprised of
64 five members as follows:
65 (a) the governor or the governor's designee;
66 (b) two mayors from eligible entities; and
67 (c) two county commissioners from eligible entities.
68 (2) The governor shall appoint the members, subject to confirmation by the Senate.
69 (3) The terms of members shall run concurrently with the terms of office for the governor,
70 the mayors, and the commissioners.
71 (4) The governor or the governor's designee shall serve as the chair of the board.
72 (5) Three board members constitute a quorum.
73 (6) (a) Members who do not receive salary, per diem, or expenses from the entity that they
74 represent for their service may receive per diem and expenses incurred in the performance of their
75 official duties at the rates established by the Division of Finance under Sections 63A-3-106 and
76 63A-3-107 .
77 (b) Members may decline to receive per diem and expenses for their service.
78 Section 4. Section 9-13-104 is enacted to read:
79 9-13-104. Board duties and powers.
80 (1) The board shall:
81 (a) establish procedures for the application for and awarding of grants to projects and
82 programs, including:
83 (i) eligibility criteria;
84 (ii) preference to projects and programs that are associated with the geographic areas
85 impacted by the Utah School and Lands Exchange Act of 1998, Pub.L. 105-335; and
86 (iii) coordination of projects and programs with other projects and programs funded by
87 federal, state, and local governmental entities;
88 (b) determine the order in which projects will be funded; and
89 (c) qualify for, accept, and administer grants, gifts, or other funds from the federal

90 government and from other sources, public or private.
91 (2) The board may make rules under Title 63, Chapter 46a, Utah Administrative
92 Rulemaking Act, if necessary to perform its responsibilities.
93 (3) The board is subject to the procedures and requirements under Title 52, Chapter 4,
94 Open and Public Meetings.
95 Section 5. Section 9-13-105 is enacted to read:
96 9-13-105. Eligibility for assistance -- Application -- Review by board.
97 (1) Eligible entities that wish to receive grants from the board for projects or programs that
98 lessen the impact of the federal-state land exchange identified in Section 53C-3-201 shall submit
99 formal applications containing the information required by the board.
100 (2) (a) The board shall review each grant application before approving it.
101 (b) The board may approve the application subject to the applicant's compliance with
102 certain conditions established by the board.
103 Section 6. Section 9-13-106 is enacted to read:
104 9-13-106. Division to distribute grant money -- Annual report.
105 (1) The division shall distribute grant monies if the grant is approved by the board.
106 (2) The division shall make an annual report to the governor and the Legislature's Natural
107 Resources, Agriculture, and Environment Interim Committee on the number and type of grants
108 made under this chapter.
109 Section 7. Section 9-14-101 is enacted to read:
110 CHAPTER 14. RURAL ELECTRONIC COMMERCE COMMUNICATIONS
111 SYSTEM FUND AND BOARD
112 9-14-101. Definitions.
113 As used in this chapter:
114 (1) "Board " means the Rural Electronic Commerce Communications System Fund Board
115 established within the division.
116 (2) "Division" means the Division of Community Development.
117 (3) "Fund" means the Rural Electronic Commerce Communications System Fund.
118 Section 8. Section 9-14-102 is enacted to read:
119 9-14-102. Rural Electronic Commerce Communications System Fund -- Deposits and
120 contents -- Interest -- Administration.

121 (1) In order to preserve and promote communications systems, such as broadcast
122 television, in the rural areas of the state, there is created S [ an enterprise ] A s fund entitled the Rural
123 Electronic Commerce Communications System Fund.
124 (2) The fund shall consist of:
125 (a) monies deposited to the fund under this chapter; and
126 (b) monies deposited to the fund under Subsection 59-21-4 (2).
127 (3) The fund shall earn interest, which shall be deposited in the fund
128 (4) Any unallocated balance in the fund at the end of a fiscal year shall be nonlapsing.
129 (5) The division may use fund monies for administration of the fund, but not to exceed 2%
130 of the annual receipts to the fund.
131 Section 9. Section 9-14-103 is enacted to read:
132 9-14-103. Rural Electronic Commerce Communications System Fund Board --
133 Members -- Terms -- Chair -- Quorum -- Expenses.
134 (1) There is created within the division the Rural Electronic Commerce Communications
135 System Fund Board comprised of nine members as follows:
136 (a) the governor or the governor's designee;
137 (b) four mayors from towns scattered throughout rural Utah; and
138 (c) four county commissioners from four different rural counties in the state.
139 (2) No more than two members under Subsections (1)(a) and (b) may be from the same
140 county.
141 (3) The governor shall appoint the members, subject to confirmation by the Senate.
142 (4) The terms of members shall run concurrently with their terms of office.
143 (5) The governor or the governor's designee shall serve as chair of the board.
144 (6) Five members constitute a quorum.
145 (7) (a) Members who do not receive salary, per diem, or expenses from the entity that they
146 represent for their service may receive per diem and expenses incurred in the performance of their
147 official duties at rates established by the Division of Finance under Sections 63A-3-106 and
148 63A-3-107 .
149 (b) Members may decline to receive per diem and expenses for their service.
150 Section 10. Section 9-14-104 is enacted to read:
151 9-14-104. Board duties and powers.

152 (1) The board shall:
153 (a) establish procedures for the awarding of grants under this chapter to programs and
154 projects that preserve and promote communications systems in the rural parts of the state for the
155 benefit of citizens who reside in rural Utah, including:
156 (i) eligibility criteria; and
157 (ii) coordination of projects and programs with other projects and programs funded by
158 federal, state, and local governmental entities;
159 (b) determine the order in which projects will be funded; and
160 (c) qualify for, accept, and administer grants, gifts, or other funds from the federal
161 government and from other sources, public or private.
162 (2) The board may make rules under Title 63, Chapter 46a, Utah Administrative
163 Rulemaking Act, if necessary to perform its responsibilities.
164 (3) The board is subject to the procedures and requirements under Title 52, Chapter 4,
165 Open and Public Meetings
166 Section 11. Section 9-14-105 is enacted to read:
167 9-14-105. Eligibility for assistance -- Application -- Review by board.
168 (1) Entities concerned with preserving or promoting communications systems within the
169 rural areas of the state that wish to receive grants from the board shall submit formal applications
170 containing the information required by the board.
171 (2) The board shall review each grant application before approving it.
172 (3) The board may approve the application subject to the applicant's compliance with
173 certain conditions established by the board.
174 Section 12. Section 9-14-106 is enacted to read:
175 9-14-106. Division to distribute grant money -- Annual report.
176 (1) The division shall distribute grant money if the grant is approved by the board.
177 (2) The division shall make an annual report to the governor and the Legislature's Natural
178 Resources, Agriculture, and Environment Interim Committee concerning the number and types of
179 grants awarded under this section.
180 Section 13. Section 53C-3-201 is enacted to read:
181 Part 2. Federal-State Land Exchange
182 53C-3-201. Definitions.

183 As used in this part:
184 (1) "Acquired lands" means those lands acquired by the administration under the
185 agreement.
186 (2) "Agreement" means the Agreement to Exchange Utah School Trust Lands Between
187 the State of Utah and the United States, signed May 8, 1998, as ratified by the Utah School and
188 Lands Exchange Act of 1998, Pub. L. 105-335.
189 (3) "Identified tracts" means the tracts identified in Section 3(F), (G), (J), (K), (L), and (M)
190 of the agreement, generally referred to as the Cottonwood Tract, Westridge Coal Tract, Ferron
191 Field, Mill Fork Tract, Dugout Canyon Tract, Muddy Tract, and North Horn Coal Tract.
192 (4) "Subject mineral" means any mineral that is covered by the Act of Congress of
193 February 25, 1920, known as the "Mineral Lands Leasing Act", 30 U.S.C. Sec. 181 as amended
194 through the date of enactment of this part.
195 Section 14. Section 53C-3-202 is enacted to read:
196 53C-3-202. Collection and distribution of revenues from federal land exchange
197 parcels.
198 (1) The director is responsible for the collection of all bonus bids, rentals, and royalties
199 on the acquired lands.
200 (2) The director shall distribute:
201 (a) all bonus bids received during each calendar quarter from the lease of coal, oil and gas,
202 and coalbed methane on the identified tracts not later than the end of the second month following
203 the quarter as follows:
204 (i) 50% to the United States of America;
205 (ii) 2.84% to the Rural Development Fund created under Section 9-13-102 ; and
206 (iii) the remaining 47.16% as provided in Section 59-21-4 ; and
207 (b) all rentals and royalties received during each calendar quarter from subject mineral
208 leases on the acquired lands not later than the end of the second month following the quarter as
209 follows:
210 (i) 50% to the Land Grant Management Fund created under Section 53C-3-101 ;
211 (ii) 2.84% to the Rural Development Fund created under Section 9-13-102 ; and
212 (iii) the remaining 47.16% as provided in Section 59-21-4 .
213 (3) (a) The director may retain up to 8% of the monies collected under Subsection (1) to

214 pay for administrative costs incurred under Subsection (1).
215 (b) The administrative costs may be deducted prior to the distributions made under
216 Subsections (2)(a) and (b).
217 (c) The director shall keep the administrative cost deductions in separate accounts.
218 (d) (i) For purposes of this section, administrative costs include direct costs incurred by
219 the administration as well as out-of-pocket expenditures incurred that are directly attributable to
220 leasing and management of the acquired lands for subject minerals and shall be determined in a
221 manner similar to that used by the federal government pursuant to 30 U.S.C. Sec.191(b).
222 (ii) If the administration includes out-of-pocket expenditures under Subsection (3)(d)(i)
223 in determining its costs, those expenditures may not be included in its general calculation of direct
224 costs.
225 (e) (i) At the end of each fiscal year, the director shall reconcile the amount actually spent
226 under Subsection (3)(d) with the amount retained under Subsection (3)(a).
227 (ii) The director shall distribute any excess from the reconciliation pursuant to Subsection
228 (2).
229 (iii) The director may retain an amount sufficient to cover the expected administrative
230 costs allowed under Subsection (3)(d) for the subsequent fiscal year, less the expected deduction
231 for the subsequent fiscal year under Subsection (3)(a).
232 Section 15. Section 59-21-4 is enacted to read:
233 59-21-4. Revenues from land exchange parcels -- Distribution.
234 The percentage of revenues from the land exchange parcels identified in Subsections
235 53C-3-202 (2)(a)(iii) and (b)(iii) shall be distributed as follows:
236 (1) The director of the School and Institutional Trust Lands Administration shall distribute
237 the monies to the Mineral Lease Account, the Mineral Bonus Account, and the Permanent
238 Community Impact Fund as directed in Sections 59-21-1 and 59-21-2 , except as provided in
239 Subsection (2).
240 (2) The director shall distribute the 2.25% allocation that would have gone to the State
241 Board of Education under Subsection 59-21-2 (2)(c) and the 2.25% of the allocation that would
242 have gone to the Utah Geological Survey under Subsection 59-21-2 (2)(d) to the Rural Electronic
243 Commerce Communications System Fund to be used for the grant program established in Title 9,
244 Chapter 14, Rural Electronic Commerce Communications System Fund and Board.

Legislative Review Note
as of 2-10-99 9:19 AM

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

Office of Legislative Research and General Counsel