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H.B. 27

             1     

BUDGET RESERVE ACCOUNT AMENDMENTS

             2     
2003 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Craig W. Buttars

             5      This act modifies the State Affairs in General title by changing the structure and
             6      statutory cap of the Budget Reserve Account. The act provides for an Education Budget
             7      Reserve Account. The act makes technical corrections.
             8      This act affects sections of Utah Code Annotated 1953 as follows:
             9      AMENDS:
             10          9-2-1204, as last amended by Chapter 242, Laws of Utah 2000
             11          40-6-14.5, as last amended by Chapter 8, Laws of Utah 2000
             12          53A-17a-144, as last amended by Chapter 6, Laws of Utah 1996, Second Special
             13      Session
             14          63-38-2.5, as last amended by Chapter 321, Laws of Utah 2002
             15          63-38c-103, as last amended by Chapter 332, Laws of Utah 2000
             16      ENACTS:
             17          63-38-2.6, Utah Code Annotated 1953
             18      Be it enacted by the Legislature of the state of Utah:
             19          Section 1. Section 9-2-1204 is amended to read:
             20           9-2-1204. Loans and assistance -- Repayment -- Credits.
             21          (1) (a) A company that qualifies under Section 9-2-1205 may receive loans or other
             22      financial assistance from the fund for expenses related to establishment, relocation, or
             23      development of industry in Utah.
             24          (b) A company creating an economic impediment that qualifies under Section
             25      9-2-1205.5 may in accordance with this part receive loans or other financial assistance from the
             26      fund for the expenses of the company creating an economic impediment related to:
             27          (i) relocation to a rural area in Utah of the company creating an economic impediment;



             28      and
             29          (ii) the siting of a replacement company.
             30          (2) (a) Subject to Subsection (2)(b), the administrator shall have the authority to
             31      determine the structure, amount, and nature of any loan or other financial assistance from the
             32      fund.
             33          (b) The form of financial assistance determined under Subsection (2)(a) shall be
             34      structured so the intended repayment or return to the state, including cash or credit, equals at
             35      least the amount of the assistance together with an annual interest rate of 10%.
             36          (3) (a) (i) Except as provided in Subsection (3)(b), the administrator may provide for a
             37      system of credits that may be used in lieu of cash repayment of a fund loan.
             38          (ii) The value of the credits described in Subsection (3)(a)(i) shall be based on factors
             39      determined by the administrator, including:
             40          (A) the number of Utah jobs created;
             41          (B) the increased economic activity in Utah; and
             42          (C) other events and activities that occur as a result of the fund loan.
             43          (b) (i) The administrator shall provide for a system of credits to be used in lieu of cash
             44      repayment of a fund loan that is issued to a company creating an economic impediment.
             45          (ii) The value of the credits described in Subsection (3)(b)(i) shall be based on factors
             46      determined by the administrator, including:
             47          (A) the number of Utah jobs created;
             48          (B) the increased economic activity in Utah; and
             49          (C) other events and activities that occur as a result of the fund loan.
             50          (4) (a) If loan repayments are in cash, the repayments shall be deposited, including any
             51      interest, into the fund.
             52          (b) If the repayments are in the form of credits as provided in Subsection (3), the
             53      administrator and the Division of Finance shall determine the manner of recognizing and
             54      accounting for the credits.
             55          (5) At the end of each fiscal year, after the transfer of surplus General Fund revenues
             56      has been made to the General Fund Budget Reserve Account as provided in Section 63-38-2.5 ,
             57      any additional unrestricted, undesignated General Fund balance, except the first $10,000,000 of
             58      additional unrestricted, undesignated General Fund balance on June 30, 1992, shall be


             59      earmarked to the Industrial Assistance Fund in an amount equal to any credit that has accrued
             60      under this part. These credit amounts may not be used for purposes of the fund as provided in
             61      this part until appropriated by the Legislature.
             62          Section 2. Section 40-6-14.5 is amended to read:
             63           40-6-14.5. Oil and Gas Conservation Account created -- Contents -- Use of
             64      account monies.
             65          (1) There is created within the General Fund a restricted account known as the Oil and
             66      Gas Conservation Account.
             67          (2) The contents of the account shall consist of:
             68          (a) revenues from the fee levied under Section 40-6-14 , including any penalties or
             69      interest charged for delinquent payments; and
             70          (b) interest and earnings on account monies.
             71          (3) Account monies shall be used to pay for the:
             72          (a) administration of this chapter; and
             73          (b) plugging and reclamation of abandoned oil or gas wells or bore, core, or
             74      exploratory holes for which:
             75          (i) there is no reclamation surety; or
             76          (ii) the forfeited surety is insufficient for plugging and reclamation.
             77          (4) Priority in the use of the monies shall be given to paying for the administration of
             78      this chapter.
             79          (5) Appropriations for plugging and reclamation of abandoned oil or gas wells or bore,
             80      core, or exploratory holes shall be nonlapsing.
             81          (6) The balance of the Oil and Gas Conservation Account at the end of a fiscal year
             82      may not exceed $750,000. Any excess monies shall be transferred to the General Fund.
             83          (7) (a) As used in this Subsection (7), "excess fee revenue" means revenue collected in
             84      fiscal year 1999-2000 from the fee levied under Section 40-6-14 that exceeds the fee revenue
             85      appropriated to the Division of Oil, Gas, and Mining in fiscal year 1999-2000.
             86          (b) If there is a General Fund surplus for fiscal year 1999-2000, the Division of Finance
             87      shall transfer General Fund surplus monies to the Oil and Gas Conservation Account in an
             88      amount up to the excess fee revenue.
             89          (c) The transfer provided in Subsection (7)(b) shall be made after General Fund surplus


             90      monies are transferred to the General Fund Budget Reserve Account pursuant to Section
             91      63-38-2.5 .
             92          Section 3. Section 53A-17a-144 is amended to read:
             93           53A-17a-144. Contribution of state to cost of minimum school program --
             94      Determination of amounts -- Levy on taxable property -- Disbursal -- Deficiency.
             95          The state's contribution to the total cost of the minimum school program is determined
             96      and distributed as follows:
             97          (1) Prior to June 16 of each year, the State Board of Education shall determine the
             98      estimated total cost of the minimum school program for each school district for the next school
             99      year.
             100          (a) The board shall certify this cost to the State Tax Commission, the Division of
             101      Finance, and the state auditor.
             102          (b) The certified report shall include the estimated number of units, the cost of the
             103      minimum program for each district as determined with the district, and the amount of any
             104      deficiency in the state's contribution to the minimum school program for the current and the
             105      preceding years.
             106          (2) The State Tax Commission shall levy an amount determined by the Legislature on
             107      all taxable property of the state.
             108          (a) This amount, together with other funds provided by law, is the state's contribution
             109      to the minimum school program.
             110          (b) The statewide levy is set at zero until changed by the Legislature.
             111          (3) During the first week in November, the State Tax Commission shall certify to the
             112      State Board of Education the amounts designated as state aid for each district under Section
             113      59-2-902 .
             114          (4) (a) The actual amounts computed under Section 59-2-902 are the state's
             115      contribution to the minimum school program of each district.
             116          (b) The state board shall provide each district with a statement of the amount of state
             117      aid.
             118          (5) Prior to the first day of each month, the state treasurer and the Division of Finance,
             119      with the approval of the State Board of Education, shall disburse 1/12 of the state's contribution
             120      to the cost of the minimum school program to each school district.


             121          (a) A disbursement may not be made to a district whose payments have been
             122      interrupted under Subsection (5)(d).
             123          (b) Discrepancies between the monthly disbursements and the actual cost of the
             124      program shall be adjusted in the final settlement under Subsection (6).
             125          (c) If the monthly distributions overdraw the money in the Uniform School Fund, the
             126      Division of Finance is authorized to run this fund in a deficit position.
             127          (d) The state board may interrupt disbursements to a district if, in the judgment of the
             128      board, the district is failing to comply with the minimum school program, is operating
             129      programs that are not approved by the state board, or has not submitted reports required by law
             130      or the state board.
             131          (i) Disbursements shall be resumed upon request of the state board.
             132          (ii) Back disbursements shall be included in the next regular disbursement, and the
             133      amount disbursed certified to the State Division of Finance and state treasurer by the state
             134      board.
             135          (e) The State Board of Education may authorize exceptions to the 1/12 per month
             136      disbursement formula for grant funds if the board determines that a different disbursement
             137      formula would better serve the purposes of the grant.
             138          (6) (a) If monies in the Uniform School Fund are insufficient to meet the state's
             139      contribution to the minimum school program as appropriated, the amount of the deficiency thus
             140      created shall be carried as a deficiency in the Uniform School Fund until the next session of the
             141      Legislature, at which time the Legislature shall appropriate funds to cover the deficiency.
             142          (b) If there is an operating deficit in public education Uniform School Fund
             143      appropriations, the Legislature shall eliminate the deficit by:
             144          (i) budget transfers or other legal means;
             145          (ii) appropriating money from the Education Budget Reserve Account;
             146          [(ii)] (iii) appropriating up to 25% of the balance in the [Budgetary] General Fund
             147      Budget Reserve Account; or
             148          [(iii)] (iv) some combination of Subsections (6)(b)(i) [and], (ii), and (iii).
             149          (c) Nothing in Subsection (6)(b) precludes the Legislature from appropriating more
             150      than 25% of the balance in the [Budgetary] General Fund Budget Reserve Account to fund
             151      operating deficits in public education appropriations.


             152          Section 4. Section 63-38-2.5 is amended to read:
             153           63-38-2.5. Establishing a General Fund Budget Reserve Account -- Providing for
             154      deposits and expenditures from the account.
             155          (1) There is created within the General Fund a restricted account to be known as the
             156      General Fund Budget Reserve Account, which is designated to receive the surplus revenue
             157      required by this section.
             158          (2) (a) (i) At the end of any fiscal year in which the Division of Finance, in conjunction
             159      with the completion of the annual audit by the state auditor, determines that there is a General
             160      Fund surplus, 25% of the surplus shall be transferred to the General Fund Budget Reserve
             161      Account, except that the amount in the combined totals of the General Fund Budget Reserve
             162      Account and the Education Budget Reserve Account created in Section 63-38-2.6 may not
             163      exceed [8%] 6% of the total of the General Fund appropriation amount and the Uniform School
             164      Fund appropriation amount for the fiscal year in which the surplus occurred.
             165          (ii) In addition to Subsection (2)(a)(i), if a surplus exists and if, within the last ten
             166      years, the Legislature has appropriated any money from the General Fund Budget Reserve
             167      Account that has not been replaced by appropriation or as provided in this Subsection (2)(a)(ii),
             168      the Division of Finance shall, before any contingent appropriations or other transfers required
             169      by law are made, transfer up to 25% more of the surplus to the General Fund Budget Reserve
             170      Account to replace the amounts appropriated until transfers of the surplus under this
             171      Subsection (2)(a)(ii) have replaced the appropriations from the fund.
             172          (b) The amount to be transferred to the General Fund Budget Reserve Account shall be
             173      determined before any other contingency appropriation using surplus funds.
             174          (3) (a) If, at the close of any fiscal year, there appear to be insufficient monies to pay
             175      additional debt service for any bonded debt authorized [during the last annual general session
             176      and any special session] by the Legislature, the Division of Finance may hold back monies
             177      from any General Fund surplus sufficient to pay the additional debt service requirements
             178      resulting from issuance of bonded debt that was authorized by the Legislature h [ in the last annual
             179      general session and any special session
] h
.
             180          (b) The Division of Finance may not spend the hold back amount for debt service
             181      under Subsection (3)(a) unless and until it is appropriated by the Legislature.
             182          (c) If, after calculating the amount for transfers to the General Fund Budget Reserve


             183      Account, the remaining surplus is insufficient to cover the hold back for debt service required
             184      by Subsection (3)(a), the Division of Finance shall reduce the transfer to the General Fund
             185      Budget Reserve Account by the amount necessary to cover the debt service hold back.
             186          (d) Notwithstanding Subsection (2), the Division of Finance shall hold back the
             187      General Fund balance for debt service authorized by this Subsection (3) before making any
             188      transfers to the General Fund Budget Reserve Account or any other designation or allocation of
             189      surplus.
             190          (4) (a) Any appropriation made by the Legislature from the General Fund Budget
             191      Reserve Account may only be used to cover operating deficits or retroactive tax refunds.
             192          (b) The [Budgetary] General Fund Budget Reserve Account is available for
             193      appropriation to fund operating deficits in public education appropriations.
             194          (5) All interest generated from investments of money in the General Fund Budget
             195      Reserve Account shall be deposited into the account.
             196          Section 5. Section 63-38-2.6 is enacted to read:
             197          63-38-2.6. Establishing an Education Budget Reserve Account -- Providing for
             198      deposits and expenditures from the account.
             199          (1) There is created within the Uniform School Fund a restricted account to be known
             200      as the Education Budget Reserve Account, which is designated to receive the surplus revenue
             201      required by this section.
             202          (2) (a) (i) At the end of any fiscal year in which the Division of Finance, in conjunction
             203      with the completion of the annual audit by the state auditor, determines that there is a Uniform
             204      School Fund surplus, 25% of the surplus shall be transferred to the Education Budget Reserve
             205      Account, except that the amount in the combined totals of the Education Budget Reserve
             206      Account and the General Fund Budget Reserve Account created in Section 63-38-2.5 may not
             207      exceed 6% of the total of the Uniform School Fund appropriation amount and the General
             208      Fund appropriation amount for the fiscal year in which the surplus occurred.
             209          (ii) In addition to Subsection (2)(a)(i), if a surplus exists and if, within the last ten
             210      years, the Legislature has appropriated any money from the Education Budget Reserve Account
             211      that has not been replaced by appropriation or as provided in this Subsection (2)(a)(ii), the
             212      Division of Finance shall, before any contingent appropriations or other transfers required by
             213      law are made, transfer up to 25% more of the surplus to the Education Budget Reserve Account


             214      to replace the amounts appropriated until transfers of the surplus under this Subsection
             215      (2)(a)(ii) have replaced the appropriations from the fund.
             216          (b) The amount to be transferred to the Education Budget Reserve Account shall be
             217      determined before any other contingency appropriation using surplus funds.
             218          (3) Any appropriation made by the Legislature from the Education Budget Reserve
             219      Account may only be used to cover operating deficits in the state's public and higher education
             220      system.
             221          (4) All interest generated from investments of money in the Education Budget Reserve
             222      Account shall be deposited into the account.
             223          Section 6. Section 63-38c-103 is amended to read:
             224           63-38c-103. Definitions.
             225          As used in this chapter:
             226          (1) (a) "Appropriations" means actual unrestricted capital and operating appropriations
             227      from unrestricted General Fund, Uniform School Fund, and Transportation Fund sources as
             228      presented in the governor's executive budgets.
             229          (b) "Appropriation" includes appropriations that are contingent upon available
             230      surpluses in the General Fund, Uniform School Fund, or Transportation Fund.
             231          (c) "Appropriation" includes appropriations made to the Centennial Highway Fund
             232      from unrestricted General Fund and Transportation Fund revenues.
             233          (d) "Appropriations" does not mean:
             234          (i) debt service expenditures;
             235          (ii) emergency expenditures;
             236          (iii) expenditures from all other fund or subfund sources presented in the executive
             237      budgets;
             238          (iv) transfers into, or appropriations made to, the [Budgetary] General Fund Budget
             239      Reserve Account established in Section 63-38-2.5 ;
             240          (v) transfers into, or appropriations made to, the Education Budget Reserve Account
             241      established in Section 63-38-2.6;
             242          [(v)] (vi) monies appropriated to fund the total one-time project costs for the
             243      construction of capital developments as defined in Section 63A-5-104 ; or
             244          [(vi)] (vii) appropriations made to the Centennial Highway Fund from sources other


             245      than the unrestricted General Fund and Transportation Fund revenues created by Section
             246      72-2-118 .
             247          (2) "Base year real per capita appropriations" means the result obtained for the state by
             248      dividing the fiscal year 1985 actual appropriations of the state less debt monies, less $55
             249      million appropriated for flooding and less $14.2 million appropriated for capital projects in
             250      Section 3 of Chapter 265, Laws of Utah 1985 General Session, by:
             251          (a) the state's July 1, 1983 population; and
             252          (b) the fiscal year 1983 inflation index divided by 100.
             253          (3) "Calendar year" means the time period beginning on January 1 of any given year
             254      and ending on December 31 of the same year.
             255          (4) "Fiscal emergency" means an extraordinary occurrence requiring immediate
             256      expenditures and includes the settlement under Chapter 4, Laws of Utah 1988, Fourth Special
             257      Session.
             258          (5) "Fiscal year" means the time period beginning on July 1 of any given year and
             259      ending on June 30 of the subsequent year.
             260          (6) "Fiscal year 1985 actual base year appropriations" means fiscal year 1985 actual
             261      capital and operations appropriations from general, uniform school, and transportation fund
             262      sources, less debt monies, less $55 million appropriated for flooding, and less $14.2 million
             263      appropriated for capital projects in Section 3, Chapter 265, Laws of Utah 1985.
             264          (7) "Inflation index" means the change in the general price level of goods and services
             265      as measured by the Gross National Product Implicit Price Deflator of the Bureau of Economic
             266      Analysis, U.S. Department of Commerce calculated as provided in Section 63-38c-202 .
             267          (8) (a) "Maximum allowable appropriations limit" means the appropriations that could
             268      be, or could have been, spent in any given year under the limitations of this chapter.
             269          (b) "Maximum allowable appropriations limit" does not mean actual appropriations
             270      spent or actual expenditures.
             271          (9) "Most recent fiscal year's inflation index" means the fiscal year inflation index two
             272      fiscal years previous to the fiscal year for which the maximum allowable inflation and
             273      population appropriations limit is being computed under this chapter.
             274          (10) "Most recent fiscal year's personal income" means the fiscal year personal income
             275      two fiscal years previous to the fiscal year for which the maximum allowable personal income


             276      appropriations limit is being computed under this chapter.
             277          (11) "Most recent fiscal year's population" means the fiscal year population two fiscal
             278      years previous to the fiscal year for which the maximum allowable inflation and population
             279      appropriations limit is being computed under this chapter.
             280          (12) "Personal income" means the total personal income of the state as calculated by
             281      the Office of Planning and Budget according to the procedures and requirements of Section
             282      63-38c-202 .
             283          (13) "Population" means the number of residents of the state as of July 1 of each year
             284      as calculated by the Office of Planning and Budget according to the procedures and
             285      requirements of Section 63-38c-202 .
             286          (14) "Revenues" means the revenues of the state from every tax, penalty, receipt, and
             287      other monetary exaction and interest connected with it that are recorded as unrestricted revenue
             288      of the General Fund, Uniform School Fund, and Transportation Fund, except as specifically
             289      exempted by this chapter.
             290          (15) "Security" means any bond, note, warrant, or other evidence of indebtedness,
             291      whether or not the bond, note, warrant, or other evidence of indebtedness is or constitutes an
             292      "indebtedness" within the meaning of any provision of the constitution or laws of this state.




Legislative Review Note
    as of 11-21-02 2:39 PM


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

Office of Legislative Research and General Counsel


Interim Committee Note
    as of 12-12-02 4:02 PM


The Government Operations Interim Committee recommended this bill.


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