H.B. 66 Enrolled

STATE SPENDING AND DEBT
LIMITATIONS AMENDMENTS
2004 GENERAL SESSION
STATE OF UTAH
Sponsor: Gregory H. Hughes
Douglas C. Aagard
J. Stuart Adams
Jeff Alexander
Chad E. Bennion
Ron Bigelow
DeMar Bud Bowman
Katherine M. Bryson
Don E. Bush
Craig W. Buttars
LaVar ChristensenDavid Clark
Greg J. Curtis
Margaret Dayton
Glenn A. Donnelson
James A. Ferrin
Wayne A. Harper
Eric K. Hutchings
Todd E. Kiser
Bradley G. Last
Rebecca D. LockhartDana C. Love
Michael T. Morley
Merlynn T. Newbold
Michael E. Noel
Darin G. Peterson
J. Morgan Philpot
Martin R. Stephens
Mike Thompson
David Ure
Stephen H. Urquhart
LONG TITLE
General Description:
This bill modifies statutory appropriation limits and statutory debt limits.
Highlighted Provisions:
This bill:
. modifies the formula for calculating the state appropriation limit and the state debt
limit;
. eliminates a portion of the existing formula; and
. makes technical corrections.
Monies Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
63-38c-102, as last amended by Chapter 16, Laws of Utah 2003

63-38c-103, as last amended by Chapters 16 and 88, Laws of Utah 2003
63-38c-201, as renumbered and amended by Chapter 275, Laws of Utah 1996
63-38c-202, as last amended by Chapter 16, Laws of Utah 2003
63-38c-402, as last amended by Chapter 266, Laws of Utah 2002

Be it enacted by the Legislature of the state of Utah:
Section 1. Section 63-38c-102 is amended to read:
63-38c-102. Purpose of chapter -- Limitations on state mandated property tax,
state appropriations, and state debt.
(1) (a) It is the purpose of this chapter to:
(i) place a limitation on the state mandated property tax rate under Title 53A, Chapter
17a, Minimum School Program Act;
(ii) place limitations on state government appropriations based upon [the average of
changes in personal income and] the combined changes in population and inflation; and
(iii) place a limitation on the state's outstanding general obligation debt.
(b) The limitations imposed by this chapter are in addition to limitations on tax levies,
rates, and revenues otherwise provided for by law.
(2) (a) This chapter may not be construed as requiring the state to collect the full amount
of tax revenues permitted to be appropriated by this chapter.
(b) This chapter's purpose is to provide a ceiling, not a floor, limitation on the
appropriations of state government.
(3) The recommendations and budget analysis prepared by the Governor's Office of
Planning and Budget and the Office of the Legislative Fiscal Analyst, as required by Title 36,
Chapter 12, Legislative Organization, shall be in strict compliance with the limitations imposed
under this chapter.
Section 2. Section 63-38c-103 is amended to read:
63-38c-103. Definitions.
As used in this chapter:

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(1) (a) "Appropriations" means actual unrestricted capital and operating appropriations
from unrestricted General Fund[, Uniform School Fund, and Transportation Fund] sources and
from non-Uniform School Fund income tax revenues as presented in the governor's executive
budgets.
(b) "Appropriation" includes appropriations that are contingent upon available surpluses
in the General Fund[, Uniform School Fund, or Transportation Fund].
[(c) "Appropriation" includes appropriations made to the Centennial Highway Fund from
unrestricted General Fund and Transportation Fund revenues.]
[(d)] (c) "Appropriations" does not mean:
(i) debt service expenditures;
(ii) emergency expenditures;
(iii) expenditures from all other fund or subfund sources presented in the executive
budgets;
(iv) transfers into, or appropriations made to, the General Fund Budget Reserve Account
established in Section 63-38-2.5 ;
(v) transfers into, or appropriations made to, the Education Budget Reserve Account
established in Section 63-38-2.6;
(vi) monies appropriated to fund the total one-time project costs for the construction of
capital developments as defined in Section 63A-5-104 ; or
(vii) appropriations made to the Centennial Highway Fund [from sources other than the
unrestricted General Fund and Transportation Fund revenues] created by Section 72-2-118 .
(2) "Base year real per capita appropriations" means the result obtained for the state by
dividing the fiscal year 1985 actual appropriations of the state less debt monies[, less $55 million
appropriated for flooding and less $14.2 million appropriated for capital projects in Section 3 of
Chapter 265, Laws of Utah 1985 General Session,] by:
(a) the state's July 1, 1983 population; and
(b) the fiscal year 1983 inflation index divided by 100.
(3) "Calendar year" means the time period beginning on January 1 of any given year and

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ending on December 31 of the same year.
(4) "Fiscal emergency" means an extraordinary occurrence requiring immediate
expenditures and includes the settlement under Chapter 4, Laws of Utah 1988, Fourth Special
Session.
(5) "Fiscal year" means the time period beginning on July 1 of any given year and ending
on June 30 of the subsequent year.
(6) "Fiscal year 1985 actual base year appropriations" means fiscal year 1985 actual
capital and operations appropriations from General[, uniform school, and transportation] Fund
and non-Uniform School Fund income tax revenue sources, less debt monies[, less $55 million
appropriated for flooding, and less $14.2 million appropriated for capital projects in Section 3,
Chapter 265, Laws of Utah 1985].
(7) "Inflation index" means the change in the general price level of goods and services as
measured by the Gross National Product Implicit Price Deflator of the Bureau of Economic
Analysis, U.S. Department of Commerce calculated as provided in Section 63-38c-202 .
(8) (a) "Maximum allowable appropriations limit" means the appropriations that could be,
or could have been, spent in any given year under the limitations of this chapter.
(b) "Maximum allowable appropriations limit" does not mean actual appropriations spent
or actual expenditures.
(9) "Most recent fiscal year's inflation index" means the fiscal year inflation index two
fiscal years previous to the fiscal year for which the maximum allowable inflation and population
appropriations limit is being computed under this chapter.
[(10) "Most recent fiscal year's personal income" means the fiscal year personal income
two fiscal years previous to the fiscal year for which the maximum allowable personal income
appropriations limit is being computed under this chapter.]
[(11)] (10) "Most recent fiscal year's population" means the fiscal year population two
fiscal years previous to the fiscal year for which the maximum allowable inflation and population
appropriations limit is being computed under this chapter.
[(12) "Personal income" means the total personal income of the state as calculated by the

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Governor's Office of Planning and Budget according to the procedures and requirements of
Section 63-38c-202 .]
[(13)] (11) "Population" means the number of residents of the state as of July 1 of each
year as calculated by the Governor's Office of Planning and Budget according to the procedures
and requirements of Section 63-38c-202 .
[(14)] (12) "Revenues" means the revenues of the state from every tax, penalty, receipt,
and other monetary exaction and interest connected with it that are recorded as unrestricted
revenue of the General Fund[, Uniform School Fund, and Transportation Fund,] and from
non-Uniform School Fund income tax revenues, except as specifically exempted by this chapter.
[(15)] (13) "Security" means any bond, note, warrant, or other evidence of indebtedness,
whether or not the bond, note, warrant, or other evidence of indebtedness is or constitutes an
"indebtedness" within the meaning of any provision of the constitution or laws of this state.
Section 3. Section 63-38c-201 is amended to read:
63-38c-201. Appropriations limit -- Formula.
(1) There is established a state appropriations limit for each fiscal year beginning after
June 30, 1988.
(2) For each of these fiscal years, the annual legislative appropriations for this state, its
agencies, departments, and institutions may not exceed that sum determined by [the average of
the two formulas specified in Subsections (2)(h) and (i)] applying the formula B* P* (I/100) in
which:
[(a) "Z" equals the most recent fiscal year's personal income;]
[(b) "Y" equals personal income for the fiscal year just previous to "Z";]
[(c) "A" equals the prior fiscal year's maximum allowable personal income appropriations
limit beginning with fiscal year 1985 actual base year appropriations;]
[(d)] (a) "B" equals the base year real per capita appropriations for the state, its agencies,
departments, and institutions;
[(e)] (b) "P" equals the most recent fiscal year's population; and
[(f)] (c) "I" equals the most recent fiscal year's inflation index adjusted to reflect fiscal

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year 1989 as having an index value of 100.
[(g)] (3) The revenues specified in Section 63-38c-205 are not subject to the limitation in
this section.
[(h) Formula 1: B* P* (I/100) = Maximum Allowable Inflation and Population
Appropriations Limit.]
[(i) Formula 2: A* (Z/Y) = Maximum Allowable Personal Income Appropriations Limit.]
Section 4. Section 63-38c-202 is amended to read:
63-38c-202. Computing formula elements.
[(1) For purposes of computing the most recent fiscal year's personal income, the
Governor's Office of Planning and Budget shall use the quarterly data produced by the Bureau of
Economic Analysis, U.S. Department of Commerce.]
[(2)] (1) For purposes of calculating fiscal year inflation indexes [and fiscal year personal
income] for the previous fiscal year, the Governor's Office of Planning and Budget shall use:
(a) the actual quarterly data released by the U.S. Department of Commerce as of January
31 of each year; and
(b) the most recent U.S. Bureau of Census population estimates as of January 31 of each
year.
[(3)] (2) (a) For purposes of computing the inflation index, the Governor's Office of
Planning and Budget shall:
(i) assign the bureau's 1982 calendar year inflation index value of 100 to fiscal year 1989
for purposes of computing fiscal year index values;
(ii) compute all subsequent fiscal year inflation indexes after having assigned the fiscal
year 1989 inflation index a value of 100; and
(iii) use the quarterly index values published by the Bureau of Economic Analysis, U.S.
Department of Commerce, to compute fiscal year index values.
(b) If the bureau changes its calendar base year, appropriate adjustments are to be made
in this chapter to accommodate those changes.
[(4)] (3) (a) For purposes of computing the most recent fiscal year's population, the

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Governor's Office of Planning and Budget shall convert the April 1 decennial census estimate to a
July 1 estimate, unless otherwise estimated by the Bureau of Census.
(b) If the bureau changes the state's July 1, 1983 base year population after it conducts
the 1990 Census, appropriate adjustments shall be made in this chapter to accommodate those
changes.
Section 5. Section 63-38c-402 is amended to read:
63-38c-402. Debt limitation -- Vote requirement needed to exceed limitation --
Exceptions.
(1) (a) Except as provided in Subsection (1)(b), the outstanding general obligation debt of
the state may not exceed [20%] 45% of the maximum allowable appropriations limit unless
approved by more than a two-thirds vote of both houses of the Legislature.
(b) Notwithstanding the limitation contained in Subsection (1)(a), debt issued under the
authority of the following parts is not subject to the debt limitation established by this section:
(i) Title 63B, Chapter 6, Part 2, 1997 Highway General Obligation Bond Authorization;
(ii) Title 63B, Chapter 6, Part 3, 1997 Highway Bond Anticipation Note Authorization;
(iii) Title 63B, Chapter 7, Part 2, 1998 Highway General Obligation Bond Authorization;
(iv) Title 63B, Chapter 7, Part 3, 1998 Highway Bond Anticipation Note Authorization;
(v) Title 63B, Chapter 8, Part 2, 1999 Highway General Obligation Bond Authorization;
(vi) Title 63B, Chapter 8, Part 3, 1999 Highway Bond Anticipation Note Authorization;
(vii) Title 63B, Chapter 9, Part 2, 2000 Highway General Obligation Bond;
(viii) Title 63B, Chapter 10, Part 1, 2001 Highway General Obligation Bond;
(ix) Title 63B, Chapter 10, Part 2, 2001 Highway General Obligation Bond Anticipation
Notes;
(x) Title 63B, Chapter 11, Part 5, 2002 Highway General Obligation Bond for Salt Lake
County; and
(xi) Title 63B, Chapter 11, Part 6, 2002 Highway General Obligation Bond Anticipation
Notes for Salt Lake County Authorization.
(2) This section does not apply if contractual rights will be impaired.

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