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H.B. 42

             1     

PERMANENT COMMUNITY IMPACT FUND BOARD GRANTS

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Patrick Painter

             5     
Senate Sponsor: Curtis S. Bramble

             6     
             7      LONG TITLE
             8      Committee Note:
             9          The Revenue and Taxation Interim Committee recommended this bill.
             10      General Description:
             11          This bill authorizes the Permanent Community Impact Fund Board to make a grant to
             12      certain cities and provides that certain sales and use tax distributions shall be reduced
             13      by the amount of a grant a city receives.
             14      Highlighted Provisions:
             15          This bill:
             16          .    defines terms;
             17          .    for fiscal year 2011-12 only, authorizes the Permanent Community Impact Fund
             18      Board to make a grant to certain cities, including:
             19              .    providing the maximum amount of the grant;
             20              .    providing the purposes for which a city may expend the grant; and
             21              .    providing that before the Permanent Community Impact Fund Board may make
             22      the grant, the Permanent Community Impact Fund Board shall find that the city
             23      is experiencing substantial hardship in the repayment of bonded indebtedness as
             24      a result of certain sales and use tax distribution reductions;
             25          .    provides that the amount of certain sales and use tax distributions shall be reduced
             26      by the amount of a grant;
             27          .    provides repeal dates for certain provisions related to the grant and sales and use tax


             28      distributions; and
             29          .    makes technical and conforming changes.
             30      Money Appropriated in this Bill:
             31          None
             32      Other Special Clauses:
             33          This bill provides an immediate effective date.
             34      Utah Code Sections Affected:
             35      AMENDS:
             36          9-4-302, as last amended by Laws of Utah 2007, Chapter 303
             37          9-4-305, as last amended by Laws of Utah 2002, Chapter 286
             38          9-4-307, as last amended by Laws of Utah 2011, Chapter 247
             39          59-12-205, as last amended by Laws of Utah 2011, Chapter 198
             40          63I-1-209, as last amended by Laws of Utah 2011, Chapter 370
             41          63I-1-259, as last amended by Laws of Utah 2011, Chapter 369
             42     
             43      Be it enacted by the Legislature of the state of Utah:
             44          Section 1. Section 9-4-302 is amended to read:
             45           9-4-302. Definitions.
             46          As used in this part:
             47          (1) "Bonus payments" means that portion of the bonus payments received by the
             48      United States government under the Leasing Act paid to the state under Section 35 of the
             49      Leasing Act, 30 U.S.C. Sec. 191, together with any interest that had accrued on those
             50      payments.
             51          (2) "Impact board" means the Permanent Community Impact Fund Board created under
             52      Section 9-4-304 .
             53          (3) "Impact fund" means the Permanent Community Impact Fund established by this
             54      chapter.
             55          (4) "Interlocal Agency" means a legal or administrative entity created by a subdivision
             56      or combination of subdivisions under the authority of Title 11, Chapter 13, Interlocal
             57      Cooperation Act.
             58          (5) "Leasing Act" means the Mineral Lands Leasing Act of 1920, 30 U.S.C. Sec. 181 et


             59      seq.
             60          (6) "Qualifying city" means a city:
             61          (a) of the fifth class;
             62          (b) that received a qualifying sales and use tax distribution reduction; and
             63          (c) that had located within the city for one or more days during the calendar year
             64      beginning on January 1, 2008:
             65          (i) an establishment described in NAICS Industry Group 2121, Coal Mining, or NAICS
             66      Code 213113, Support Activities for Coal Mining, of the 2002 North American Industry
             67      Classification System of the federal Executive Office of the President, Office of Management
             68      and Budget; and
             69          (ii) at least one establishment described in Subsection (6)(c)(i) that was not the holder
             70      of a direct payment permit under Section 59-12-107.1 .
             71          (7) "Qualifying sales and use tax distribution reduction" means that, for the calendar
             72      year beginning on January 1, 2008, the total sales and use tax distributions a city received
             73      under Section 59-12-205 were reduced by at least 15% from the total sales and use tax
             74      distributions the city received under Section 59-12-205 for the calendar year beginning on
             75      January 1, 2007.
             76          [(6)] (8) "Subdivision" means a county, city, town, county service area, special service
             77      district, special improvement district, water conservancy district, water improvement district,
             78      sewer improvement district, housing authority, building authority, school district, or public
             79      postsecondary institution organized under the laws of this state.
             80          Section 2. Section 9-4-305 is amended to read:
             81           9-4-305. Duties -- Loans -- Interest.
             82          (1) The impact board shall:
             83          (a) make grants and loans from the amounts appropriated by the Legislature out of the
             84      impact fund to state agencies, subdivisions, and interlocal agencies that are or may be socially
             85      or economically impacted, directly or indirectly, by mineral resource development for:
             86          (i) planning;
             87          (ii) construction and maintenance of public facilities; and
             88          (iii) provision of public services;
             89          (b) establish the criteria by which the loans and grants will be made;


             90          (c) determine the order in which projects will be funded;
             91          (d) in conjunction with other agencies of the state or of subdivisions or of interlocal
             92      agencies, conduct studies, investigations, and research into the effects of proposed mineral
             93      resource development projects upon local communities;
             94          (e) sue and be sued in accordance with applicable law;
             95          (f) qualify for, accept, and administer grants, gifts, loans, or other funds from the
             96      federal government and from other sources, public or private; and
             97          (g) perform other duties assigned to it under Sections 11-13-306 and 11-13-307 .
             98          (2) (a) The impact board may, for fiscal year 2011-12 only, make a grant to a
             99      qualifying city if the impact board makes the finding required by Subsection 9-4-307 (3).
             100          (b) A grant under this Subsection (2):
             101          (i) may not exceed $1,100,000 for each qualifying city; and
             102          (ii) shall be made from the amounts appropriated by the Legislature out of the impact
             103      fund.
             104          (c) A qualifying city may expend a grant under this Subsection (2) only to make one or
             105      more payments on bonded indebtedness.
             106          [(2)] (3) Money, including all loan repayments and interest, in the impact fund derived
             107      from bonus payments may be used for any of the purposes set forth in Subsection (1)(a) but
             108      may only be given in the form of loans to be paid back into the impact fund by the agency,
             109      subdivision, or interlocal agency.
             110          [(3)] (4) The average annual return to the impact fund on all bonus money may not be
             111      less than 1/2 of the average interest rate paid by the state on general obligation bonds issued
             112      during the most recent fiscal year in which bonds were sold.
             113          [(4)] (5) (a) "Provision of public services" under Subsection (1)(a) includes contracts
             114      with public postsecondary institutions to fund research, education, or public service programs
             115      that benefit impacted counties or political subdivisions of the counties.
             116          (b) Each contract under Subsection [(4)] (5)(a) shall be:
             117          (i) based on an application to the impact board from the impacted county; and
             118          (ii) approved by the county legislative body.
             119          (c) For purposes of this section, a land use plan is a public service program.
             120          Section 3. Section 9-4-307 is amended to read:


             121           9-4-307. Impact fund administered by impact board -- Eligibility for assistance --
             122      Review by board -- Administration costs -- Annual report.
             123          (1) (a) The impact board shall:
             124          (i) administer the impact fund in a manner that will keep a portion of the impact fund
             125      revolving;
             126          (ii) determine provisions for repayment of loans;
             127          (iii) establish criteria for determining eligibility for assistance under this part; and
             128          (iv) consider recommendations from the School and Institutional Trust Lands
             129      Administration when awarding a grant described in Subsection 9-4-303 (6).
             130          (b) (i) Criteria for awarding loans or grants made from funds described in Subsection
             131      9-4-303 (5) shall be consistent with Subsection 9-4-303 (5).
             132          (ii) Criteria for awarding grants made from funds described in Subsection
             133      9-4-303 (2)(c) shall be consistent with Subsection 9-4-303 (6).
             134          (c) In order to receive assistance under this part, subdivisions and interlocal agencies
             135      shall submit formal applications containing the information that the impact board requires.
             136          (2) In determining eligibility for loans and grants under this part except for Subsection
             137      9-4-305 (2), the impact board shall consider the following:
             138          (a) the subdivision's or interlocal agency's current mineral lease production;
             139          (b) the feasibility of the actual development of a resource that may impact the
             140      subdivision or interlocal agency directly or indirectly;
             141          (c) current taxes being paid by the subdivision's or interlocal agency's residents;
             142          (d) the borrowing capacity of the subdivision or interlocal agency, its ability and
             143      willingness to sell bonds or other securities in the open market, and its current and authorized
             144      indebtedness;
             145          (e) all possible additional sources of state and local revenue, including utility user
             146      charges;
             147          (f) the availability of federal assistance funds;
             148          (g) probable growth of population due to actual or prospective natural resource
             149      development in an area;
             150          (h) existing public facilities and services;
             151          (i) the extent of the expected direct or indirect impact upon public facilities and


             152      services of the actual or prospective natural resource development in an area; and
             153          (j) the extent of industry participation in an impact alleviation plan, either as specified
             154      in Title 63M, Chapter 5, Resource Development Act, or otherwise.
             155          (3) Before the impact board may make a grant to a city under Subsection 9-4-305 (2),
             156      the impact board shall find that the city is experiencing a substantial hardship in making
             157      payments on bonded indebtedness as a result of receiving a qualifying sales and use tax
             158      distribution reduction.
             159          [(3)] (4) The impact board may not fund any education project that could otherwise
             160      have reasonably been funded by a school district through a program of annual budgeting,
             161      capital budgeting, bonded indebtedness, or special assessments.
             162          [(4)] (5) The impact board may restructure all or part of the agency's or subdivision's
             163      liability to repay loans for extenuating circumstances.
             164          [(5)] (6) The impact board shall:
             165          (a) review the proposed uses of the impact fund for loans or grants before approving
             166      them and may condition its approval on whatever assurances that the impact board considers to
             167      be necessary to ensure that the proceeds of the loan or grant will be used in accordance with the
             168      Leasing Act and this part; and
             169          (b) ensure that each loan specifies the terms for repayment and is evidenced by general
             170      obligation, special assessment, or revenue bonds, notes, or other obligations of the appropriate
             171      subdivision or interlocal agency issued to the impact board under whatever authority for the
             172      issuance of those bonds, notes, or obligations exists at the time of the loan.
             173          [(6)] (7) The impact board shall allocate from the impact fund to the department those
             174      funds that are appropriated by the Legislature for the administration of the impact fund, but this
             175      amount may not exceed 2% of the annual receipts to the impact fund.
             176          [(7)] (8) The department shall make an annual report to the Legislature concerning the
             177      number and type of loans and grants made as well as a list of subdivisions and interlocal
             178      agencies that received this assistance.
             179          Section 4. Section 59-12-205 is amended to read:
             180           59-12-205. Ordinances to conform with statutory amendments -- Distribution of
             181      tax revenues -- Determination of population.
             182          (1) A county, city, or town, in order to maintain in effect sales and use tax ordinances


             183      adopted pursuant to Section 59-12-204 , shall, within 30 days of an amendment to an applicable
             184      provision of Part 1, Tax Collection, adopt amendments to the county's, city's, or town's sales
             185      and use tax ordinances as required to conform to the amendments to Part 1, Tax Collection.
             186          (2) Except as provided in Subsections (3) through (5) and subject to Subsection (6):
             187          (a) 50% of each dollar collected from the sales and use tax authorized by this part shall
             188      be distributed to each county, city, and town on the basis of the percentage that the population
             189      of the county, city, or town bears to the total population of all counties, cities, and towns in the
             190      state; and
             191          (b) (i) except as provided in Subsection (2)(b)(ii), 50% of each dollar collected from
             192      the sales and use tax authorized by this part shall be distributed to each county, city, and town
             193      on the basis of the location of the transaction as determined under Sections 59-12-211 through
             194      59-12-215 ; and
             195          (ii) 50% of each dollar collected from the sales and use tax authorized by this part
             196      within a project area described in a project area plan adopted by the military installation
             197      development authority under Title 63H, Chapter 1, Military Installation Development
             198      Authority Act, shall be distributed to the military installation development authority created in
             199      Section 63H-1-201 .
             200          (3) (a) [Beginning] Except as provided in Subsection (3)(e), beginning on July 1, 2011,
             201      and ending on June 30, 2016, the commission shall each year distribute to a county, city, or
             202      town the distribution required by this Subsection (3) if:
             203          (i) the county, city, or town is a:
             204          (A) county of the third, fourth, fifth, or sixth class;
             205          (B) city of the fifth class; or
             206          (C) town;
             207          (ii) the county, city, or town received a distribution under this section for the calendar
             208      year beginning on January 1, 2008, that was less than the distribution under this section that the
             209      county, city, or town received for the calendar year beginning on January 1, 2007;
             210          (iii) (A) for a county described in Subsection (3)(a)(i)(A), the county had located
             211      within the unincorporated area of the county for one or more days during the calendar year
             212      beginning on January 1, 2008, an establishment described in NAICS Industry Group 2121,
             213      Coal Mining, or NAICS Code 213113, Support Activities for Coal Mining, of the 2002 North


             214      American Industry Classification System of the federal Executive Office of the President,
             215      Office of Management and Budget; or
             216          (B) for a city described in Subsection (3)(a)(i)(B) or a town described in Subsection
             217      (3)(a)(i)(C), the city or town had located within the city or town for one or more days during
             218      the calendar year beginning on January 1, 2008, an establishment described in NAICS Industry
             219      Group 2121, Coal Mining, or NAICS Code 213113, Support Activities for Coal Mining, of the
             220      2002 North American Industry Classification System of the federal Executive Office of the
             221      President, Office of Management and Budget; and
             222          (iv) (A) for a county described in Subsection (3)(a)(i)(A), at least one establishment
             223      described in Subsection (3)(a)(iii)(A) located within the unincorporated area of the county for
             224      one more days during the calendar year beginning on January 1, 2008, was not the holder of a
             225      direct payment permit under Section 59-12-107.1 ; or
             226          (B) for a city described in Subsection (3)(a)(i)(B) or a town described in Subsection
             227      (3)(a)(i)(C), at least one establishment described in Subsection (3)(a)(iii)(B) located within a
             228      city or town for one or more days during the calendar year beginning on January 1, 2008, was
             229      not the holder of a direct payment permit under Section 59-12-107.1 .
             230          (b) The commission shall make the distribution required by this Subsection (3) to a
             231      county, city, or town described in Subsection (3)(a):
             232          (i) from the distribution required by Subsection (2)(a); and
             233          (ii) before making any other distribution required by this section.
             234          (c) (i) For purposes of this Subsection (3), the distribution is the amount calculated by
             235      multiplying the fraction calculated under Subsection (3)(c)(ii) by $333,583.
             236          (ii) For purposes of Subsection (3)(c)(i):
             237          (A) the numerator of the fraction is the difference calculated by subtracting the
             238      distribution a county, city, or town described in Subsection (3)(a) received under this section
             239      for the calendar year beginning on January 1, 2008, from the distribution under this section that
             240      the county, city, or town received for the calendar year beginning on January 1, 2007; and
             241          (B) the denominator of the fraction is $333,583.
             242          (d) A distribution required by this Subsection (3) is in addition to any other distribution
             243      required by this section.
             244          (e) For fiscal year 2011-12 only, a distribution required by this Subsection (3) to a


             245      qualifying city, as defined in Section 9-4-302 , shall be reduced:
             246          (i) by the amount of a grant the Permanent Community Impact Fund Board makes to
             247      the qualifying city in accordance with Subsection 9-4-305 (2); and
             248          (ii) by an amount that does not exceed the distribution that the qualifying city would
             249      otherwise receive under this Subsection (3) but for this Subsection (3)(e).
             250          (4) (a) For fiscal years beginning with fiscal year 1983-84 and ending with fiscal year
             251      2005-06, a county, city, or town may not receive a tax revenue distribution less than .75% of
             252      the taxable sales within the boundaries of the county, city, or town.
             253          (b) The commission shall proportionally reduce monthly distributions to any county,
             254      city, or town that, but for the reduction, would receive a distribution in excess of 1% of the
             255      sales and use tax revenue collected within the boundaries of the county, city, or town.
             256          (5) (a) As used in this Subsection (5):
             257          (i) "Eligible county, city, or town" means a county, city, or town that receives $2,000 or
             258      more in tax revenue distributions in accordance with Subsection (4) for each of the following
             259      fiscal years:
             260          (A) fiscal year 2002-03;
             261          (B) fiscal year 2003-04; and
             262          (C) fiscal year 2004-05.
             263          (ii) "Minimum tax revenue distribution" means the greater of:
             264          (A) the total amount of tax revenue distributions an eligible county, city, or town
             265      receives from a tax imposed in accordance with this part for fiscal year 2000-01; or
             266          (B) the total amount of tax revenue distributions an eligible county, city, or town
             267      receives from a tax imposed in accordance with this part for fiscal year 2004-05.
             268          (b) (i) Except as provided in Subsection (5)(b)(ii), beginning with fiscal year 2006-07
             269      and ending with fiscal year 2012-13, an eligible county, city, or town shall receive a tax
             270      revenue distribution for a tax imposed in accordance with this part equal to the greater of:
             271          (A) the payment required by Subsection (2); or
             272          (B) the minimum tax revenue distribution.
             273          (ii) If the tax revenue distribution required by Subsection (5)(b)(i) for an eligible
             274      county, city, or town is equal to the amount described in Subsection (5)(b)(i)(A) for three
             275      consecutive fiscal years, for fiscal years beginning with the fiscal year immediately following


             276      that three consecutive fiscal year period, the eligible county, city, or town shall receive the tax
             277      revenue distribution equal to the payment required by Subsection (2).
             278          (c) For a fiscal year beginning with fiscal year 2013-14 and ending with fiscal year
             279      2015-16, an eligible county, city, or town shall receive the minimum tax revenue distribution
             280      for that fiscal year if for fiscal year 2012-13 the payment required by Subsection (2) to that
             281      eligible county, city, or town is less than or equal to the product of:
             282          (i) the minimum tax revenue distribution; and
             283          (ii) .90.
             284          (6) (a) Population figures for purposes of this section shall be based on the most recent
             285      official census or census estimate of the United States Census Bureau.
             286          (b) If a needed population estimate is not available from the United States Census
             287      Bureau, population figures shall be derived from the estimate from the Utah Population
             288      Estimates Committee created by executive order of the governor.
             289          (c) The population of a county for purposes of this section shall be determined only
             290      from the unincorporated area of the county.
             291          Section 5. Section 63I-1-209 is amended to read:
             292           63I-1-209. Repeal dates, Title 9.
             293          (1) Title 9, Chapter 1, Part 8, Commission on National and Community Service Act, is
             294      repealed July 1, 2014.
             295          (2) Subsection 9-4-302 (6), defining "qualifying city," is repealed January 1, 2013.
             296          (3) Subsection 9-4-305 (2), related to a grant for fiscal year 2011-12 only, is repealed
             297      January 1, 2013.
             298          (4) The language in Subsection 9-4-307 (2) that reads "except for Subsection
             299      9-4-305 (2)" is repealed January 1, 2013.
             300          (5) Subsection 9-4-307 (3), requiring the Permanent Community Impact Fund Board to
             301      make a finding before making a grant to a city under Subsection 9-4-305 (2), is repealed
             302      January 1, 2013.
             303          [(2)] (6) Title 9, Chapter 4, Part 9, Utah Housing Corporation Act, is repealed July 1,
             304      2016.
             305          Section 6. Section 63I-1-259 is amended to read:
             306           63I-1-259. Repeal dates, Title 59.


             307          (1) Subsection 59-2-924 (3)(g) is repealed on December 31, 2016.
             308          (2) Section 59-2-924.3 is repealed on December 31, 2016.
             309          (3) Section 59-9-102.5 is repealed December 31, 2020.
             310          (4) The language in Subsection 59-12-205 (3)(a) that reads "Except as provided in
             311      Subsection (3)(e)," is repealed January 1, 2013.
             312          (5) Subsection 59-12-205 (3)(e), requiring a distribution to a qualifying city to be
             313      reduced, is repealed January 1, 2013.
             314          Section 7. Effective date.
             315          If approved by two-thirds of all the members elected to each house, this bill takes effect
             316      upon approval by the governor, or the day following the constitutional time limit of Utah
             317      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
             318      the date of veto override.




Legislative Review Note
    as of 11-17-11 1:58 PM


Office of Legislative Research and General Counsel


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