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Second Substitute H.J.R. 6

Representative Jim Nielson proposes the following substitute bill:




Chief Sponsor: Jim Nielson

Senate Sponsor: Lyle W. Hillyard

             7      LONG TITLE
             8      General Description:
             9          This joint resolution of the Legislature proposes to amend the Utah Constitution to
             10      require certain severance tax revenue to be deposited into the permanent state trust
             11      fund.
             12      Highlighted Provisions:
             13          This resolution proposes to amend the Utah Constitution to:
             14          .    require specified percentages of annual severance tax revenue, except revenue that
             15      by statute is used for purposes related to the Ute Indian Tribe and the Navajo
             16      Nation, to be deposited into the permanent state trust fund; and
             17          .    require deposits to be phased in.
             18      Special Clauses:
             19          This resolution directs the lieutenant governor to submit this proposal to voters.
             20          This resolution provides a contingent effective date of January 1, 2013 for this proposal.
             21      Utah Constitution Sections Affected:
             22      AMENDS:
             23          ARTICLE XIII, SECTION 5
             24          ARTICLE XXII, SECTION 4

             26      Be it resolved by the Legislature of the state of Utah, two-thirds of all members elected to each
             27      of the two houses voting in favor thereof:
             28          Section 1. It is proposed to amend Utah Constitution Article XIII, Section 5, to read:
             29           Article XIII, Section 5. [Use and amount of taxes and expenditures.]
             30          (1) The Legislature shall provide by statute for an annual tax sufficient, with other
             31      revenues, to defray the estimated ordinary expenses of the State for each fiscal year.
             32          (2) (a) For any fiscal year, the Legislature may not make an appropriation or authorize
             33      an expenditure if the State's expenditure exceeds the total tax provided for by statute and
             34      applicable to the particular appropriation or expenditure.
             35          (b) Subsection (2)(a) does not apply to an appropriation or expenditure to suppress
             36      insurrection, defend the State, or assist in defending the United States in time of war.
             37          (3) For any debt of the State, the Legislature shall provide by statute for an annual tax
             38      sufficient to pay:
             39          (a) the annual interest; and
             40          (b) the principal within 20 years after the final passage of the statute creating the debt.
             41          (4) Except as provided in Article X, Section 5, Subsection (5)(a), the Legislature may
             42      not impose a tax for the purpose of a political subdivision of the State, but may by statute
             43      authorize political subdivisions of the State to assess and collect taxes for their own purposes.
             44          (5) All revenue from taxes on intangible property or from a tax on income shall be used
             45      to support the systems of public education and higher education as defined in Article X,
             46      Section 2.
             47          (6) Proceeds from fees, taxes, and other charges related to the operation of motor
             48      vehicles on public highways and proceeds from an excise tax on liquid motor fuel used to
             49      propel those motor vehicles shall be used for:
             50          (a) statutory refunds and adjustments and costs of collection and administration;
             51          (b) the construction, maintenance, and repair of State and local roads, including
             52      payment for property taken for or damaged by rights-of-way and for associated administrative
             53      costs;
             54          (c) driver education;
             55          (d) enforcement of state motor vehicle and traffic laws; and
             56          (e) the payment of the principal of and interest on any obligation of the State or a city

             57      or county, issued for any of the purposes set forth in Subsection (6)(b) and to which any of the
             58      fees, taxes, or other charges described in this Subsection (6) have been pledged, including any
             59      paid to the State or a city or county, as provided by statute.
             60          (7) Fees and taxes on tangible personal property imposed under Section 2, Subsection
             61      (6) of this article are not subject to Subsection (6) of this Section 5 and shall be distributed to
             62      the taxing districts in which the property is located in the same proportion as that in which the
             63      revenue collected from real property tax is distributed.
             64          (8) A political subdivision of the State may share its tax and other revenues with
             65      another political subdivision of the State as provided by statute.
             66          (9) (a) Revenue from each severance tax provided by statute, except revenue that by
             67      statute is used for purposes related to the Ute Indian Tribe or the Navajo Nation, shall be
             68      deposited into the permanent state trust fund under Article XXII, Section 4, as provided in
             69      Subsections (9)(b) and (c).
             70          (b) Beginning July 1, 2016, severance tax revenue described in Subsection (9)(a) shall
             71      be deposited into the permanent state trust fund as follows:
             72          (i) 25% of the first $50,000,000 of annual revenue;
             73          (ii) 50% of the next $50,000,000 of annual revenue; and
             74          (iii) 75% of the annual revenue that exceeds $100,000,000.
             75          (c) The annual amount of deposits of severance tax revenue described in Subsection
             76      (9)(a) into the permanent state trust fund shall increase over time until July 1, 2016, when
             77      revenue shall thereafter be deposited into the permanent state trust fund as provided in
             78      Subsection (9)(b).
             79          Section 2. It is proposed to amend Utah Constitution Article XXII, Section 4, to read:
             80           Article XXII, Section 4. [State trust fund -- Principal to be held in perpetuity --
             81      Use of income.]
             82          (1) There is established a permanent state trust fund consisting of:
             83          (a) as provided by statute or appropriation, funds that the state receives relating to the
             84      November 1998 settlement agreement with leading tobacco manufacturers;
             85          (b) money or other assets given to the fund under any provision of law; [and]
             86          (c) severance tax revenue, as provided in Article XIII, Section 5, Subsection (9); and
             87          [(c)] (d) other funds and assets that the trust fund receives by bequest or private

             88      donation.
             89          (2) Except as provided in Subsection (4), the state treasurer shall, as provided by
             90      statute, hold all trust funds and assets in trust and invest them for the benefit of the people of
             91      the state in perpetuity.
             92          (3) The income from the state trust fund shall be deposited into the General Fund.
             93          (4) With the concurrence of the governor and three-fourths of each house of the
             94      Legislature, funds or assets in the trust fund may be removed from the fund for deposit into the
             95      General Fund.
             96          Section 3. Submittal to voters.
             97          The lieutenant governor is directed to submit this proposed amendment to the voters of
             98      the state at the next regular general election in the manner provided by law.
             99          Section 4. Effective date.
             100          If the amendment proposed by this joint resolution is approved by a majority of those
             101      voting on it at the next regular general election, the amendment shall take effect on January 1,
             102      2013.

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