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First Substitute S.B. 243

Senator Daniel W. Thatcher proposes the following substitute bill:


             1     
REPEAL OF ILLEGAL DRUG STAMP TAX ACT

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Daniel W. Thatcher

             5     
House Sponsor: Johnny Anderson

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill repeals the Illegal Drug Stamp Tax Act and related references to the Act and
             10      requires the Division of Finance to deposit the money in the Drug Stamp Tax Fund into
             11      the General Fund.
             12      Highlighted Provisions:
             13          This bill:
             14          .    repeals the Illegal Drug Stamp Tax Act on July 1, 2012;
             15          .    requires the Division of Finance to deposit the money in the Drug Stamp Tax Fund
             16      into the General Fund;
             17          .    repeals references to the Illegal Drug Stamp Tax Act; and
             18          .    makes technical and conforming changes.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          This bill provides effective dates.
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          59-19-105, as last amended by Laws of Utah 2009, Chapter 183


             26          63I-2-259, as renumbered and amended by Laws of Utah 2008, Chapter 382
             27          63J-1-104, as last amended by Laws of Utah 2011, Chapter 342
             28          63J-2-202, as last amended by Laws of Utah 2009, Chapters 183 and 368
             29     
             30      Be it enacted by the Legislature of the state of Utah:
             31          Section 1. Section 59-19-105 is amended to read:
             32           59-19-105. Stamps to be affixed to marihuana and controlled substance --
             33      Anonymity provided when purchasing stamps -- Collection and distribution of tax --
             34      Property in kind.
             35          (1) When a dealer purchases, acquires, transports, or imports into this state marihuana
             36      or controlled substances, the dealer shall permanently affix the official indicia on the
             37      marihuana or controlled substances evidencing the payment of the tax required under this
             38      chapter. A stamp or other official indicia may not be used more than once.
             39          (2) Taxes imposed upon marihuana or controlled substances by this chapter are due
             40      and payable immediately upon acquisition or possession in this state by a dealer.
             41          (3) Payments required by this chapter shall be made to the commission on forms
             42      provided by the commission.
             43          (4) (a) A dealer is not required to give the dealer's name, address, Social Security
             44      number, or other identifying information on the form.
             45          (b) The commission or its employees may not reveal any facts contained in any report,
             46      form, or return required by this chapter or any information obtained from a dealer.
             47          (c) None of the information contained in a report, form, or return or otherwise obtained
             48      from a dealer in connection with this section may be used against the dealer in any criminal
             49      proceeding unless it is independently obtained, except in connection with a proceeding
             50      involving taxes due under this chapter from the dealer making the return. This Subsection
             51      (4)(c) supersedes any provision to the contrary.
             52          (d) A person who discloses information in violation of this Subsection (4) is guilty of a
             53      class A misdemeanor.
             54          (5) This section does not prohibit the commission from publishing statistics that do not
             55      disclose the identity of a dealer or the actual contents of any reports, forms, or returns.
             56          (6) (a) The commission shall collect all taxes imposed under this chapter. [Amounts]


             57      Except as provided in Subsection (6)(d), amounts collected under this chapter, whether
             58      characterized as taxes, interest, or penalties, shall be deposited in the Drug Stamp Tax Fund as
             59      a dedicated credit and shall be applied and distributed under Section 63J-1-104 of the
             60      Budgetary Procedures Act as follows:
             61          (i) 40% to the commission for administrative costs of recovery; and
             62          (ii) 60% to the law enforcement agency conducting the controlled substance
             63      investigation, to be used and applied by the agency in the continued enforcement of controlled
             64      substance laws.
             65          (b) [If] Except as provided in Subsection (6)(d), if there is more than one participating
             66      law enforcement agency, the 60% under Subsection (6)(a)(ii) shall be divided equitably and
             67      distributed among the agencies by the administrative law judge conducting the hearing to
             68      determine taxpayer liability. The distribution shall be based upon the extent of agency
             69      participation as appears from evidence submitted by each agency relative to actual time and
             70      expense incurred in the investigation.
             71          (c) [If] Except as provided in Subsection (6)(d), if no law enforcement agency is
             72      involved in the collection of a specific amount under this chapter, the entire amount collected
             73      shall be applied under Subsection (6)(a)(i) to administrative costs of recovery.
             74          (d) On or before June 30, 2012, the Division of Finance shall deposit the money in the
             75      Drug Stamp Tax Fund into the General Fund.
             76          (7) (a) If property in kind obtained from the taxpayer is of use or benefit to the
             77      commission in the enforcement of this chapter or is of use or benefit to the participating law
             78      enforcement agency in the continued enforcement of controlled substance laws, either the
             79      commission or the law enforcement agency may apply to the administrative law judge for the
             80      award of the property. If the administrative law judge finds the property is of use or benefit
             81      either to the commission or the law enforcement agency, the property shall be awarded
             82      accordingly.
             83          (b) Before an award under this Subsection (7) is ordered, the property shall be
             84      appraised by a court-appointed appraiser and the appraised value shall be credited to the
             85      taxpayer. If the taxpayer objects to the results of the court-appointed appraisal, the taxpayer
             86      may obtain the taxpayer's own appraisal at the taxpayer's own expense within 10 days of the
             87      court-appointed appraisal. The decision of the administrative law judge as to value is


             88      controlling.
             89          (c) The value of any property in kind awarded to the commission or to the participating
             90      law enforcement agency shall be counted as a portion of its percentage share under Subsection
             91      (6).
             92          (8) Property of the taxpayer otherwise subject to forfeiture under Section 58-37-13 is
             93      not affected by this chapter if there is compliance with Section 58-37-13 regarding the
             94      forfeiture and the proceeds and property seized and forfeited are accordingly divided and
             95      distributed.
             96          Section 2. Section 63I-2-259 is amended to read:
             97           63I-2-259. Repeal dates -- Title 59.
             98          Title 59, Chapter 19, Illegal Drug Stamp Tax Act, is repealed July 1, 2012.
             99          Section 3. Section 63J-1-104 is amended to read:
             100           63J-1-104. Revenue types -- Disposition of funds collected or credited by a state
             101      agency.
             102          (1) (a) The Division of Finance shall:
             103          (i) account for revenues in accordance with generally accepted accounting principles;
             104      and
             105          (ii) use the major revenue types in internal accounting.
             106          (b) Each agency shall:
             107          (i) use the major revenue types to account for revenues;
             108          (ii) deposit revenues and other public funds received by them by following the
             109      procedures and requirements of Title 51, Chapter 7, State Money Management Act; and
             110          (iii) expend revenues and public funds as required by this chapter.
             111          (2) (a) Each agency shall deposit its free revenues into the appropriate fund.
             112          (b) An agency may expend free revenues up to the amount specifically appropriated by
             113      the Legislature.
             114          (c) Any free revenue funds appropriated by the Legislature to an agency that remain
             115      unexpended at the end of the fiscal year lapse to the source fund unless the Legislature provides
             116      by law that those funds are nonlapsing.
             117          (3) (a) Each agency shall deposit its restricted revenues into the applicable restricted
             118      account or fund.


             119          (b) Revenues in a restricted account or fund do not lapse to another account or fund
             120      unless otherwise specifically provided for by law or legislative appropriation.
             121          (c) The Legislature may appropriate restricted revenues from a restricted account or
             122      fund for the specific purpose or program designated by law.
             123          (d) If the fund equity of a restricted account or fund is insufficient to provide the
             124      accounts appropriated from it by the Legislature, the Division of Finance may reduce the
             125      appropriation to a level that ensures that the fund equity is not less than zero.
             126          (e) Any restricted revenues appropriated by the Legislature to an agency that remain
             127      unexpended at the end of the fiscal year lapse to the applicable restricted account or fund unless
             128      the Legislature provides by law that those appropriations, or the program or line item financed
             129      by those appropriations, are nonlapsing.
             130          (4) (a) An agency may expend dedicated credits for any purpose within the program or
             131      line item.
             132          (b) (i) Except as provided in Subsection (4)(b)(ii), an agency may not expend dedicated
             133      credits in excess of the amount appropriated as dedicated credits by the Legislature.
             134          (ii) In order to expend dedicated credits in excess of the amount appropriated as
             135      dedicated credits by the Legislature, the following procedure shall be followed:
             136          (A) The agency seeking to make the excess expenditure shall:
             137          (I) develop a new work program that:
             138          (Aa) consists of the currently approved work program and the excess expenditure
             139      sought to be made; and
             140          (Bb) complies with the requirements of Section 63J-2-202 ;
             141          (II) prepare a written justification for the new work program that sets forth the purpose
             142      and necessity of the excess expenditure; and
             143          (III) submit the new work program and the written justification for the new work
             144      program to the Division of Finance.
             145          (B) The Division of Finance shall process the new work program with written
             146      justification and make this information available to the Governor's Office of Planning and
             147      Budget and the legislative fiscal analyst.
             148          (iii) An expenditure of dedicated credits in excess of amounts appropriated as
             149      dedicated credits by the Legislature may not be used to permanently increase personnel within


             150      the agency unless:
             151          (A) the increase is approved by the Legislature; or
             152          (B) the money is deposited as a dedicated credit in[: (I) the Drug Stamp Tax Fund
             153      under Section 59-19-105 ; or (II)] a line item covering tuition or federal vocational funds at an
             154      institution of higher education.
             155          (c) (i) All excess dedicated credits lapse to the appropriate fund at the end of the fiscal
             156      year unless the Legislature has designated the entire program or line item that is partially or
             157      fully funded from dedicated credits as nonlapsing.
             158          (ii) The Division of Finance shall determine the appropriate fund into which the
             159      dedicated credits lapse.
             160          (5) (a) The Legislature may establish by law the maximum amount of fixed collections
             161      that an agency may expend.
             162          (b) If an agency receives less than the maximum amount of expendable fixed
             163      collections established by law, the agency's authority to expend is limited to the amount of
             164      fixed collections that it receives.
             165          (c) If an agency receives fixed collections greater than the maximum amount of
             166      expendable fixed collections established by law, those excess amounts lapse to the General
             167      Fund, the Education Fund, the Transportation Fund, or the Transportation Investment Fund of
             168      2005 as designated by the director of the Division of Finance at the end of the fiscal year.
             169          (6) Unless otherwise specifically provided by law, when an agency has a program or
             170      line item that is funded by more than one major revenue type:
             171          (a) the agency shall expend its dedicated credits and fixed collections first; and
             172          (b) if the program or line item includes both free revenue and restricted revenue, an
             173      agency shall expend those revenues based upon a proration of the amounts appropriated from
             174      each of those major revenue types.
             175          Section 4. Section 63J-2-202 is amended to read:
             176           63J-2-202. Disposition of revenues -- Reporting of balances in dedicated credits
             177      and fixed collections.
             178          (1) (a) Each agency shall include in its annual budget request estimates of dedicated
             179      credits revenues and fixed collections revenues that are identified by, collected for, or set by the
             180      agency.


             181          (b) If the Legislature or the Division of Finance establishes a new revenue type by law,
             182      the agency shall include that new revenue type in its budget request for the next fiscal year.
             183          (c) (i) Except as provided in Subsection (1)(c)(ii), if any agency fails to include the
             184      estimates of a revenue type in its annual budget request, the Division of Finance shall deposit
             185      the money collected in that revenue type into the General Fund or other appropriate fund as
             186      free or restricted revenue.
             187          (ii) The Division of Finance may not deposit the money collected from a revenue type
             188      not included in an agency's annual budget request into the General Fund or other appropriate
             189      fund if the agency did not include the estimates of the revenue type in its annual budget request
             190      because the Legislature had not yet established or authorized the new revenue type by law.
             191          (2) (a) (i) (A) Except as provided in Subsection (2)(a)(i)(B) or (2)(b), each agency that
             192      receives dedicated credits and fixed collections revenues greater than the amount appropriated
             193      to them by the Legislature in the annual appropriations act may expend the excess up to 25% of
             194      the amount appropriated if the expenditure is authorized by an amended work program
             195      approved as provided in Section 63J-1-209 . [However, except for money deposited as
             196      dedicated credits in the Illegal Drug Stamp Tax Fund under Section 59-19-105 or]
             197          (B) Except for line items covering tuition and federal vocational funds at institutions of
             198      higher learning, any expenditure of dedicated credits in excess of amounts appropriated by the
             199      Legislature may not be used to permanently increase personnel within the agency unless
             200      approved by the Legislature.
             201          (ii) The Division of Finance shall deposit the balance of that excess into the General
             202      Fund or other appropriate fund as free or restricted revenue.
             203          (b) Notwithstanding the requirements of Subsection (2)(a), when an agency's dedicated
             204      credits and fixed collections revenues represent over 90% of the budget of the program for
             205      which they are collected, the agency may expend 100% of the excess of the amount
             206      appropriated if the expenditure is authorized by an amended work program approved as
             207      provided in Section 63J-1-209 .
             208          (3) Each agency that receives dedicated credits or fixed collections shall report, to the
             209      Division of Finance, any balances remaining in those funds at the conclusion of each fiscal
             210      year.
             211          Section 5. Effective dates.


             212          (1) Except as provided in Subsection (2), this bill takes effect on May 8, 2012.
             213          (2) The amendments to Sections 63J-1-104 and 63J-2-202 take effect on July 1, 2012.


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