1     
MINERAL LEASE DISTRIBUTION AMENDMENTS

2     
2018 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Kevin T. Van Tassell

5     
House Sponsor: Scott H. Chew

6     

7     LONG TITLE
8     Committee Note:
9          The Transportation Interim Committee recommended this bill.
10     General Description:
11          This bill modifies provisions related to the distribution of mineral lease funds.
12     Highlighted Provisions:
13          This bill:
14          ▸     provides that each year the Division of Finance shall distribute an amount of federal
15     mineral lease money to certain local government entities.
16     Money Appropriated in this Bill:
17          None
18     Other Special Clauses:
19          This bill provides a special effective date.
20     Utah Code Sections Affected:
21     AMENDS:
22          59-21-1, as last amended by Laws of Utah 2012, Chapter 212
23          59-21-2, as last amended by Laws of Utah 2016, Chapters 183 and 184
24     

25     Be it enacted by the Legislature of the state of Utah:
26          Section 1. Section 59-21-1 is amended to read:
27          59-21-1. Disposition of federal mineral lease money -- Priority to political

28     subdivisions impacted by mineral development -- Disposition of mineral bonus payments
29     -- Appropriation of money attributable to royalties from extraction of minerals on federal
30     land located within boundaries of Grand Staircase-Escalante National Monument.
31          (1) Except as provided in Subsections (2) through (4), all money received from the
32     United States under the provisions of the Mineral Lands Leasing Act, 30 U.S.C. Sec. 181 et
33     seq., shall:
34          (a) be deposited in the Mineral Lease Account of the General Fund; and
35          (b) be appropriated by the Legislature giving priority to those subdivisions of the state
36     socially or economically impacted by development of minerals leased under the Mineral Lands
37     Leasing Act, for:
38          (i) planning;
39          (ii) construction and maintenance of public facilities; and
40          (iii) provision of public services.
41          (2) Seventy percent of money received from federal mineral lease bonus payments
42     shall be deposited into the Permanent Community Impact Fund and shall be used as provided
43     in Title 35A, Chapter 8, Part 3, Community Impact Alleviation.
44          (3) Thirty percent of money received from federal mineral lease bonus payments shall
45     be deposited in the Mineral Bonus Account created by Subsection 59-21-2(1) and appropriated
46     as provided in that subsection.
47          (4) (a) For purposes of this Subsection (4):
48          (i) the "boundaries of the Grand Staircase-Escalante National Monument" means the
49     boundaries:
50          (A) established by Presidential Proclamation No. 6920, 61 Fed. Reg. 50,223 (1996);
51     and
52          (B) modified by:
53          (I) Pub. L. No. 105-335, 112 Stat. 3139; and
54          (II) Pub. L. No. 105-355, 112 Stat. 3247; and
55          (ii) a special service district, school district, or federal land is considered to be located
56     within the boundaries of the Grand Staircase-Escalante National Monument if a portion of the
57     special service district, school district, or federal land is located within the boundaries
58     described in Subsection (4)(a)(i).

59          (b) Beginning on July 1, 1999, the Legislature shall appropriate, as provided in
60     Subsections (4)(c) through (g), money received from the United States that is attributable to
61     royalties from the extraction of minerals on federal land that, on September 18, 1996, was
62     located within the boundaries of the Grand Staircase-Escalante National Monument.
63          (c) The Legislature shall annually appropriate 40% of the money described in
64     Subsection (4)(b) to the [Department of Transportation] Division of Finance to be distributed
65     by the [Department of Transportation] Division of Finance to special service districts that are:
66          (i) established by counties under Title 17D, Chapter 1, Special Service District Act;
67          (ii) socially or economically impacted by the development of minerals under the
68     Mineral Lands Leasing Act; and
69          (iii) located within the boundaries of the Grand Staircase-Escalante National
70     Monument.
71          (d) The [Department of Transportation] Division of Finance shall distribute the money
72     described in Subsection (4)(c) in amounts proportionate to the amount of federal mineral lease
73     money generated by the county in which a special service district is located.
74          (e) The Legislature shall annually appropriate 40% of the money described in
75     Subsection (4)(b) to the State Board of Education to be distributed equally to school districts
76     that are:
77          (i) socially or economically impacted by the development of minerals under the
78     Mineral Lands Leasing Act; and
79          (ii) located within the boundaries of the Grand Staircase-Escalante National
80     Monument.
81          (f) The Legislature shall annually appropriate 2.25% of the money described in
82     Subsection (4)(b) to the Utah Geological Survey to facilitate the development of energy and
83     mineral resources in counties that are:
84          (i) socially or economically impacted by the development of minerals under the
85     Mineral Lands Leasing Act; and
86          (ii) located within the boundaries of the Grand Staircase-Escalante National
87     Monument.
88          (g) Seventeen and three-fourths percent of the money described in Subsection (4)(b)
89     shall be deposited annually into the State School Fund established by Utah Constitution Article

90     X, Section 5.
91          Section 2. Section 59-21-2 is amended to read:
92          59-21-2. Mineral Bonus Account created -- Contents -- Use of Mineral Bonus
93     Account money -- Mineral Lease Account created -- Contents -- Appropriation of money
94     from Mineral Lease Account.
95          (1) (a) There is created a restricted account within the General Fund known as the
96     "Mineral Bonus Account."
97          (b) The Mineral Bonus Account consists of federal mineral lease bonus payments
98     deposited pursuant to Subsection 59-21-1(3).
99          (c) The Legislature shall make appropriations from the Mineral Bonus Account in
100     accordance with Section 35 of the Mineral Lands Leasing Act of 1920, 30 U.S.C. Sec. 191.
101          (d) The state treasurer shall:
102          (i) invest the money in the Mineral Bonus Account by following the procedures and
103     requirements of Title 51, Chapter 7, State Money Management Act; and
104          (ii) deposit all interest or other earnings derived from the account into the Mineral
105     Bonus Account.
106          (e) The Division of Finance shall, beginning on July 1, 2017, annually deposit 30% of
107     mineral lease bonus payments deposited under Subsection (1)(b) from the previous fiscal year
108     into the Wildland Fire Suppression Fund created in Section 65A-8-204, up to $2,000,000 but
109     not to exceed 20% of the amount expended in the previous fiscal year from the Wildland Fire
110     Suppression Fund.
111          (2) (a) There is created a restricted account within the General Fund known as the
112     "Mineral Lease Account."
113          (b) The Mineral Lease Account consists of federal mineral lease money deposited
114     pursuant to Subsection 59-21-1(1).
115          (c) The Legislature shall make appropriations from the Mineral Lease Account as
116     provided in Subsection 59-21-1(1) and this Subsection (2).
117          (d) (i) Except as provided in Subsections (2)(d)(ii) and (iii), the Legislature shall
118     annually appropriate 32.5% of all deposits made to the Mineral Lease Account to the
119     Permanent Community Impact Fund established by Section 35A-8-303.
120          (ii) For fiscal year 2016-17 only and from the amount required to be deposited under

121     Subsection (2)(d)(i), the Legislature shall appropriate $26,000,000 of the deposits made to the
122     Mineral Lease Account to the Impacted Communities Transportation Development Restricted
123     Account established by Section 72-2-128.
124          (iii) For fiscal year 2017-18 only and from the amount required to be deposited under
125     Subsection (2)(d)(i), the Legislature shall appropriate $27,000,000 of the deposits made to the
126     Mineral Lease Account to the Impacted Communities Transportation Development Restricted
127     Account established by Section 72-2-128.
128          (e) The Legislature shall annually appropriate 2.25% of all deposits made to the
129     Mineral Lease Account to the State Board of Education, to be used for education research and
130     experimentation in the use of staff and facilities designed to improve the quality of education in
131     Utah.
132          (f) The Legislature shall annually appropriate 2.25% of all deposits made to the
133     Mineral Lease Account to the Utah Geological Survey, to be used for activities carried on by
134     the survey having as a purpose the development and exploitation of natural resources in the
135     state.
136          (g) The Legislature shall annually appropriate 2.25% of all deposits made to the
137     Mineral Lease Account to the Water Research Laboratory at Utah State University, to be used
138     for activities carried on by the laboratory having as a purpose the development and exploitation
139     of water resources in the state.
140          (h) (i) The Legislature shall annually appropriate to the [Department of Transportation]
141     Division of Finance 40% of all deposits made to the Mineral Lease Account to be distributed as
142     provided in Subsection (2)(h)(ii) to:
143          (A) counties;
144          (B) special service districts established:
145          (I) by counties;
146          (II) under Title 17D, Chapter 1, Special Service District Act; and
147          (III) for the purpose of constructing, repairing, or maintaining roads; or
148          (C) special service districts established:
149          (I) by counties;
150          (II) under Title 17D, Chapter 1, Special Service District Act; and
151          (III) for other purposes authorized by statute.

152          (ii) The [Department of Transportation] Division of Finance shall allocate the funds
153     specified in Subsection (2)(h)(i):
154          (A) in amounts proportionate to the amount of mineral lease money generated by each
155     county; and
156          (B) to a county or special service district established by a county under Title 17D,
157     Chapter 1, Special Service District Act, as determined by the county legislative body.
158          (i) (i) The Legislature shall annually appropriate 5% of all deposits made to the
159     Mineral Lease Account to the Department of Workforce Services to be distributed to:
160          (A) special service districts established:
161          (I) by counties;
162          (II) under Title 17D, Chapter 1, Special Service District Act; and
163          (III) for the purpose of constructing, repairing, or maintaining roads; or
164          (B) special service districts established:
165          (I) by counties;
166          (II) under Title 17D, Chapter 1, Special Service District Act; and
167          (III) for other purposes authorized by statute.
168          (ii) The Department of Workforce Services may distribute the amounts described in
169     Subsection (2)(i)(i) only to special service districts established under Title 17D, Chapter 1,
170     Special Service District Act, by counties:
171          (A) of the third, fourth, fifth, or sixth class;
172          (B) in which 4.5% or less of the mineral lease money within the state is generated; and
173          (C) that are significantly socially or economically impacted as provided in Subsection
174     (2)(i)(iii) by the development of minerals under the Mineral Lands Leasing Act, 30 U.S.C. Sec.
175     181 et seq.
176          (iii) The significant social or economic impact required under Subsection (2)(i)(ii)(C)
177     shall be as a result of:
178          (A) the transportation within the county of hydrocarbons, including solid hydrocarbons
179     as defined in Section 59-5-101;
180          (B) the employment of persons residing within the county in hydrocarbon extraction,
181     including the extraction of solid hydrocarbons as defined in Section 59-5-101; or
182          (C) a combination of Subsections (2)(i)(iii)(A) and (B).

183          (iv) For purposes of distributing the appropriations under this Subsection (2)(i) to
184     special service districts established by counties under Title 17D, Chapter 1, Special Service
185     District Act, the Department of Workforce Services shall:
186          (A) (I) allocate 50% of the appropriations equally among the counties meeting the
187     requirements of Subsections (2)(i)(ii) and (iii); and
188          (II) allocate 50% of the appropriations based on the ratio that the population of each
189     county meeting the requirements of Subsections (2)(i)(ii) and (iii) bears to the total population
190     of all of the counties meeting the requirements of Subsections (2)(i)(ii) and (iii); and
191          (B) after making the allocations described in Subsection (2)(i)(iv)(A), distribute the
192     allocated revenues to special service districts established by the counties under Title 17D,
193     Chapter 1, Special Service District Act, as determined by the executive director of the
194     Department of Workforce Services after consulting with the county legislative bodies of the
195     counties meeting the requirements of Subsections (2)(i)(ii) and (iii).
196          (v) The executive director of the Department of Workforce Services:
197          (A) shall determine whether a county meets the requirements of Subsections (2)(i)(ii)
198     and (iii);
199          (B) shall distribute the appropriations under Subsection (2)(i)(i) to special service
200     districts established by counties under Title 17D, Chapter 1, Special Service District Act, that
201     meet the requirements of Subsections (2)(i)(ii) and (iii); and
202          (C) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
203     may make rules:
204          (I) providing a procedure for making the distributions under this Subsection (2)(i) to
205     special service districts; and
206          (II) defining the term "population" for purposes of Subsection (2)(i)(iv).
207          (j) (i) The Legislature shall annually make the following appropriations from the
208     Mineral Lease Account:
209          (A) an amount equal to 52 cents multiplied by the number of acres of school or
210     institutional trust lands, lands owned by the Division of Parks and Recreation, and lands owned
211     by the Division of Wildlife Resources that are not under an in lieu of taxes contract, to each
212     county in which those lands are located;
213          (B) to each county in which school or institutional trust lands are transferred to the

214     federal government after December 31, 1992, an amount equal to the number of transferred
215     acres in the county multiplied by a payment per acre equal to the difference between 52 cents
216     per acre and the per acre payment made to that county in the most recent payment under the
217     federal payment in lieu of taxes program, 31 U.S.C. Sec. 6901 et seq., unless the federal
218     payment was equal to or exceeded the 52 cents per acre, in which case a payment under this
219     Subsection (2)(j)(i)(B) may not be made for the transferred lands;
220          (C) to each county in which federal lands, which are entitlement lands under the federal
221     in lieu of taxes program, are transferred to the school or institutional trust, an amount equal to
222     the number of transferred acres in the county multiplied by a payment per acre equal to the
223     difference between the most recent per acre payment made under the federal payment in lieu of
224     taxes program and 52 cents per acre, unless the federal payment was equal to or less than 52
225     cents per acre, in which case a payment under this Subsection (2)(j)(i)(C) may not be made for
226     the transferred land; and
227          (D) to a county of the fifth or sixth class, an amount equal to the product of:
228          (I) $1,000; and
229          (II) the number of residences described in Subsection (2)(j)(iv) that are located within
230     the county.
231          (ii) A county receiving money under Subsection (2)(j)(i) may, as determined by the
232     county legislative body, distribute the money or a portion of the money to:
233          (A) special service districts established by the county under Title 17D, Chapter 1,
234     Special Service District Act;
235          (B) school districts; or
236          (C) public institutions of higher education.
237          (iii) (A) Beginning in fiscal year 1994-95 and in each year after fiscal year 1994-95, the
238     Division of Finance shall increase or decrease the amounts per acre provided for in Subsections
239     (2)(j)(i)(A) through (C) by the average annual change in the Consumer Price Index for all urban
240     consumers published by the Department of Labor.
241          (B) For fiscal years beginning on or after fiscal year 2001-02, the Division of Finance
242     shall increase or decrease the amount described in Subsection (2)(j)(i)(D)(I) by the average
243     annual change in the Consumer Price Index for all urban consumers published by the
244     Department of Labor.

245          (iv) Residences for purposes of Subsection (2)(j)(i)(D)(II) are residences that are:
246          (A) owned by:
247          (I) the Division of Parks and Recreation; or
248          (II) the Division of Wildlife Resources;
249          (B) located on lands that are owned by:
250          (I) the Division of Parks and Recreation; or
251          (II) the Division of Wildlife Resources; and
252          (C) are not subject to taxation under:
253          (I) Chapter 2, Property Tax Act; or
254          (II) Chapter 4, Privilege Tax.
255          (k) The Legislature shall annually appropriate to the Permanent Community Impact
256     Fund all deposits remaining in the Mineral Lease Account after making the appropriations
257     provided for in Subsections (2)(d) through (j).
258          (3) (a) Each agency, board, institution of higher education, and political subdivision
259     receiving money under this chapter shall provide the Legislature, through the Office of the
260     Legislative Fiscal Analyst, with a complete accounting of the use of that money on an annual
261     basis.
262          (b) The accounting required under Subsection (3)(a) shall:
263          (i) include actual expenditures for the prior fiscal year, budgeted expenditures for the
264     current fiscal year, and planned expenditures for the following fiscal year; and
265          (ii) be reviewed by the Business, Economic Development, and Labor Appropriations
266     Subcommittee as part of its normal budgetary process under Title 63J, Chapter 1, Budgetary
267     Procedures Act.
268          Section 3. Effective date.
269          This bill takes effect on July 1, 2018.






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