Chief Sponsor: Ronald M. Winterton

House Sponsor: Francis D. Gibson


8     General Description:
9          This bill modifies provisions related to the expenditure of federal mineral lease
10     revenues.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     addresses the legislative intent and purpose of the Community Impact Fund Act;
15          ▸     allows the Permanent Community Impact Fund Board to make a grant or loan
16     regardless of whether the project results in more than one impact or outcome;
17          ▸     makes the provisions of this bill retroactive; and
18          ▸     makes technical and conforming changes.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          This bill provides revisor instructions.
23     Utah Code Sections Affected:
24     AMENDS:
25          17B-1-612, as last amended by Laws of Utah 2019, Chapter 37
26          17D-1-201, as last amended by Laws of Utah 2020, Chapter 354
27          35A-8-301, as renumbered and amended by Laws of Utah 2012, Chapter 212
28          35A-8-302, as last amended by Laws of Utah 2019, Chapter 501

29          35A-8-305, as last amended by Laws of Utah 2019, Chapter 89
30          35A-8-307, as last amended by Laws of Utah 2014, Chapter 371
31          59-21-1, as last amended by Laws of Utah 2018, Chapter 28
32     ENACTS:
33          35A-8-310, Utah Code Annotated 1953
34     Utah Code Sections Affected by Revisor Instructions:
35          35A-8-310, Utah Code Annotated 1953

37     Be it enacted by the Legislature of the state of Utah:
38          Section 1. Section 17B-1-612 is amended to read:
39          17B-1-612. Accumulated fund balances -- Limitations -- Excess balances --
40     Unanticipated excess of revenues -- Reserves for capital projects.
41          (1) (a) A local district may accumulate retained earnings or fund balances, as
42     appropriate, in any fund.
43          (b) For the general fund only, a local district may only use an accumulated fund
44     balance to:
45          (i) provide working capital to finance expenditures from the beginning of the budget
46     year until general property taxes or other applicable revenues are collected, subject to
47     Subsection (1)(c);
48          (ii) provide a resource to meet emergency expenditures under Section 17B-1-623; and
49          (iii) cover a pending year-end excess of expenditures over revenues from an
50     unavoidable shortfall in revenues, subject to Subsection (1)(d).
51          (c) Subsection (1)(b)(i) does not authorize a local district to appropriate a fund balance
52     for budgeting purposes, except as provided in Subsection (4).
53          (d) Subsection (1)(b)(iii) does not authorize a local district to appropriate a fund
54     balance to avoid an operating deficit during a budget year except:
55          (i) as provided under Subsection (4); or

56          (ii) for emergency purposes under Section 17B-1-623.
57          (2) (a) Except as provided in Subsection (2)(b), the accumulation of a fund balance in
58     the general fund may not exceed the most recently adopted general fund budget, plus 100% of
59     the current year's property tax.
60          (b) Notwithstanding Subsection (2)(a), a local district may accumulate in the general
61     fund mineral lease revenue that the local district receives from the United States under the
62     Mineral Lands Leasing Act, 30 U.S.C. Sec. 181 et seq., through a distribution under:
63          (i) Title 35A, Chapter 8, Part 3, Community Impact [Alleviation] Fund Act; or
64          (ii) Title 59, Chapter 21, Mineral Lease Funds.
65          (3) If the fund balance at the close of any fiscal year exceeds the amount permitted
66     under Subsection (2), the district shall appropriate the excess in accordance with Section
67     17B-1-613.
68          (4) A local district may utilize any fund balance in excess of 5% of the total revenues
69     of the general fund for budget purposes.
70          (5) (a) Within a capital projects fund, the board of trustees may, in any budget year,
71     appropriate from estimated revenue or fund balance to a reserve for capital projects for the
72     purpose of financing future specific capital projects, including new construction, capital
73     repairs, replacement, and maintenance, under a formal long-range capital plan that the board of
74     trustees adopts.
75          (b) A local district may allow a reserve amount under Subsection (5)(a) to accumulate
76     from year to year until the accumulated total is sufficient to permit economical expenditure for
77     the specified purposes.
78          (c) A local district may disburse from a reserve account under Subsection (5)(a) only
79     by a budget appropriation that the local district adopts in accordance with this part.
80          (d) A local district shall ensure that the expenditures from the appropriation budget
81     accounts described in this Subsection (5) conform to all requirements of this part relating to
82     execution and control of budgets.

83          Section 2. Section 17D-1-201 is amended to read:
84          17D-1-201. Services that a special service district may be created to provide.
85          As provided in this part, a county or municipality may create a special service district to
86     provide any combination of the following services:
87          (1) water;
88          (2) sewerage;
89          (3) drainage;
90          (4) flood control;
91          (5) garbage collection and disposal;
92          (6) health care;
93          (7) transportation, including the receipt of federal secure rural school funds under
94     Section 51-9-603 for the purposes of constructing, improving, repairing, or maintaining public
95     roads;
96          (8) recreation;
97          (9) fire protection, including:
98          (a) emergency medical services, ambulance services, and search and rescue services, if
99     fire protection service is also provided;
100          (b) Firewise Communities programs and the development of community wildfire
101     protection plans; and
102          (c) the receipt of federal secure rural school funds as provided under Section 51-9-603
103     for the purposes of carrying out Firewise Communities programs, developing community
104     wildfire protection plans, and performing emergency services, including firefighting on federal
105     land and other services authorized under this Subsection (9);
106          (10) providing, operating, and maintaining correctional and rehabilitative facilities and
107     programs for municipal, state, and other detainees and prisoners;
108          (11) street lighting;
109          (12) consolidated 911 and emergency dispatch;

110          (13) animal shelter and control;
111          (14) receiving federal mineral lease funds under Title 59, Chapter 21, Mineral Lease
112     Funds, and expending those funds to [provide construction and maintenance of public
113     facilities, traditional governmental services, and planning, as a means for mitigating impacts
114     from extractive mineral industries] be used in accordance with state and federal law;
115          (15) in a county of the first class, extended police protection;
116          (16) control or abatement of earth movement or a landslide;
117          (17) an energy efficiency upgrade, a renewable energy system, or electric vehicle
118     charging infrastructure as defined in Section 11-42a-102, in accordance with Title 11, Chapter
119     42a, Commercial Property Assessed Clean Energy Act; or
120          (18) cemetery.
121          Section 3. Section 35A-8-301 is amended to read:
Part 3. Community Impact Fund Act

123          35A-8-301. Legislative intent -- Purpose and policy.
124          (1) It is the intent of the Legislature to make available funds received by the state from
125     federal mineral lease revenues under Section 59-21-2, bonus payments on federal oil shale
126     lease tracts U-A and U-B, and all other bonus payments on federal mineral leases to be used for
127     [the alleviation of social, economic, and public finance impacts resulting from the development
128     of natural resources in this state] planning, construction and maintenance of public facilities,
129     and provision of public service, subject to the limitations provided for in Section 35 of the
130     Mineral Leasing Act of 1920 (41 Stat. 450, 30 U.S.C. Sec. 191).
131          (2) To the extent allowed under the Mineral Leasing Act, any ambiguity as to whether
132     a particular use of the lease revenue and bonus payments described in Subsection (1) is a
133     permissible use under this part shall be resolved in favor of upholding the use.
134          [(2)] (3) The purpose of this part is to maximize the long term benefit of funds derived
135     from these lease revenues and bonus payments by fostering funding mechanisms which will,
136     consistent with sound financial practices, result in the greatest use of financial resources for the

137     greatest number of citizens of this state, with priority given to those communities designated as
138     impacted by the development of natural resources covered by the Mineral Leasing Act.
139          [(3)] (4) The policy of this state is to promote cooperation and coordination between
140     the state and [its] the state's agencies and political subdivisions with individuals, firms, and
141     business organizations engaged in the development of the natural resources of this state. [The
142     purpose of such efforts include private sector participation, financial and otherwise, in the
143     alleviation of impacts associated with resources development activities.]
144          Section 4. Section 35A-8-302 is amended to read:
145          35A-8-302. Definitions.
146          As used in this part:
147          (1) "Bonus payments" means that portion of the bonus payments received by the
148     United States government under the Leasing Act paid to the state under Section 35 of the
149     Leasing Act, 30 U.S.C. Sec. 191, together with any interest that had accrued on those
150     payments.
151          (2) "Impact board" means the Permanent Community Impact Fund Board created under
152     Section 35A-8-304.
153          (3) "Impact fund" means the Permanent Community Impact Fund established by this
154     chapter.
155          (4) "Interlocal agency" means a legal or administrative entity created by a subdivision
156     or combination of subdivisions under the authority of Title 11, Chapter 13, Interlocal
157     Cooperation Act.
158          (5) "Leasing Act" means the Mineral Lands Leasing Act of 1920, 30 U.S.C. Sec. 181 et
159     seq.
160          (6) "Qualifying sales and use tax distribution reduction" means that, for the calendar
161     year beginning on January 1, 2008, the total sales and use tax distributions a city received
162     under Section 59-12-205 were reduced by at least 15% from the total sales and use tax
163     distributions the city received under Section 59-12-205 for the calendar year beginning on

164     January 1, 2007.
165          (7) (a) "Planning" means any of the following performed by or on behalf of the state, a
166     subdivision, or an interlocal entity:
167          (i) a study, analysis, plan, or survey; or
168          (ii) activities necessary to obtain a permit or land use approval, including review to
169     determine the need, cost, or feasibility of obtaining a permit or land use approval.
170          (b) "Planning" includes:
171          (i) the preparation of maps and guidelines;
172          (ii) land use planning;
173          (iii) a study or analysis of:
174          (A) the social or economic impacts associated with natural resource development;
175          (B) the demand for the transportation of individuals or goods;
176          (C) state, regional, and local development and growth;
177          (D) population and employment;
178          (E) development related to natural resources; and
179          (F) as related to any other activity described in this Subsection (7), engineering,
180     financial analysis, legal analysis, or any other analysis helpful to the state, subdivision, or
181     interlocal agency; and
182          (iv) any activity described in this Subsection (7) regardless of whether the activity is
183     for a public facility or a public service.
184          (8) "Public facility" means a facility:
185          (a) in whole or in part, owned, controlled, or operated by the state, a subdivision, or an
186     interlocal agency; and
187          (b) that serves a public purpose.
188          (9) (a) "Public service" means a service that:
189          (i) is provided, in whole or in part, by or on behalf of the state, a subdivision, or an
190     interlocal agency; and

191          (ii) serves a public purpose.
192          (b) "Public service" includes:
193          (i) a service described in Subsection (9)(a) regardless of whether the service is
194     provided in connection with a public facility;
195          (ii) the cost of providing a service described in Subsection (9)(a), including
196     administrative costs, wages, and legal fees; and
197          (iii) a contract with a public postsecondary institution to fund research, education, or a
198     public service program.
199          [(7)] (10) "Subdivision" means a county, city, town, county service area, special
200     service district, special improvement district, water conservancy district, water improvement
201     district, sewer improvement district, housing authority, building authority, school district, or
202     public postsecondary institution organized under the laws of this state.
203          [(8)] (11) (a) "Throughput infrastructure project" means the following facilities,
204     whether located within, partially within, or outside of the state:
205          (i) a bulk commodities ocean terminal;
206          (ii) a pipeline for the transportation of liquid or gaseous hydrocarbons;
207          (iii) electric transmission lines and ancillary facilities;
208          (iv) a shortline freight railroad and ancillary facilities;
209          (v) a plant or facility for storing, distributing, or producing hydrogen, including the
210     liquification of hydrogen, for use as a fuel in zero emission motor vehicles, for electricity
211     generation, or for industrial use; or
212          (vi) a plant for the production of zero emission hydrogen fueled trucks.
213          (b) "Throughput infrastructure project" includes:
214          (i) an ownership interest or a joint or undivided ownership interest in a facility;
215          (ii) a membership interest in the owner of a facility; or
216          (iii) a contractual right, whether secured or unsecured, to use all or a portion of the
217     throughput, transportation, or transmission capacity of a facility.

218          Section 5. Section 35A-8-305 is amended to read:
219          35A-8-305. Duties -- Loans -- Interest.
220          (1) The impact board shall:
221          (a) make grants and loans from the amounts appropriated by the Legislature out of the
222     impact fund to state agencies, subdivisions, and interlocal agencies that are or may be socially
223     or economically impacted, directly or indirectly, by mineral resource development for:
224          (i) planning;
225          (ii) construction and maintenance of public facilities; and
226          (iii) provision of public services;
227          (b) establish the criteria by which the loans and grants will be made;
228          (c) determine the order in which projects will be funded;
229          (d) in conjunction with other agencies of the state, subdivisions, or interlocal agencies,
230     conduct studies, investigations, and research into the effects of proposed mineral resource
231     development projects upon local communities;
232          (e) sue and be sued in accordance with applicable law;
233          (f) qualify for, accept, and administer grants, gifts, loans, or other funds from:
234          (i) the federal government; and
235          (ii) other sources, public or private; and
236          (g) perform other duties assigned to it under Sections 11-13-306 and 11-13-307.
237          (2) Money, including all loan repayments and interest, in the impact fund derived from
238     bonus payments may be used for any of the purposes set forth in Subsection (1)(a) but may
239     only be given in the form of interest bearing loans to be paid back into the impact fund by the
240     agency, subdivision, or interlocal agency.
241          [(3) (a) "Provision of public services" under Subsection (1)(a) includes contracts with
242     public postsecondary institutions to fund research, education, or public service programs that
243     benefit impacted counties or political subdivisions of the counties.]
244          [(b) Each contract under Subsection (3)(a) shall be:]

245          [(i) based on an application to the impact board from the impacted county; and]
246          [(ii) approved by the county legislative body.]
247          [(c) For purposes of this section, a land use plan is a public service program.]
248          (3) The impact board may make a grant or loan under Subsection (1) regardless of
249     whether the activity results in more than one impact or outcome, including an increase in
250     natural resource development or an increase in economic development.
251          (4) If the public service described in Subsection (1)(a) is a contract with a public
252     postsecondary institution described in Subsection 35A-3-302(9)(b)(iii), the contract shall be:
253          (a) based on an application to the impact board from the impacted county; and
254          (b) approved by the county legislative body.
255          Section 6. Section 35A-8-307 is amended to read:
256          35A-8-307. Impact fund administered by impact board -- Eligibility for
257     assistance -- Review by board -- Administration costs -- Annual report.
258          (1) (a) The impact board shall:
259          (i) administer the impact fund in a manner that will keep a portion of the impact fund
260     revolving;
261          (ii) determine provisions for repayment of loans;
262          (iii) establish criteria for determining eligibility for assistance under this part; and
263          (iv) consider recommendations from the School and Institutional Trust Lands
264     Administration when awarding a grant described in Subsection 35A-8-303(6).
265          (b) (i) The criteria for awarding loans or grants made from funds described in
266     Subsection 35A-8-303(5) shall be consistent with the requirements of Subsection
267     35A-8-303(5).
268          (ii) The criteria for awarding grants made from funds described in Subsection
269     35A-8-303(2)(c) shall be consistent with the requirements of Subsection 35A-8-303(6).
270          (c) In order to receive assistance under this part, subdivisions and interlocal agencies
271     shall submit formal applications containing the information that the impact board requires.

272          (2) In determining eligibility for loans and grants under this part, the impact board shall
273     consider the following:
274          (a) the subdivision's or interlocal agency's current mineral lease production;
275          (b) the feasibility of the actual development or the increased development of a resource
276     that may impact the subdivision or interlocal agency directly or indirectly;
277          (c) current taxes being paid by the subdivision's or interlocal agency's residents;
278          (d) the borrowing capacity of the subdivision or interlocal agency, including:
279          (i) [its] the subdivision's or interlocal agency's ability and willingness to sell bonds or
280     other securities in the open market; and
281          (ii) [its] the subdivision's or interlocal agency's current and authorized indebtedness;
282          (e) all possible additional sources of state and local revenue, including utility user
283     charges;
284          (f) the availability of federal assistance funds;
285          (g) probable growth of population due to actual or prospective natural resource
286     development in an area;
287          (h) existing public facilities and services;
288          (i) the extent of the expected direct or indirect impact upon public facilities and public
289     services of the actual or prospective natural resource development in an area; and
290          (j) the extent of industry participation in an impact alleviation plan, either as specified
291     in Title 63M, Chapter 5, Resource Development Act, or otherwise.
292          (3) The impact board may not fund an education project that could otherwise have
293     reasonably been funded by a school district through a program of annual budgeting, capital
294     budgeting, bonded indebtedness, or special assessments.
295          (4) The impact board may restructure all or part of the agency's or subdivision's
296     liability to repay loans for extenuating circumstances.
297          (5) The impact board shall:
298          (a) review the proposed uses of the impact fund for loans or grants before approving

299     them and may condition its approval on whatever assurances the impact board considers
300     necessary to ensure that proceeds of the loan or grant will be used in accordance with the
301     Leasing Act and this part; and
302          (b) ensure that each loan specifies the terms for repayment and is evidenced by general
303     obligation, special assessment, or revenue bonds, notes, or other obligations of the appropriate
304     subdivision or interlocal agency issued to the impact board under whatever authority for the
305     issuance of those bonds, notes, or obligations exists at the time of the loan.
306          (6) The impact board shall allocate from the impact fund to the department those funds
307     that are appropriated by the Legislature for the administration of the impact fund, but this
308     amount may not exceed 2% of the annual receipts to the impact fund.
309          (7) The department shall include in the annual written report described in Section
310     35A-1-109, the number and type of loans and grants made as well as a list of subdivisions and
311     interlocal agencies that received this assistance.
312          Section 7. Section 35A-8-310 is enacted to read:
313          35A-8-310. Application -- Retroactivity.
314          (1) The provisions of this bill apply to any claim for which a court of competent
315     jurisdiction has not issued a final unappealable judgment or order.
316          (2) The Legislature finds that the provisions of this bill:
317          (a) do not enlarge, eliminate, or destroy vested rights; and
318          (b) clarify legislative intent.
319          Section 8. Section 59-21-1 is amended to read:
320          59-21-1. Disposition of federal mineral lease money -- Priority to political
321     subdivisions impacted by mineral development -- Disposition of mineral bonus payments
322     -- Appropriation of money attributable to royalties from extraction of minerals on federal
323     land located within boundaries of Grand Staircase-Escalante National Monument.
324          (1) Except as provided in Subsections (2) through (4), all money received from the
325     United States under the provisions of the Mineral Lands Leasing Act, 30 U.S.C. Sec. 181 et

326     seq., shall:
327          (a) be deposited in the Mineral Lease Account of the General Fund; and
328          (b) be appropriated by the Legislature giving priority to those subdivisions of the state
329     socially or economically impacted by development of minerals leased under the Mineral Lands
330     Leasing Act, for:
331          (i) planning;
332          (ii) construction and maintenance of public facilities; and
333          (iii) provision of public services.
334          (2) Seventy percent of money received from federal mineral lease bonus payments
335     shall be deposited into the Permanent Community Impact Fund and shall be used as provided
336     in Title 35A, Chapter 8, Part 3, Community Impact [Alleviation] Fund Act.
337          (3) Thirty percent of money received from federal mineral lease bonus payments shall
338     be deposited in the Mineral Bonus Account created by Subsection 59-21-2(1) and appropriated
339     as provided in that subsection.
340          (4) (a) For purposes of this Subsection (4):
341          (i) the "boundaries of the Grand Staircase-Escalante National Monument" means the
342     boundaries:
343          (A) established by Presidential Proclamation No. 6920, 61 Fed. Reg. 50,223 (1996);
344     and
345          (B) modified by:
346          (I) Pub. L. No. 105-335, 112 Stat. 3139; and
347          (II) Pub. L. No. 105-355, 112 Stat. 3247; and
348          (ii) a special service district, school district, or federal land is considered to be located
349     within the boundaries of the Grand Staircase-Escalante National Monument if a portion of the
350     special service district, school district, or federal land is located within the boundaries
351     described in Subsection (4)(a)(i).
352          (b) Beginning on July 1, 1999, the Legislature shall appropriate, as provided in

353     Subsections (4)(c) through (g), money received from the United States that is attributable to
354     royalties from the extraction of minerals on federal land that, on September 18, 1996, was
355     located within the boundaries of the Grand Staircase-Escalante National Monument.
356          (c) The Legislature shall annually appropriate 40% of the money described in
357     Subsection (4)(b) to the Division of Finance to be distributed by the Division of Finance to
358     special service districts that are:
359          (i) established by counties under Title 17D, Chapter 1, Special Service District Act;
360          (ii) socially or economically impacted by the development of minerals under the
361     Mineral Lands Leasing Act; and
362          (iii) located within the boundaries of the Grand Staircase-Escalante National
363     Monument.
364          (d) The Division of Finance shall distribute the money described in Subsection (4)(c)
365     in amounts proportionate to the amount of federal mineral lease money generated by the county
366     in which a special service district is located.
367          (e) The Legislature shall annually appropriate 40% of the money described in
368     Subsection (4)(b) to the State Board of Education to be distributed equally to school districts
369     that are:
370          (i) socially or economically impacted by the development of minerals under the
371     Mineral Lands Leasing Act; and
372          (ii) located within the boundaries of the Grand Staircase-Escalante National
373     Monument.
374          (f) The Legislature shall annually appropriate 2.25% of the money described in
375     Subsection (4)(b) to the Utah Geological Survey to facilitate the development of energy and
376     mineral resources in counties that are:
377          (i) socially or economically impacted by the development of minerals under the
378     Mineral Lands Leasing Act; and
379          (ii) located within the boundaries of the Grand Staircase-Escalante National

380     Monument.
381          (g) Seventeen and three-fourths percent of the money described in Subsection (4)(b)
382     shall be deposited annually into the State School Fund established by Utah Constitution Article
383     X, Section 5.
384          Section 9. Revisor instructions.
385          The Legislature intends that the Office of Legislative Research and General Counsel, in
386     preparing the Utah Code database for publication, replace the phrase "this bill" in Subsections
387     35A-8-310(1) and (2) with this bill's designated chapter number in the Laws of Utah.