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7 LONG TITLE
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; and
17 ▸ makes technical and conforming changes.
18 Money Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 This bill provides retrospective operation.
22 Utah Code Sections Affected:
23 AMENDS:
24 17B-1-612, as last amended by Laws of Utah 2019, Chapter 37
25 17D-1-201, as last amended by Laws of Utah 2020, Chapter 354
26 35A-8-301, as renumbered and amended by Laws of Utah 2012, Chapter 212
27 35A-8-302, as last amended by Laws of Utah 2019, Chapter 501
28 35A-8-305, as last amended by Laws of Utah 2019, Chapter 89
29 35A-8-307, as last amended by Laws of Utah 2014, Chapter 371
30 59-21-1, as last amended by Laws of Utah 2018, Chapter 28
31
32 Be it enacted by the Legislature of the state of Utah:
33 Section 1. Section 17B-1-612 is amended to read:
34 17B-1-612. Accumulated fund balances -- Limitations -- Excess balances --
35 Unanticipated excess of revenues -- Reserves for capital projects.
36 (1) (a) A local district may accumulate retained earnings or fund balances, as
37 appropriate, in any fund.
38 (b) For the general fund only, a local district may only use an accumulated fund
39 balance to:
40 (i) provide working capital to finance expenditures from the beginning of the budget
41 year until general property taxes or other applicable revenues are collected, subject to
42 Subsection (1)(c);
43 (ii) provide a resource to meet emergency expenditures under Section 17B-1-623; and
44 (iii) cover a pending year-end excess of expenditures over revenues from an
45 unavoidable shortfall in revenues, subject to Subsection (1)(d).
46 (c) Subsection (1)(b)(i) does not authorize a local district to appropriate a fund balance
47 for budgeting purposes, except as provided in Subsection (4).
48 (d) Subsection (1)(b)(iii) does not authorize a local district to appropriate a fund
49 balance to avoid an operating deficit during a budget year except:
50 (i) as provided under Subsection (4); or
51 (ii) for emergency purposes under Section 17B-1-623.
52 (2) (a) Except as provided in Subsection (2)(b), the accumulation of a fund balance in
53 the general fund may not exceed the most recently adopted general fund budget, plus 100% of
54 the current year's property tax.
55 (b) Notwithstanding Subsection (2)(a), a local district may accumulate in the general
56 fund mineral lease revenue that the local district receives from the United States under the
57 Mineral Lands Leasing Act, 30 U.S.C. Sec. 181 et seq., through a distribution under:
58 (i) Title 35A, Chapter 8, Part 3, Community Impact [
59 (ii) Title 59, Chapter 21, Mineral Lease Funds.
60 (3) If the fund balance at the close of any fiscal year exceeds the amount permitted
61 under Subsection (2), the district shall appropriate the excess in accordance with Section
62 17B-1-613.
63 (4) A local district may utilize any fund balance in excess of 5% of the total revenues
64 of the general fund for budget purposes.
65 (5) (a) Within a capital projects fund, the board of trustees may, in any budget year,
66 appropriate from estimated revenue or fund balance to a reserve for capital projects for the
67 purpose of financing future specific capital projects, including new construction, capital
68 repairs, replacement, and maintenance, under a formal long-range capital plan that the board of
69 trustees adopts.
70 (b) A local district may allow a reserve amount under Subsection (5)(a) to accumulate
71 from year to year until the accumulated total is sufficient to permit economical expenditure for
72 the specified purposes.
73 (c) A local district may disburse from a reserve account under Subsection (5)(a) only
74 by a budget appropriation that the local district adopts in accordance with this part.
75 (d) A local district shall ensure that the expenditures from the appropriation budget
76 accounts described in this Subsection (5) conform to all requirements of this part relating to
77 execution and control of budgets.
78 Section 2. Section 17D-1-201 is amended to read:
79 17D-1-201. Services that a special service district may be created to provide.
80 As provided in this part, a county or municipality may create a special service district to
81 provide any combination of the following services:
82 (1) water;
83 (2) sewerage;
84 (3) drainage;
85 (4) flood control;
86 (5) garbage collection and disposal;
87 (6) health care;
88 (7) transportation, including the receipt of federal secure rural school funds under
89 Section 51-9-603 for the purposes of constructing, improving, repairing, or maintaining public
90 roads;
91 (8) recreation;
92 (9) fire protection, including:
93 (a) emergency medical services, ambulance services, and search and rescue services, if
94 fire protection service is also provided;
95 (b) Firewise Communities programs and the development of community wildfire
96 protection plans; and
97 (c) the receipt of federal secure rural school funds as provided under Section 51-9-603
98 for the purposes of carrying out Firewise Communities programs, developing community
99 wildfire protection plans, and performing emergency services, including firefighting on federal
100 land and other services authorized under this Subsection (9);
101 (10) providing, operating, and maintaining correctional and rehabilitative facilities and
102 programs for municipal, state, and other detainees and prisoners;
103 (11) street lighting;
104 (12) consolidated 911 and emergency dispatch;
105 (13) animal shelter and control;
106 (14) receiving federal mineral lease funds under Title 59, Chapter 21, Mineral Lease
107 Funds, and expending those funds to [
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110 (15) in a county of the first class, extended police protection;
111 (16) control or abatement of earth movement or a landslide;
112 (17) an energy efficiency upgrade, a renewable energy system, or electric vehicle
113 charging infrastructure as defined in Section 11-42a-102, in accordance with Title 11, Chapter
114 42a, Commercial Property Assessed Clean Energy Act; or
115 (18) cemetery.
116 Section 3. Section 35A-8-301 is amended to read:
117
118 35A-8-301. Legislative intent -- Purpose and policy.
119 (1) It is the intent of the Legislature to make available funds received by the state from
120 federal mineral lease revenues under Section 59-21-2, bonus payments on federal oil shale
121 lease tracts U-A and U-B, and all other bonus payments on federal mineral leases to be used for
122 [
123
124 and provision of public service, subject to the limitations provided for in Section 35 of the
125 Mineral Leasing Act of 1920 (41 Stat. 450, 30 U.S.C. Sec. 191).
126 (2) To the extent allowed under the Mineral Leasing Act, any ambiguity as to whether
127 a particular use of the lease revenue and bonus payments described in Subsection (1) is a
128 permissible use under this part shall be resolved in favor of upholding the use.
129 [
130 from these lease revenues and bonus payments by fostering funding mechanisms which will,
131 consistent with sound financial practices, result in the greatest use of financial resources for the
132 greatest number of citizens of this state, with priority given to those communities designated as
133 impacted by the development of natural resources covered by the Mineral Leasing Act.
134 [
135 the state and [
136 business organizations engaged in the development of the natural resources of this state. [
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139 Section 4. Section 35A-8-302 is amended to read:
140 35A-8-302. Definitions.
141 As used in this part:
142 (1) "Bonus payments" means that portion of the bonus payments received by the
143 United States government under the Leasing Act paid to the state under Section 35 of the
144 Leasing Act, 30 U.S.C. Sec. 191, together with any interest that had accrued on those
145 payments.
146 (2) "Impact board" means the Permanent Community Impact Fund Board created under
147 Section 35A-8-304.
148 (3) "Impact fund" means the Permanent Community Impact Fund established by this
149 chapter.
150 (4) "Interlocal agency" means a legal or administrative entity created by a subdivision
151 or combination of subdivisions under the authority of Title 11, Chapter 13, Interlocal
152 Cooperation Act.
153 (5) "Leasing Act" means the Mineral Lands Leasing Act of 1920, 30 U.S.C. Sec. 181 et
154 seq.
155 (6) "Qualifying sales and use tax distribution reduction" means that, for the calendar
156 year beginning on January 1, 2008, the total sales and use tax distributions a city received
157 under Section 59-12-205 were reduced by at least 15% from the total sales and use tax
158 distributions the city received under Section 59-12-205 for the calendar year beginning on
159 January 1, 2007.
160 (7) (a) "Planning" means any of the following performed by or on behalf of the state, a
161 subdivision, or an interlocal entity:
162 (i) a study, analysis, plan, or survey; or
163 (ii) activities necessary to obtain a permit or land use approval, including review to
164 determine the need, cost, or feasibility of obtaining a permit or land use approval.
165 (b) "Planning" includes:
166 (i) the preparation of maps and guidelines;
167 (ii) land use planning;
168 (iii) a study or analysis of:
169 (A) the social or economic impacts associated with natural resource development;
170 (B) the demand for the transportation of individuals or goods;
171 (C) state, regional, and local development and growth;
172 (D) population and employment;
173 (E) development related to natural resources; and
174 (F) as related to any other activity described in this Subsection (7), engineering,
175 financial analysis, legal analysis, or any other analysis helpful to the state, subdivision, or
176 interlocal agency; and
177 (iv) any activity described in this Subsection (7) regardless of whether the activity is
178 for a public facility or a public service.
179 (8) "Public facility" means a facility:
180 (a) in whole or in part, owned, controlled, or operated by the state, a subdivision, or an
181 interlocal agency; and
182 (b) that serves a public purpose.
183 (9) (a) "Public service" means a service that:
184 (i) is provided, in whole or in part, by or on behalf of the state, a subdivision, or an
185 interlocal agency; and
186 (ii) serves a public purpose.
187 (b) "Public service" includes:
188 (i) a service described in Subsection (9)(a) regardless of whether the service is
189 provided in connection with a public facility;
190 (ii) the cost of providing a service described in Subsection (9)(a), including
191 administrative costs, wages, and legal fees; and
192 (iii) a contract with a public postsecondary institution to fund research, education, or a
193 public service program.
194 [
195 service district, special improvement district, water conservancy district, water improvement
196 district, sewer improvement district, housing authority, building authority, school district, or
197 public postsecondary institution organized under the laws of this state.
198 [
199 whether located within, partially within, or outside of the state:
200 (i) a bulk commodities ocean terminal;
201 (ii) a pipeline for the transportation of liquid or gaseous hydrocarbons;
202 (iii) electric transmission lines and ancillary facilities;
203 (iv) a shortline freight railroad and ancillary facilities;
204 (v) a plant or facility for storing, distributing, or producing hydrogen, including the
205 liquification of hydrogen, for use as a fuel in zero emission motor vehicles, for electricity
206 generation, or for industrial use; or
207 (vi) a plant for the production of zero emission hydrogen fueled trucks.
208 (b) "Throughput infrastructure project" includes:
209 (i) an ownership interest or a joint or undivided ownership interest in a facility;
210 (ii) a membership interest in the owner of a facility; or
211 (iii) a contractual right, whether secured or unsecured, to use all or a portion of the
212 throughput, transportation, or transmission capacity of a facility.
213 Section 5. Section 35A-8-305 is amended to read:
214 35A-8-305. Duties -- Loans -- Interest.
215 (1) The impact board shall:
216 (a) make grants and loans from the amounts appropriated by the Legislature out of the
217 impact fund to state agencies, subdivisions, and interlocal agencies that are or may be socially
218 or economically impacted, directly or indirectly, by mineral resource development for:
219 (i) planning;
220 (ii) construction and maintenance of public facilities; and
221 (iii) provision of public services;
222 (b) establish the criteria by which the loans and grants will be made;
223 (c) determine the order in which projects will be funded;
224 (d) in conjunction with other agencies of the state, subdivisions, or interlocal agencies,
225 conduct studies, investigations, and research into the effects of proposed mineral resource
226 development projects upon local communities;
227 (e) sue and be sued in accordance with applicable law;
228 (f) qualify for, accept, and administer grants, gifts, loans, or other funds from:
229 (i) the federal government; and
230 (ii) other sources, public or private; and
231 (g) perform other duties assigned to it under Sections 11-13-306 and 11-13-307.
232 (2) Money, including all loan repayments and interest, in the impact fund derived from
233 bonus payments may be used for any of the purposes set forth in Subsection (1)(a) but may
234 only be given in the form of interest bearing loans to be paid back into the impact fund by the
235 agency, subdivision, or interlocal agency.
236 [
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239 [
240 [
241 [
242 [
243 (3) The impact board may make a grant or loan under Subsection (1) regardless of
244 whether the activity results in more than one impact or outcome, including an increase in
245 natural resource development or an increase in economic development.
246 (4) If the public service described in Subsection (1)(a) is a contract with a public
247 postsecondary institution described in Subsection 35A-3-302(9)(b)(iii), the contract shall be:
248 (a) based on an application to the impact board from the impacted county; and
249 (b) approved by the county legislative body.
250 Section 6. Section 35A-8-307 is amended to read:
251 35A-8-307. Impact fund administered by impact board -- Eligibility for
252 assistance -- Review by board -- Administration costs -- Annual report.
253 (1) (a) The impact board shall:
254 (i) administer the impact fund in a manner that will keep a portion of the impact fund
255 revolving;
256 (ii) determine provisions for repayment of loans;
257 (iii) establish criteria for determining eligibility for assistance under this part; and
258 (iv) consider recommendations from the School and Institutional Trust Lands
259 Administration when awarding a grant described in Subsection 35A-8-303(6).
260 (b) (i) The criteria for awarding loans or grants made from funds described in
261 Subsection 35A-8-303(5) shall be consistent with the requirements of Subsection
262 35A-8-303(5).
263 (ii) The criteria for awarding grants made from funds described in Subsection
264 35A-8-303(2)(c) shall be consistent with the requirements of Subsection 35A-8-303(6).
265 (c) In order to receive assistance under this part, subdivisions and interlocal agencies
266 shall submit formal applications containing the information that the impact board requires.
267 (2) In determining eligibility for loans and grants under this part, the impact board shall
268 consider the following:
269 (a) the subdivision's or interlocal agency's current mineral lease production;
270 (b) the feasibility of the actual development or the increased development of a resource
271 that may impact the subdivision or interlocal agency directly or indirectly;
272 (c) current taxes being paid by the subdivision's or interlocal agency's residents;
273 (d) the borrowing capacity of the subdivision or interlocal agency, including:
274 (i) [
275 open market; and
276 (ii) [
277 (e) all possible additional sources of state and local revenue, including utility user
278 charges;
279 (f) the availability of federal assistance funds;
280 (g) probable growth of population due to actual or prospective natural resource
281 development in an area;
282 (h) existing public facilities and services;
283 (i) the extent of the expected direct or indirect impact upon public facilities and public
284 services of the actual or prospective natural resource development in an area; and
285 (j) the extent of industry participation in an impact alleviation plan, either as specified
286 in Title 63M, Chapter 5, Resource Development Act, or otherwise.
287 (3) The impact board may not fund an education project that could otherwise have
288 reasonably been funded by a school district through a program of annual budgeting, capital
289 budgeting, bonded indebtedness, or special assessments.
290 (4) The impact board may restructure all or part of the agency's or subdivision's
291 liability to repay loans for extenuating circumstances.
292 (5) The impact board shall:
293 (a) review the proposed uses of the impact fund for loans or grants before approving
294 them and may condition its approval on whatever assurances the impact board considers
295 necessary to ensure that proceeds of the loan or grant will be used in accordance with the
296 Leasing Act and this part; and
297 (b) ensure that each loan specifies the terms for repayment and is evidenced by general
298 obligation, special assessment, or revenue bonds, notes, or other obligations of the appropriate
299 subdivision or interlocal agency issued to the impact board under whatever authority for the
300 issuance of those bonds, notes, or obligations exists at the time of the loan.
301 (6) The impact board shall allocate from the impact fund to the department those funds
302 that are appropriated by the Legislature for the administration of the impact fund, but this
303 amount may not exceed 2% of the annual receipts to the impact fund.
304 (7) The department shall include in the annual written report described in Section
305 35A-1-109, the number and type of loans and grants made as well as a list of subdivisions and
306 interlocal agencies that received this assistance.
307 Section 7. Section 59-21-1 is amended to read:
308 59-21-1. Disposition of federal mineral lease money -- Priority to political
309 subdivisions impacted by mineral development -- Disposition of mineral bonus payments
310 -- Appropriation of money attributable to royalties from extraction of minerals on federal
311 land located within boundaries of Grand Staircase-Escalante National Monument.
312 (1) Except as provided in Subsections (2) through (4), all money received from the
313 United States under the provisions of the Mineral Lands Leasing Act, 30 U.S.C. Sec. 181 et
314 seq., shall:
315 (a) be deposited in the Mineral Lease Account of the General Fund; and
316 (b) be appropriated by the Legislature giving priority to those subdivisions of the state
317 socially or economically impacted by development of minerals leased under the Mineral Lands
318 Leasing Act, for:
319 (i) planning;
320 (ii) construction and maintenance of public facilities; and
321 (iii) provision of public services.
322 (2) Seventy percent of money received from federal mineral lease bonus payments
323 shall be deposited into the Permanent Community Impact Fund and shall be used as provided
324 in Title 35A, Chapter 8, Part 3, Community Impact [
325 (3) Thirty percent of money received from federal mineral lease bonus payments shall
326 be deposited in the Mineral Bonus Account created by Subsection 59-21-2(1) and appropriated
327 as provided in that subsection.
328 (4) (a) For purposes of this Subsection (4):
329 (i) the "boundaries of the Grand Staircase-Escalante National Monument" means the
330 boundaries:
331 (A) established by Presidential Proclamation No. 6920, 61 Fed. Reg. 50,223 (1996);
332 and
333 (B) modified by:
334 (I) Pub. L. No. 105-335, 112 Stat. 3139; and
335 (II) Pub. L. No. 105-355, 112 Stat. 3247; and
336 (ii) a special service district, school district, or federal land is considered to be located
337 within the boundaries of the Grand Staircase-Escalante National Monument if a portion of the
338 special service district, school district, or federal land is located within the boundaries
339 described in Subsection (4)(a)(i).
340 (b) Beginning on July 1, 1999, the Legislature shall appropriate, as provided in
341 Subsections (4)(c) through (g), money received from the United States that is attributable to
342 royalties from the extraction of minerals on federal land that, on September 18, 1996, was
343 located within the boundaries of the Grand Staircase-Escalante National Monument.
344 (c) The Legislature shall annually appropriate 40% of the money described in
345 Subsection (4)(b) to the Division of Finance to be distributed by the Division of Finance to
346 special service districts that are:
347 (i) established by counties under Title 17D, Chapter 1, Special Service District Act;
348 (ii) socially or economically impacted by the development of minerals under the
349 Mineral Lands Leasing Act; and
350 (iii) located within the boundaries of the Grand Staircase-Escalante National
351 Monument.
352 (d) The Division of Finance shall distribute the money described in Subsection (4)(c)
353 in amounts proportionate to the amount of federal mineral lease money generated by the county
354 in which a special service district is located.
355 (e) The Legislature shall annually appropriate 40% of the money described in
356 Subsection (4)(b) to the State Board of Education to be distributed equally to school districts
357 that are:
358 (i) socially or economically impacted by the development of minerals under the
359 Mineral Lands Leasing Act; and
360 (ii) located within the boundaries of the Grand Staircase-Escalante National
361 Monument.
362 (f) The Legislature shall annually appropriate 2.25% of the money described in
363 Subsection (4)(b) to the Utah Geological Survey to facilitate the development of energy and
364 mineral resources in counties that are:
365 (i) socially or economically impacted by the development of minerals under the
366 Mineral Lands Leasing Act; and
367 (ii) located within the boundaries of the Grand Staircase-Escalante National
368 Monument.
369 (g) Seventeen and three-fourths percent of the money described in Subsection (4)(b)
370 shall be deposited annually into the State School Fund established by Utah Constitution Article
371 X, Section 5.
372 Section 8. Retrospective operation.
373 (1) The provisions of this bill apply to any claim for which a court of competent
374 jurisdiction has not issued a final unappealable judgment or order.
375 (2) The Legislature finds that the provisions of this bill:
376 (a) do not enlarge, eliminate, or destroy vested rights; and
377 (b) clarify legislative intent.