Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 176 First Substitute (2021GS)

Sponsor

Sen. Winterton, R.

Final action

Governor Signed 3/17/2021

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• defines terms;
• addresses the legislative intent and purpose of the Community Impact Fund Act;
• allows the Permanent Community Impact Fund Board to make a grant or loan regardless of whether the project results in more than one impact or outcome; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

MINERAL LEASE FUNDS AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Ronald M. Winterton
House Sponsor: 
____________
LONG TITLE
General Description:
This bill modifies provisions related to the expenditure of federal mineral lease
revenues.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ addresses the legislative intent and purpose of the Community Impact Fund Act;
▸ allows the Permanent Community Impact Fund Board to make a grant or loan
regardless of whether the project results in more than one impact or outcome; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides retrospective operation.
Utah Code Sections Affected:
AMENDS:
17B-1-612
, as last amended by Laws of Utah 2019, Chapter 37
17D-1-201
, as last amended by Laws of Utah 2020, Chapter 354
35A-8-301
, as renumbered and amended by Laws of Utah 2012, Chapter 212
35A-8-302
, as last amended by Laws of Utah 2019, Chapter 501
35A-8-305
, as last amended by Laws of Utah 2019, Chapter 89
35A-8-307
, as last amended by Laws of Utah 2014, Chapter 371
59-21-1
, as last amended by Laws of Utah 2018, Chapter 28
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
17B-1-612
 is amended to read:
17B-1-612.
Accumulated fund balances -- Limitations -- Excess balances --
Unanticipated excess of revenues -- Reserves for capital projects.
(1) (a) A local district may accumulate retained earnings or fund balances, as
appropriate, in any fund.
(b) For the general fund only, a local district may only use an accumulated fund
balance to:
(i) provide working capital to finance expenditures from the beginning of the budget
year until general property taxes or other applicable revenues are collected, subject to
Subsection (1)(c);
(ii) provide a resource to meet emergency expenditures under Section 
17B-1-623
; and
(iii) cover a pending year-end excess of expenditures over revenues from an
unavoidable shortfall in revenues, subject to Subsection (1)(d).
(c) Subsection (1)(b)(i) does not authorize a local district to appropriate a fund balance
for budgeting purposes, except as provided in Subsection (4).
(d) Subsection (1)(b)(iii) does not authorize a local district to appropriate a fund
balance to avoid an operating deficit during a budget year except:
(i) as provided under Subsection (4); or
(ii) for emergency purposes under Section 
17B-1-623
.
(2) (a) Except as provided in Subsection (2)(b), the accumulation of a fund balance in
the general fund may not exceed the most recently adopted general fund budget, plus 100% of
the current year's property tax.
(b) Notwithstanding Subsection (2)(a), a local district may accumulate in the general
fund mineral lease revenue that the local district receives from the United States under the
Mineral Lands Leasing Act, 30 U.S.C. Sec. 181 et seq., through a distribution under:
(i) Title 35A, Chapter 8, Part 3, Community Impact [
Alleviation
] 
Fund Act
; or
(ii) Title 59, Chapter 21, Mineral Lease Funds.
(3) If the fund balance at the close of any fiscal year exceeds the amount permitted
under Subsection (2), the district shall appropriate the excess in accordance with Section
17B-1-613
.
(4) A local district may utilize any fund balance in excess of 5% of the total revenues
of the general fund for budget purposes.
(5) (a) Within a capital projects fund, the board of trustees may, in any budget year,
appropriate from estimated revenue or fund balance to a reserve for capital projects for the
purpose of financing future specific capital projects, including new construction, capital
repairs, replacement, and maintenance, under a formal long-range capital plan that the board of
trustees adopts.
(b) A local district may allow a reserve amount under Subsection (5)(a) to accumulate
from year to year until the accumulated total is sufficient to permit economical expenditure for
the specified purposes.
(c) A local district may disburse from a reserve account under Subsection (5)(a) only
by a budget appropriation that the local district adopts in accordance with this part.
(d) A local district shall ensure that the expenditures from the appropriation budget
accounts described in this Subsection (5) conform to all requirements of this part relating to
execution and control of budgets.
Section 2. Section 
17D-1-201
 is amended to read:
17D-1-201.
Services that a special service district may be created to provide.
As provided in this part, a county or municipality may create a special service district to
provide any combination of the following services:
(1) water;
(2) sewerage;
(3) drainage;
(4) flood control;
(5) garbage collection and disposal;
(6) health care;
(7) transportation, including the receipt of federal secure rural school funds under
Section 
51-9-603
 for the purposes of constructing, improving, repairing, or maintaining public
roads;
(8) recreation;
(9) fire protection, including:
(a) emergency medical services, ambulance services, and search and rescue services, if
fire protection service is also provided;
(b) Firewise Communities programs and the development of community wildfire
protection plans; and
(c) the receipt of federal secure rural school funds as provided under Section 
51-9-603
for the purposes of carrying out Firewise Communities programs, developing community
wildfire protection plans, and performing emergency services, including firefighting on federal
land and other services authorized under this Subsection (9);
(10) providing, operating, and maintaining correctional and rehabilitative facilities and
programs for municipal, state, and other detainees and prisoners;
(11) street lighting;
(12) consolidated 911 and emergency dispatch;
(13) animal shelter and control;
(14) receiving federal mineral lease funds under Title 59, Chapter 21, Mineral Lease
Funds, and expending those funds to [
provide construction and maintenance of public
facilities, traditional governmental services, and planning, as a means for mitigating impacts
from extractive mineral industries
] 
be used in accordance with state and federal law
;
(15) in a county of the first class, extended police protection;
(16) control or abatement of earth movement or a landslide;
(17) an energy efficiency upgrade, a renewable energy system, or electric vehicle
charging infrastructure as defined in Section 
11-42a-102
, in accordance with Title 11, Chapter
42a, Commercial Property Assessed Clean Energy Act; or
(18) cemetery.
Section 3. Section 
35A-8-301
 is amended to read:
Part 3. Community Impact Fund Act
35A-8-301.
Legislative intent -- Purpose and policy.
(1) It is the intent of the Legislature to make available funds received by the state from
federal mineral lease revenues under Section 
59-21-2
, bonus payments on federal oil shale
lease tracts U-A and U-B, and all other bonus payments on federal mineral leases to be used for
[
the alleviation of social, economic, and public finance impacts resulting from the development
of natural resources in this state
] 
planning, construction and maintenance of public facilities,
and provision of public service
, subject to the limitations provided for in Section 35 of the
Mineral Leasing Act of 1920 (41 Stat. 450, 30 U.S.C. Sec. 191).
(2) To the extent allowed under the Mineral Leasing Act, any ambiguity as to whether
a particular use of the lease revenue and bonus payments described in Subsection (1) is a
permissible use under this part shall be resolved in favor of upholding the use.
[
(2)
] 
(3)
 The purpose of this part is to maximize the long term benefit of funds derived
from these lease revenues and bonus payments by fostering funding mechanisms which will,
consistent with sound financial practices, result in the greatest use of financial resources for the
greatest number of citizens of this state, with priority given to those communities designated as
impacted by the development of natural resources covered by the Mineral Leasing Act.
[
(3)
] 
(4)
 The policy of this state is to promote cooperation and coordination between
the state and [
its
] 
the state's
 agencies and political subdivisions with individuals, firms, and
business organizations engaged in the development of the natural resources of this state. [
The
purpose of such efforts include private sector participation, financial and otherwise, in the
alleviation of impacts associated with resources development activities.
]
Section 4. Section 
35A-8-302
 is amended to read:
35A-8-302.
Definitions.
As used in this part:
(1) "Bonus payments" means that portion of the bonus payments received by the
United States government under the Leasing Act paid to the state under Section 35 of the
Leasing Act, 30 U.S.C. Sec. 191, together with any interest that had accrued on those
payments.
(2) "Impact board" means the Permanent Community Impact Fund Board created under
Section 
35A-8-304
.
(3) "Impact fund" means the Permanent Community Impact Fund established by this
chapter.
(4) "Interlocal agency" means a legal or administrative entity created by a subdivision
or combination of subdivisions under the authority of Title 11, Chapter 13, Interlocal
Cooperation Act.
(5) "Leasing Act" means the Mineral Lands Leasing Act of 1920, 30 U.S.C. Sec. 181 et
seq.
(6) "Qualifying sales and use tax distribution reduction" means that, for the calendar
year beginning on January 1, 2008, the total sales and use tax distributions a city received
under Section 
59-12-205
 were reduced by at least 15% from the total sales and use tax
distributions the city received under Section 
59-12-205
 for the calendar year beginning on
January 1, 2007.
(7) (a) "Planning" means any of the following performed by or on behalf of the state, a
subdivision, or an interlocal entity:
(i) a study, analysis, plan, or survey; or
(ii) activities necessary to obtain a permit or land use approval, including review to
determine the need, cost, or feasibility of obtaining a permit or land use approval.
(b) "Planning" includes:
(i) the preparation of maps and guidelines;
(ii) land use planning;
(iii) a study or analysis of:
(A) the social or economic impacts associated with natural resource development;
(B) the demand for the transportation of individuals or goods;
(C) state, regional, and local development and growth;
(D) population and employment;
(E) development related to natural resources; and
(F) as related to any other activity described in this Subsection (7), engineering,
financial analysis, legal analysis, or any other analysis helpful to the state, subdivision, or
interlocal agency; and
(iv) any activity described in this Subsection (7) regardless of whether the activity is
for a public facility or a public service.
(8) "Public facility" means a facility:
(a) in whole or in part, owned, controlled, or operated by the state, a subdivision, or an
interlocal agency; and
(b) that serves a public purpose.
(9) (a) "Public service" means a service that:
(i) is provided, in whole or in part, by or on behalf of the state, a subdivision, or an
interlocal agency; and
(ii) serves a public purpose.
(b) "Public service" includes:
(i) a service described in Subsection (9)(a) regardless of whether the service is
provided in connection with a public facility;
(ii) the cost of providing a service described in Subsection (9)(a), including
administrative costs, wages, and legal fees; and
(iii) a contract with a public postsecondary institution to fund research, education, or a
public service program.
[
(7)
] 
(10)
 "Subdivision" means a county, city, town, county service area, special
service district, special improvement district, water conservancy district, water improvement
district, sewer improvement district, housing authority, building authority, school district, or
public postsecondary institution organized under the laws of this state.
[
(8)
] 
(11)
 (a) "Throughput infrastructure project" means the following facilities,
whether located within, partially within, or outside of the state:
(i) a bulk commodities ocean terminal;
(ii) a pipeline for the transportation of liquid or gaseous hydrocarbons;
(iii) electric transmission lines and ancillary facilities;
(iv) a shortline freight railroad and ancillary facilities;
(v) a plant or facility for storing, distributing, or producing hydrogen, including the
liquification of hydrogen, for use as a fuel in zero emission motor vehicles, for electricity
generation, or for industrial use; or
(vi) a plant for the production of zero emission hydrogen fueled trucks.
(b) "Throughput infrastructure project" includes:
(i) an ownership interest or a joint or undivided ownership interest in a facility;
(ii) a membership interest in the owner of a facility; or
(iii) a contractual right, whether secured or unsecured, to use all or a portion of the
throughput, transportation, or transmission capacity of a facility.
Section 5. Section 
35A-8-305
 is amended to read:
35A-8-305.
Duties -- Loans -- Interest.
(1) The impact board shall:
(a) make grants and loans from the amounts appropriated by the Legislature out of the
impact fund to state agencies, subdivisions, and interlocal agencies that are or may be socially
or economically impacted, directly or indirectly, by mineral resource development for:
(i) planning;
(ii) construction and maintenance of public facilities; and
(iii) provision of public services;
(b) establish the criteria by which the loans and grants will be made;
(c) determine the order in which projects will be funded;
(d) in conjunction with other agencies of the state, subdivisions, or interlocal agencies,
conduct studies, investigations, and research into the effects of proposed mineral resource
development projects upon local communities;
(e) sue and be sued in accordance with applicable law;
(f) qualify for, accept, and administer grants, gifts, loans, or other funds from:
(i) the federal government; and
(ii) other sources, public or private; and
(g) perform other duties assigned to it under Sections 
11-13-306
 and 
11-13-307
.
(2) Money, including all loan repayments and interest, in the impact fund derived from
bonus payments may be used for any of the purposes set forth in Subsection (1)(a) but may
only be given in the form of interest bearing loans to be paid back into the impact fund by the
agency, subdivision, or interlocal agency.
[
(3) (a) "Provision of public services" under Subsection (1)(a) includes contracts with
public postsecondary institutions to fund research, education, or public service programs that
benefit impacted counties or political subdivisions of the counties.
]
[
(b) Each contract under Subsection (3)(a) shall be:
]
[
(i) based on an application to the impact board from the impacted county; and
]
[
(ii) approved by the county legislative body.
]
[
(c) For purposes of this section, a land use plan is a public service program.
]
(3) The impact board may make a grant or loan under Subsection (1) regardless of
whether the activity results in more than one impact or outcome, including an increase in
natural resource development or an increase in economic development.
(4) If the public service described in Subsection (1)(a) is a contract with a public
postsecondary institution described in Subsection 
35A-3-302
(9)(b)(iii), the contract shall be:
(a) based on an application to the impact board from the impacted county; and
(b) approved by the county legislative body.
Section 6. Section 
35A-8-307
 is amended to read:
35A-8-307.
Impact fund administered by impact board -- Eligibility for
assistance -- Review by board -- Administration costs -- Annual report.
(1) (a) The impact board shall:
(i) administer the impact fund in a manner that will keep a portion of the impact fund
revolving;
(ii) determine provisions for repayment of loans;
(iii) establish criteria for determining eligibility for assistance under this part; and
(iv) consider recommendations from the School and Institutional Trust Lands
Administration when awarding a grant described in Subsection 
35A-8-303
(6).
(b) (i) The criteria for awarding loans or grants made from funds described in
Subsection 
35A-8-303
(5) shall be consistent with the requirements of Subsection
35A-8-303
(5).
(ii) The criteria for awarding grants made from funds described in Subsection
35A-8-303
(2)(c) shall be consistent with the requirements of Subsection 
35A-8-303
(6).
(c) In order to receive assistance under this part, subdivisions and interlocal agencies
shall submit formal applications containing the information that the impact board requires.
(2) In determining eligibility for loans and grants under this part, the impact board shall
consider the following:
(a) the subdivision's or interlocal agency's current mineral lease production;
(b) the feasibility of the actual development 
or the increased development
 of a resource
that may impact the subdivision or interlocal agency directly or indirectly;
(c) current taxes being paid by the subdivision's or interlocal agency's residents;
(d) the borrowing capacity of the subdivision or interlocal agency, including:
(i) [
its
] 
the impact board's
 ability and willingness to sell bonds or other securities in the
open market; and
(ii) [
its
] 
the impact board's
 current and authorized indebtedness;
(e) all possible additional sources of state and local revenue, including utility user
charges;
(f) the availability of federal assistance funds;
(g) probable growth of population due to actual or prospective natural resource
development in an area;
(h) existing public facilities and services;
(i) the extent of the expected direct or indirect impact upon public facilities and 
public
services of the actual or prospective natural resource development in an area; and
(j) the extent of industry participation in an impact alleviation plan, either as specified
in Title 63M, Chapter 5, Resource Development Act, or otherwise.
(3) The impact board may not fund an education project that could otherwise have
reasonably been funded by a school district through a program of annual budgeting, capital
budgeting, bonded indebtedness, or special assessments.
(4) The impact board may restructure all or part of the agency's or subdivision's
liability to repay loans for extenuating circumstances.
(5) The impact board shall:
(a) review the proposed uses of the impact fund for loans or grants before approving
them and may condition its approval on whatever assurances the impact board considers
necessary to ensure that proceeds of the loan or grant will be used in accordance with the
Leasing Act and this part; and
(b) ensure that each loan specifies the terms for repayment and is evidenced by general
obligation, special assessment, or revenue bonds, notes, or other obligations of the appropriate
subdivision or interlocal agency issued to the impact board under whatever authority for the
issuance of those bonds, notes, or obligations exists at the time of the loan.
(6) The impact board shall allocate from the impact fund to the department those funds
that are appropriated by the Legislature for the administration of the impact fund, but this
amount may not exceed 2% of the annual receipts to the impact fund.
(7) The department shall include in the annual written report described in Section
35A-1-109
, the number and type of loans and grants made as well as a list of subdivisions and
interlocal agencies that received this assistance.
Section 7. Section 
59-21-1
 is amended to read:
59-21-1.
Disposition of federal mineral lease money -- Priority to political
subdivisions impacted by mineral development -- Disposition of mineral bonus payments
-- Appropriation of money attributable to royalties from extraction of minerals on federal
land located within boundaries of Grand Staircase-Escalante National Monument.
(1) Except as provided in Subsections (2) through (4), all money received from the
United States under the provisions of the Mineral Lands Leasing Act, 30 U.S.C. Sec. 181 et
seq., shall:
(a) be deposited in the Mineral Lease Account of the General Fund; and
(b) be appropriated by the Legislature giving priority to those subdivisions of the state
socially or economically impacted by development of minerals leased under the Mineral Lands
Leasing Act, for:
(i) planning;
(ii) construction and maintenance of public facilities; and
(iii) provision of public services.
(2) Seventy percent of money received from federal mineral lease bonus payments
shall be deposited into the Permanent Community Impact Fund and shall be used as provided
in Title 35A, Chapter 8, Part 3, Community Impact [
Alleviation
] 
Fund Act
.
(3) Thirty percent of money received from federal mineral lease bonus payments shall
be deposited in the Mineral Bonus Account created by Subsection 
59-21-2
(1) and appropriated
as provided in that subsection.
(4) (a) For purposes of this Subsection (4):
(i) the "boundaries of the Grand Staircase-Escalante National Monument" means the
boundaries:
(A) established by Presidential Proclamation No. 6920, 61 Fed. Reg. 50,223 (1996);
and
(B) modified by:
(I) Pub. L. No. 105-335, 112 Stat. 3139; and
(II) Pub. L. No. 105-355, 112 Stat. 3247; and
(ii) a special service district, school district, or federal land is considered to be located
within the boundaries of the Grand Staircase-Escalante National Monument if a portion of the
special service district, school district, or federal land is located within the boundaries
described in Subsection (4)(a)(i).
(b) Beginning on July 1, 1999, the Legislature shall appropriate, as provided in
Subsections (4)(c) through (g), money received from the United States that is attributable to
royalties from the extraction of minerals on federal land that, on September 18, 1996, was
located within the boundaries of the Grand Staircase-Escalante National Monument.
(c) The Legislature shall annually appropriate 40% of the money described in
Subsection (4)(b) to the Division of Finance to be distributed by the Division of Finance to
special service districts that are:
(i) established by counties under Title 17D, Chapter 1, Special Service District Act;
(ii) socially or economically impacted by the development of minerals under the
Mineral Lands Leasing Act; and
(iii) located within the boundaries of the Grand Staircase-Escalante National
Monument.
(d) The Division of Finance shall distribute the money described in Subsection (4)(c)
in amounts proportionate to the amount of federal mineral lease money generated by the county
in which a special service district is located.
(e) The Legislature shall annually appropriate 40% of the money described in
Subsection (4)(b) to the State Board of Education to be distributed equally to school districts
that are:
(i) socially or economically impacted by the development of minerals under the
Mineral Lands Leasing Act; and
(ii) located within the boundaries of the Grand Staircase-Escalante National
Monument.
(f) The Legislature shall annually appropriate 2.25% of the money described in
Subsection (4)(b) to the Utah Geological Survey to facilitate the development of energy and
mineral resources in counties that are:
(i) socially or economically impacted by the development of minerals under the
Mineral Lands Leasing Act; and
(ii) located within the boundaries of the Grand Staircase-Escalante National
Monument.
(g) Seventeen and three-fourths percent of the money described in Subsection (4)(b)
shall be deposited annually into the State School Fund established by Utah Constitution Article
X, Section 5.
Section 8. 
Retrospective operation.
(1) The provisions of this bill apply to any claim for which a court of competent
jurisdiction has not issued a final unappealable judgment or order.
(2) The Legislature finds that the provisions of this bill:
(a) do not enlarge, eliminate, or destroy vested rights; and
(b) clarify legislative intent.