Utah

Utah amended its statutory code in 1988 to limit the growth of appropriations to the growth of population and inflation.

63-38c-101.   Title.
     This chapter is known as the "State Appropriations and Tax Limitation Act." 

     63-38c-103.   Definitions.
     As used in this chapter:
     (1) (a) "Appropriations" means actual unrestricted capital and operating appropriations from unrestricted General Fund, Uniform School Fund, and Transportation Fund sources as presented in the governor's executive budgets.
     (b) "Appropriation" includes appropriations that are contingent upon available surpluses in the General Fund, Uniform School Fund, or Transportation Fund.
     (c) "Appropriations" does not mean:
     (i) debt service expenditures;
     (ii) emergency expenditures;
     (iii) expenditures from all other fund or subfund sources presented in the executive budgets;
     (iv) transfers into, or appropriations made to, the Budgetary Reserve Account established in Section 63-38-2.5;
     (v) monies appropriated to fund the total one-time project costs for the construction of capital developments as defined in Section 63A-5-104; or
     (vi) appropriations made to the Centennial Highway Fund created by Section 72-2-118.
     (2) "Base year real per capita appropriations" means the result obtained for the state by dividing the fiscal year 1985 actual appropriations of the state less debt monies, less $55 million appropriated for flooding and less $14.2 million appropriated for capital projects in Section 3 of Chapter 265, Laws of Utah 1985 General Session, by:
     (a) the state's July 1, 1983 population; and
     (b) the fiscal year 1983 inflation index divided by 100.
     (3) "Calendar year" means the time period beginning on January 1 of any given year and ending on December 31 of the same year.
     (4) "Fiscal emergency" means an extraordinary occurrence requiring immediate expenditures and includes the settlement under Chapter 4, Laws of Utah 1988, Fourth Special Session.
     (5) "Fiscal year" means the time period beginning on July 1 of any given year and ending on June 30 of the subsequent year.
     (6) "Fiscal year 1985 actual base year appropriations" means fiscal year 1985 actual capital and operations appropriations from general, uniform school, and transportation fund sources, less debt monies, less $55 million appropriated for flooding, and less $14.2 million appropriated for capital projects in Section 3, Chapter 265, Laws of Utah 1985.
     (7) "Inflation index" means the change in the general price level of goods and services as measured by the Gross National Product Implicit Price Deflator of the Bureau of Economic Analysis, U.S. Department of Commerce calculated as provided in Section 63-38c-202.
     (8) (a) "Maximum allowable appropriations limit" means the appropriations that could be, or could have been, spent in any given year under the limitations of this chapter.
     (b) "Maximum allowable appropriations limit" does not mean actual appropriations spent or actual expenditures.
     (9) "Most recent fiscal year's inflation index" means the fiscal year inflation index two fiscal years previous to the fiscal year for which the maximum allowable inflation and population appropriations limit is being computed under this chapter.
     (10) "Most recent fiscal year's personal income" means the fiscal year personal income

two fiscal years previous to the fiscal year for which the maximum allowable personal income appropriations limit is being computed under this chapter.
     (11) "Most recent fiscal year's population" means the fiscal year population two fiscal years previous to the fiscal year for which the maximum allowable inflation and population appropriations limit is being computed under this chapter.
     (12) "Personal income" means the total personal income of the state as calculated by the Office of Planning and Budget according to the procedures and requirements of Section 63-38c-202.
     (13) "Population" means the number of residents of the state as of July 1 of each year as calculated by the Office of Planning and Budget according to the procedures and requirements of Section 63-38c-202.
     (14) "Revenues" means the revenues of the state from every tax, penalty, receipt, and other monetary exaction and interest connected with it that are recorded as unrestricted revenue of the General Fund, Uniform School Fund, and Transportation Fund, except as specifically exempted by this chapter.
     (15) "Security" means any bond, note, warrant, or other evidence of indebtedness, whether or not the bond, note, warrant, or other evidence of indebtedness is or constitutes an "indebtedness" within the meaning of any provision of the constitution or laws of this state.

63-38c-201.   Appropriations limit -- Formula.
     (1) There is established a state appropriations limit for each fiscal year beginning after June 30, 1988.
     (2) For each of these fiscal years, the annual legislative appropriations for this state, its agencies, departments, and institutions may not exceed that sum determined by the average of the two formulas specified in Subsections (2)(h) and (i) in which:
     (a) "Z" equals the most recent fiscal year's personal income;
     (b) "Y" equals personal income for the fiscal year just previous to "Z";
     (c) "A" equals the prior fiscal year's maximum allowable personal income appropriations limit beginning with fiscal year 1985 actual base year appropriations;
     (d) "B" equals the base year real per capita appropriations for the state, its agencies, departments, and institutions;
     (e) "P" equals the most recent fiscal year's population; and
     (f) "I" equals the most recent fiscal year's inflation index adjusted to reflect fiscal year 1989 as having an index value of 100.
     (g) The revenues specified in Section 63-38c-205 are not subject to the limitation in this section.
     (h) Formula 1: B* P* (I/100) = Maximum Allowable Inflation and Population Appropriations Limit.
     (i) Formula 2: A* (Z/Y) = Maximum Allowable Personal Income Appropriations Limit.

63-38c-202.   Computing formula elements.
     (1) For purposes of computing the most recent fiscal year's personal income, the Office of Planning and Budget shall use the quarterly data produced by the Bureau of Economic Analysis, U.S. Department of Commerce.
     (2) For purposes of calculating fiscal year inflation indexes and fiscal year personal income for the previous fiscal year, the Office of Planning and Budget shall use:
     (a) the actual quarterly data released by the U.S. Department of Commerce as of January 31 of each year; and
     (b) the U.S. Bureau of Census population estimates as of January 31 of each year.
     (3) (a) For purposes of computing the inflation index, the Office of Planning and Budget shall:
     (i) assign the bureau's 1982 calendar year inflation index value of 100 to fiscal year 1989 for purposes of computing fiscal year index values;
     (ii) compute all subsequent fiscal year inflation indexes after having assigned the fiscal year 1989 inflation index a value of 100; and
     (iii) use the quarterly index values published by the Bureau of Economic Analysis, U.S. Department of Commerce, to compute fiscal year index values.
     (b) If the bureau changes its calendar base year, appropriate adjustments are to be made in this chapter to accommodate those changes.
     (4) (a) For purposes of computing the most recent fiscal year's population, the Office of Planning and Budget shall convert the April 1 decennial census estimate to a July 1 estimate, unless otherwise estimated by the Bureau of Census.
     (b) If the bureau changes the state's July 1, 1983 base year population after it conducts the 1990 Census, appropriate adjustments shall be made in this chapter to accommodate those changes.

63-38c-203.   Program and service adjustments to the limitation -- Funding level.
     (1) If the state transfers partial or total responsibility of a program or service to another unit of government, the appropriations limitations shall be decreased by the amount of the transfer.
     (2) If the state accepts partial or total responsibility for a program or service from another unit of government, the appropriations limit shall be increased by the amount of the transfer.
     (3) If funding exempted under this chapter for a program or service administered by the state is reduced or eliminated and the Legislature elects to fund the program or service with tax revenue, the appropriations limitations shall be increased by the amount the Legislature elects to fund.
     (4) If the state transfers the funding source of a program or service from taxes to user charges or other exempted revenue sources specified in this chapter, the maximum allowable appropriations limitations shall be decreased by the amount of the transfer.
     (5) If the Legislature transfers the funding source of a program or service from user charges or other exempted revenue sources as specified in this chapter to tax revenues, appropriations limitations shall be increased by the amount of the transfer.
     (6) If the state transfers revenues from sources exempt under this chapter to funds containing revenues from nonexempt sources, the revenues transferred shall be part of and subject to the appropriations limits of this chapter.

     63-38c-204.   Exceptions to limitation -- Fiscal emergency -- Requirements -- Limits modified or exceeded by vote of the people.
     (1) (a) The limits as provided in this chapter may be exceeded if a fiscal emergency is declared.
     (b) A fiscal emergency for the state shall be declared by the governor and confirmed by more than two-thirds of both houses of the Legislature.
     (2) (a) Funding for fiscal emergencies may not be included in the appropriations base for computing the maximum allowable appropriations in subsequent years.
     (b) Fiscal emergency appropriations shall remain separate from appropriations subject to limits imposed by this chapter and shall be assigned expiration dates.
     (3) Any limit in this chapter may be exceeded or modified by a majority vote of the people in a statewide election.

     63-38c-205.   Monies excluded from the limitation.
     Monies from the following sources are excluded from the revenues appropriated and used in determining a limitation:
     (1) monies received from the government of the United States including federal mineral lease payments;
     (2) monies received by the state from another unit of government, except the proceeds of taxes, fees, or penalties imposed by the state and collected by the other unit of government;
     (3) monies derived from the issuance of, or to pay interest, principal, or redemption premiums on, any security;
     (4) monies received from the sale of fixed assets or gains on fixed asset transfers;
     (5) the proceeds of contracts, grants, gifts, donations, and bequests made to the state for a purpose specified by the contractor or donor;
     (6) user charges derived by the state from the sale of a product or service pledged or legally available to repay any security or for which the quantity of the product or level of service provided to a user is at the discretion of the user; and
     (7) monies raised to meet fiscal emergencies.

     63-38c-301.   State auditor's responsibilities with respect to the limitation -- Correction of deficiencies.
     The state auditor shall notify the state through the appropriate officer or officers of necessary corrective action if upon audit or examination of the results of an independent audit or a budget document of the state, the state auditor determines that:
     (1) funds have been improperly accounted or budgeted for in order to avoid the limitations imposed by this chapter;
     (2) funds have been improperly exempted from the limitations as provided in this chapter;
     (3) general government functions have been improperly financed by user or service charges; or
     (4) the limitations imposed by this chapter have been exceeded.

     63-38c-401.   State mandated property tax limitation -- Vote requirement needed to exceed limitation.
     The state mandated property tax rate in Title 53A, Chapter 17a, Minimum School Program Act, as of July 1, 1989, may not be increased without more than a two-thirds vote of both houses of the Legislature.

     63-38c-402.   Debt limitation -- Vote requirement needed to exceed limitation -- Exceptions.
     (1) (a) Except as provided in Subsection (1)(b), the outstanding general obligation debt of the state may not exceed 20% of the maximum allowable appropriations limit unless approved by more than a two-thirds vote of both houses of the Legislature.
     (b) Notwithstanding the limitation contained in Subsection (1)(a), debt issued under the authority of Title 63B, Chapter 6, Part 2, 1997 Highway General Obligation Bond Authorization, Title 63B, Chapter 6, Part 3, 1997 Highway Bond Anticipation Note Authorization, Title 63B, Chapter 7, Part 2, 1998 Highway General Obligation Bond Authorization, Title 63B, Chapter 7, Part 3, 1998 Highway Bond Anticipation Note Authorization, Title 63B, Chapter 8, Part 2, 1999 Highway General Obligation Bond Authorization, and Title 63B, Chapter 8, Part 3, 1999 Highway Bond Anticipation Note Authorization, is not subject to the debt limitation established by this section.
     (2) This section does not apply if contractual rights will be impaired.

-- THE UTAH CODE

Created by: Jennifer L. Crull

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