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Show October 15 02.qxd 12/7/2021 Volume VII Issue I 2:42 PM Page 11 THE OGDEN VALLEY NEWS Page 11 Ocotober 15, 2002 BALLOTS cont. from page 10 CONSTITUTIONAL AMENDMENT NUMBER 5 DEBT LIMITS FOR POLITICAL SUBDIVISIONS (HJR 14) Shall the Utah Constitution be amended to: (1) change how the Constitution designates cities that are allowed to incur a specified voter-approved debt; and (2) clarify that the measurement of a county’s debt limit is based on the value of taxable property in the county? INTENT: Constitutional Amendment 5 would clarify the limits on the use of debt by cities and counties by making two changes. (1) The term “city of the third class” is replaced with “other city” to allow the debt limitations on cities and towns to remain the same. (2) The Constitution places a maximum cap on county indebtedness at 2 percent of the value of property in the county but does not say whether tax-exempt property should be included in the calculation. Amendment 5 solves this problem by adding “of the value of taxable property in the county.” This reduces the potential amount of debt a county may incur. PROS AND CONS: No arguments against Constitutional Amendment Number 5 were submitted to the Lt. Governor. CONSTITUTIONAL AMENDMENT NUMBER 6 RESOLUTION TO EXPAND THE GOVERNMENT PROPERTY TAX EXEMPTION (HJR 30) Shall the Utah Constitution be amended to authorize the creation of a property tax exemption, as provided by statute, for property not owned but used, controlled, and possessed by the state or by a local government entity? Constitutional Amendment Number 6 would add a state property tax exemption for property not owned but used, controlled, and possessed by the State or a political subdivision. Currently only property owned by the State, school districts, public libraries, counties, cities, towns, special districts and other political subdivisions may be exempted. INTENT: Amendment 6 will enable government entities, such as transit systems, schools, universities and water districts, to obtain funding for major capital projects without raising local taxes by taking advantage of federal tax depreciation on capital assets. Since government entities do not pay federal taxes, they cannot take advantage of depreciation directly. However, they can sell their assets to capital investment corporations, then lease them back while continuing to control and operate them. Most of the sale proceeds paid by the investment group are placed in an escrow account at the outset of the contract to fully cover the lease payments and all costs of the sale/leaseback arrangement. The remainder is immediately available as new revenue for the government entity. At the end of the lease, ownership of the assets is returned to the government entity. If Constitutional Amendment 6 is approved by the voters, each government entity wishing to take advantage of the sale/leaseback mechanism will have to apply to the state legislature for approval and conditions under which they may enter into such a contract. The details of such arrangements would be spelled out in future legislation on a case by case basis. PROS AND CONS: Proponents argue that Amendment 6 will bring federal dollars to the State and stimulate economic growth. The Utah Transit Authority and Federal Transit Administration say that the funds gained from the sale/leaseback of UTA property could be used to draw even more federal matching funds for transit. In some states, schools and universities use this financing mechanism for education. Airlines and railroads also use lease financing for aircraft and rolling stock. Opponents fear that a tax burden on future taxpayers after the lease ends will be created by new capital projects that must be paid off and maintained. Proponents respond that one-time money will be spent on one-time projects, thereby saving tax dollars and borrowing costs, that maintenance is normally budgeted by government managers and that the money need not be spent on capital projects. Another argument is that depreciation reduces tax revenues to the federal government. Response: The federal government encourages returning tax dollars to the states for updating facilities to meet federal mandates such as the Clean Air Act. Amendment 6 was approved by the Constitutional Review Commission and by the Legislature (House 67-2 and Senate 24-3). Citizen’s State Initiative Number 1 - Radioactive Waste Restrictions Act Shall a law be enacted to: (1) prohibit certain state regulatory agency employees and board members from employment or lobbying in the field of radioactive waste disposal or storage for three years after employment or service; (2) expand the circumstances requiring the governor’s and legislature’s approval of certain commercial radioactive waste licenses and facilities; (3) prohibit the approval of certain radioactive waste facilities and license applications; (4) increase existing and impose new taxes and fees on radioactive waste; (5) divert taxes presently imposed on radioactive waste, and use new radioactive waste taxes for an education fund and a human needs endowment; and (6) make other changes? (Effective date January 1, 2003) Impartial Analysis Adapted from state Office of Legislative Research and General Counsel, staff for the Legislature. They provide a summary of ballot issues called Impartial Analysis to be published by the State Elections Office in the state Voter Information Pamphlet, along with any pros, cons and rebuttals submitted to the Lt. Governor. Citizen’s State Initiative 1 provides stricter regulations, some prohibitions, and new and increased fees and taxes on the disposal and storage of radioactive waste. The Initiative distributes 80 percent of all taxes on radioactive waste to education and 20 percent to an endowment to help alleviate homelessness and poverty. Citizen’s State Initiative 1 Makes the Following Changes to Utah Law 1. Restricts certain employment and lobbying. It prohibits the executive director of the Department of Environmental Quality (Department), employees of the Division of Radiation (Division), and members of the Radiation Control Board (Board) from accepting employment with or lobbying for someone who is subject to the Division’s regulatory authority for three years after Department or Division employment or Board membership, if that employment or lobbying is in the field of radioactive waste disposal or storage. 2. Expands circumstances requiring Governor’s and Legislature’s approval. It expands the circumstances under which the Governor’s and Legislature’s approval are required to grant or amend a radioactive waste disposal license or restructure a commercial radioactive waste facility. 3. Prohibits the approval of certain radioactive waste facilities and licenses. It prohibits the Governor, Legislature, and Board from approving new radioactive waste facilities or licenses for higher level radioactive waste, and authorizes a private citizen to sue to enforce this prohibition. Increases existing and imposes new taxes and fees on radioactive waste. It imposes a new fee on radioactive waste to pay for impact reduction and community and economic development in the county in which the radioactive waste disposal facility is located. It increases from $400,000 to a minimum of $5,000,000 the annual fee that an owner of a radioactive waste facility must pay for perpetual care and maintenance of the facility and eliminates this annual fee when the total reaches $100,000,000. It increases existing taxes on the disposal of radioactive waste and imposes new taxes on some types of radioactive waste not presently taxed. Uses radioactive waste taxes for education and the homeless and impoverished. It creates a Fund to receive taxes imposed on radioactive waste and establishes a board to administer the Fund. It creates an Endowment to receive money from the Fund and creates a state authority to administer the Endowment. It requires 80 percent of the tax revenues in the Fund to be spent on education, specifically for class-size reduction, computer technology, textbooks, classroom supplies, and scholarships, and requires 20 percent, up to a maximum of $200,000,000, to be given to the Endowment to be distributed to organizations that provide assistance to the homeless and impoverished. 6. Other changes. It requires the Department to contract with independent scientific organizations to review certain environmental monitoring practices. It modifies and limits membership on the Board, and removes the Department’s executive director from the Board. It removes the Board’s discretion with regard to certain regulatory decisions. It removes the Board’s authority to suspend applications for commercial radioactive waste licenses under certain circumstances. It accelerates the time at which the Board is required to begin evaluating the adequacy of the fund established for the perpetual care and maintenance of radioactive waste facilities from 2006 to 2004. It removes a tax presently imposed on radioactive waste received for reprocessing. It prohibits the Legislature from making appropriations from the Fund or the Endowment. It prohibits the Legislature from reducing funding levels of programs also receiving money from the Fund or the Endowment. It requires the tax for radioactive waste disposal or reprocessing to be paid monthly rather than quarterly. Potential Conflicts of Initiative 1 with the United States Constitution or Utah Constitution (1) The three-year lobbying prohibition may conflict with the freedom of speech provision of the First Amendment to the United States Constitution; (2) empowering the Endowment Authority to appropriate Endowment money may improperly delegate legislative authority in violation of Article V, Section 1 of the Utah Constitution; and (3) to the extent that this Initiative restricts the Legislature from making appropriations or reducing funding levels of state-funded programs, it may conflict with the Legislature’s constitutional power to appropriate state funds. Fiscal Impact The revenue estimates described in this fiscal analysis depend on the continued viability of the radioactive waste disposal and storage industry in Utah. 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