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1986: THIS IS IN REPLY TO YOUR LETTER DATED NOVEMBER 27. WHICH WILL BE ANSWERED IN DETAIL BELOW. YOU ASKED 1) WHETHER STATE DISTRIBUTIONS OF FEDERAL MINERAL LEASE MONIES TO A COUNTY WOULD LEAD TO A LOSS OF PILT FUNDS IF THE STATE PRESCRIBES HOW THE COUNTY IS TO USE THE FUNDS. WE HAVE REVIEWED THE LEGISLATIVE HISTORY OF PILT. OUR BRIEF RESPONSES ARE AS FOLLOWS: 1) IF THE MINERAL LEASE FUNDS PROVIDED TO THE COUNTY ARE USED TO ASSIST IT IN CARRYING OUT FUNCTIONS OR ACTIVITIES THAT IT WOULD OTHERWISE PROVIDE AND PAY FOR WITH COUNTY FUNDS. REGARDLESS OF WHETHER OR NOT THE STATE HAS PRESCRIBED HOW THE COUNTY IS TO USE THESE FUNDS. AUTHORIZES AND DIRECTS THE SECRETARY OF THE INTERIOR TO MAKE PAYMENTS ON A FISCAL YEAR BASIS TO EACH UNIT OF GENERAL LOCAL GOVERNMENT IN WHICH CERTAIN TYPES OF FEDERAL LANDS ARE LOCATED.

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B-221248, SEP 22, 1986, 65 COMP.GEN. 849

TAXES - FEDERAL PAYMENTS IN LIEU OF TAXES - TO UNITS OF LOCAL GOVERNMENT - DEDUCTION PROPRIETY 1. FEDERAL MINERAL LAND LEASE MONIES DISTRIBUTED TO A COUNTY, AND USED BY THE COUNTY TO CARRY OUT FUNCTIONS IT WOULD OTHERWISE PROVIDE AND PAY FOR WITH COUNTY REVENUES, MUST BE DEDUCTED FROM THE COUNTY'S PAYMENTS IN LIEU OF TAXES PAYMENTS. 31 U.S.C. SEC. 6903(B). TAXES - FEDERAL PAYMENTS IN LIEU OF TAXES - DISTRIBUTION - STATE STATUTORY PROVISIONS 2. MULTI-COUNTY ASSOCIATIONS OF LOCAL GOVERNMENT, CREATED IN ACCORDANCE WITH STATE LAW, CAN RECEIVE STATE DISTRIBUTIONS OF FEDERAL MINERAL LEASE FUNDS. 30 U.S.C. SEC. 191; UTAH CODE ANN. SECS. 63-52 1, 63-52-3, AND 11- 13-5.5. TAXES - FEDERAL PAYMENTS IN LIEU OF TAXES - TO UNITS OF LOCAL GOVERNMENT - DEDUCTION PROPRIETY 3. AS WITH DIRECT COUNTY RECEIPTS OF STATE DISTRIBUTIONS OF FEDERAL MINERAL LEASE MONIES, ASSOCIATION EXPENDITURES OF SUCH MONIES TO PROVIDE SERVICES FOR THEIR MEMBERS WHICH OTHERWISE WOULD BE PROVIDED BY COUNTY MEMBERS WITH COUNTY REVENUES, MUST BE DEDUCTED FROM THE COUNTIES' PAYMENTS IN LIEU OF TAXES PAYMENTS ON A PRO RATA BASIS.

TO THE HONORABLE JAMES V. HANSEN, HOUSE OF REPRESENTATIVES, SEPTEMBER 22, 1986:

THIS IS IN REPLY TO YOUR LETTER DATED NOVEMBER 27, 1985, SIGNED JOINTLY WITH REPRESENTATIVES MONSON AND NEILSON, CONCERNING THE USES TO WHICH FEDERAL MINERAL LEASE MONIES MAY BE PUT BY LOCAL ENTITIES WITHOUT INCURRING LOSSES IN THEIR PAYMENTS UNDER THE PAYMENTS IN LIEU OF TAXES ACT (PILT), AS AMENDED, 31 U.S.C. SECS. 6901-6907. IN YOUR LETTER YOU ASKED THREE SPECIFIC QUESTIONS, WHICH WILL BE ANSWERED IN DETAIL BELOW. BRIEF, YOU ASKED 1) WHETHER STATE DISTRIBUTIONS OF FEDERAL MINERAL LEASE MONIES TO A COUNTY WOULD LEAD TO A LOSS OF PILT FUNDS IF THE STATE PRESCRIBES HOW THE COUNTY IS TO USE THE FUNDS; 2) WHETHER MULTI-COUNTY ASSOCIATIONS OF LOCAL GOVERNMENT, CREATED UNDER UTAH LAW, MAY RECEIVE FEDERAL MINERAL LEASE MONIES; AND, IF SO, 3) WHETHER MULTI COUNTY ASSOCIATION MEMBERS' PILT PAYMENTS WOULD BE SUBJECT TO DEDUCTIONS FOR THEIR SHARES OF THE MINERAL LEASE FUNDS THEY RECEIVE.

WE HAVE REVIEWED THE LEGISLATIVE HISTORY OF PILT, OUR PRIOR DECISIONS CONCERNING ITS APPLICATION, THE FORMAL VIEWS OF THE DEPARTMENT OF THE INTERIOR, AND THE RELEVANT UTAH CODE PROVISIONS. OUR BRIEF RESPONSES ARE AS FOLLOWS: 1) IF THE MINERAL LEASE FUNDS PROVIDED TO THE COUNTY ARE USED TO ASSIST IT IN CARRYING OUT FUNCTIONS OR ACTIVITIES THAT IT WOULD OTHERWISE PROVIDE AND PAY FOR WITH COUNTY FUNDS, THEN, REGARDLESS OF WHETHER OR NOT THE STATE HAS PRESCRIBED HOW THE COUNTY IS TO USE THESE FUNDS, THEY MUST BE DEDUCTED FROM THE COUNTY'S PILT RECEIPTS; 2) MULTI- COUNTY ASSOCIATIONS OF LOCAL GOVERNMENT CAN RECEIVE MINERAL LEASE FUNDS; AND 3) AS WITH DIRECT COUNTY RECEIPTS OF MINERAL LEASE MONIES, THEY MUST BE DEDUCTED FROM EACH MULTI-COUNTY ASSOCIATION MEMBER'S SHARE OF PILT FUNDS IF THE ASSOCIATION SPENDS THESE MONIES TO PROVIDE SERVICES FOR ITS MEMBERS THAT WOULD OTHERWISE BE PROVIDED BY COUNTY MEMBERS WITH COUNTY REVENUES.

BACKGROUND

THE PAYMENTS IN LIEU OF TAXES ACT OF 1976, AS AMENDED, AUTHORIZES AND DIRECTS THE SECRETARY OF THE INTERIOR TO MAKE PAYMENTS ON A FISCAL YEAR BASIS TO EACH UNIT OF GENERAL LOCAL GOVERNMENT IN WHICH CERTAIN TYPES OF FEDERAL LANDS ARE LOCATED. SECTION 2 OF PILT, 31 U.S.C. SEC. 6903(B), SETS FORTH ALTERNATIVE FORMULAE TO BE USED IN DETERMINING THE AMOUNT OF THESE PAYMENTS:

"(B) (1) A PAYMENT UNDER SECTION 6902 OF THIS TITLE IS EQUAL TO THE GREATER OF--

"(A) 75 CENTS FOR EACH ACRE OF ENTITLEMENT LAND LOCATED WITHIN A UNIT OF GENERAL LOCAL GOVERNMENT (BUT NOT MORE THAN THE LIMITATION DETERMINED UNDER SUBSECTION (C) OF THIS SECTION) REDUCED (BUT NOT BELOW 0) BY AMOUNTS THE UNIT RECEIVED IN THE PRIOR FISCAL YEAR UNDER A PAYMENT LAW; OR

"(B) 10 CENTS FOR EACH ACRE OF ENTITLEMENT LAND LOCATED IN THE UNIT (BUT NOT MORE THAN THE LIMITATION DETERMINED UNDER SUBSECTION (C) OF THIS SECTION)."

AMONG THE PAYMENT LAWS SPECIFIED IN SECTION 6903(A) IS THE MINERAL LANDS LEASING ACT, AS AMENDED, 30 U.S.C. SEC. 191, WHICH PROVIDES IN PART THAT:

"ALL MONEY RECEIVED FROM SALES, BONUSES, ROYALTIES *** AND RENTALS OF THE PUBLIC LANDS UNDER THE PROVISIONS OF THIS CHAPTER AND THE GEOTHERMAL STEAM ACT OF 1970 *** SHALL BE PAID INTO THE TREASURY OF THE UNITED STATES; 50 PER CENTUM THEREOF SHALL BE PAID BY THE SECRETARY OF THE TREASURY TO THE STATE OTHER THAN ALASKA WITHIN THE BOUNDARIES OF WHICH THE LEASED LANDS OR DEPOSITS ARE OR WERE LOCATED; *** TO BE USED BY SUCH STATE AND ITS SUBDIVISIONS, AS THE LEGISLATURE OF THE STATE MAY DIRECT GIVING PRIORITY TO THOSE SUBDIVISIONS OF THE STATE SOCIALLY OR ECONOMICALLY IMPACTED BY DEVELOPMENT OF MINERALS LEASED UNDER THIS CHAPTER, FOR (I) PLANNING, (II) CONSTRUCTION AND MAINTENANCE OF PUBLIC FACILITIES, AND (III) PROVISION OF PUBLIC SERVICE ***."

RELEVANT PROVISIONS OF THE UTAH CODE PROVIDE FOR THE DEPOSIT OF FEDERAL MINERAL LEASE MONIES INTO A SPECIAL ACCOUNT WITHIN THE GENERAL FUND, FROM WHICH THE STATE LEGISLATURE IS TO MAKE APPROPRIATIONS CONSISTENT WITH 30 U.S.C. SEC. 191 FOR THE ALLEVIATION OF THE IMPACTS OF NATURAL RESOURCE DEVELOPMENT. UTAH CODE ANN. SECS. 65-1-64(9), 65-1 64.5 (HEREINAFTER "CODE"). TO FURTHER THIS PURPOSE, THE STATE HAS CREATED A PERMANENT COMMUNITY IMPACT FUND INTO WHICH IT DIRECTLY APPROPRIATES A FIXED PORTION OF THE MINERAL LEASE FUNDS, CODE, SECS. 65 1-64.5(3)(A), 63-52-1.5, AND AN IMPACT BOARD WHICH, AMONG OTHER THINGS, MAKES GRANTS AND LOANS FROM THE FUND "TO STATE AGENCIES AND TO SUBDIVISIONS WHICH ARE OR MAY BE SOCIALLY OR ECONOMICALLY IMPACTED, DIRECTLY OR INDIRECTLY, BY MINERAL RESOURCE DEVELOPMENT FOR: (A) PLANNING; (B) CONSTRUCTION AND MAINTENANCE OF PUBLIC FACILITIES; AND (C) PROVISION OF PUBLIC SERVICES." CODE, SEC. 63-52- 3(1).

THE STATE ALSO HAS ENACTED THE "INTERLOCAL CO-OPERATION ACT", WHICH AUTHORIZES LOCAL GOVERNMENTAL UNITS TO ACT JOINTLY TO PROVIDE SERVICES AND FACILITIES ECONOMICALLY AND "FOR THE OVERALL PROMOTION OF THE GENERAL WELFARE OF THE STATE." CODE, SEC. 11-13-2. SERVICES AND FACILITIES MAY BE PROVIDED FOR, AMONG OTHERS, EDUCATION, HEALTH CARE, AND STREETS OR ROADS, CODE, SEC. 11-13-3(6). UNDER THIS ACT, ANY TWO OR MORE PUBLIC AGENCIES MAY AGREE TO CREATE A SEPARATE LEGAL OR ADMINISTRATIVE ENTITY TO ACCOMPLISH THE PURPOSE OF THEIR JOINT OR COOPERATIVE ACTION, AND SUCH ENTITY "IS DEEMED A POLITICAL SUBDIVISION OF THE STATE." CODE, SEC. 11-13 -5.5(1). WE HAVE BEEN ADVISED INFORMALLY BY YOUR STAFF THAT A NUMBER OF SUCH ENTITIES HAVE BEEN CREATED, ARE CALLED "ASSOCIATIONS OF GOVERNMENT," AND ARE ADMINISTERED BY GOVERNING BOARDS WHICH CONSIST GENERALLY OF THE MAYORS AND COMMISSIONERS FROM THE CITIES AND COUNTIES THAT ARE MEMBERS OF THE ASSOCIATION.

DISCUSSION

THE FIRST QUESTION IN YOUR LETTER IS:

"1. MAY A COUNTY RECEIVE FEDERAL MINERAL LEASE MONIES WITHOUT A LOSS OF PILT IF FEDERAL LEASE MONIES ARE FIRST DISTRIBUTED TO THE STATE AND FROM THE STATE TO THE COUNTIES WITH THE STATE PRESCRIBING THE USE TO WHICH THESE MONIES MAY BE EMPLOYED?"

IN 58 COMP.GEN. 19 (1978), THE OPINION REFERRED TO IN YOUR LETTER, WE WERE NOT CONCERNED WITH WHETHER THE FUNDS RECEIVED BY LOCAL GOVERNMENT UNITS FROM THE STATE UNDER THE PAYMENT LAWS SPECIFIED IN SECTION 6903(A) WERE TO BE USED FOR DISCRETIONARY OR STATE-MANDATED PURPOSES. RATHER, WE INTERPRETED "PAYMENTS RECEIVED BY" UNITS OF LOCAL GOVERNMENT AS FUNDS ACTUALLY RECEIVED AND AVAILABLE TO THE COUNTIES FOR OBLIGATION AND EXPENDITURE TO CARRY OUT THE COUNTIES' OWN RESPONSIBILITIES, THEREBY ALLEVIATING THE FISCAL BURDENS IMPOSED ON LOCAL GOVERNMENTAL UNITS BY THE PRESENCE OF TAX-EXEMPT FEDERAL LANDS WITHIN THEIR JURISDICTIONS. ACCORDINGLY CONCLUDED THAT CONGRESS DID NOT INTEND THAT PAYMENTS TO LOCAL GOVERNMENTS UNDER THE ACT BE REDUCED BY AMOUNTS WHICH, BY VIRTUE OF STATE LAW, MERELY PASS THROUGH THESE GOVERNMENTS ON THE WAY TO POLITICALLY AND FINANCIALLY INDEPENDENT SCHOOL OR SINGLE-PURPOSE DISTRICTS WHICH ARE ALONE RESPONSIBLE FOR PROVIDING THE SERVICES IN QUESTION. SUCH PAYMENTS ARE NOT MEANINGFULLY RECEIVED BY LOCAL GOVERNMENTS, WHICH WOULD BE ACTING SOLELY AS "CONDUITS" FOR THE FUNDS. THIS IS THE ONLY EXCEPTION TO THE DEDUCTION REQUIREMENT OF SECTION 6903(B) WHICH WE RECOGNIZED.

AS INDICATED ABOVE, UTAH LAW DOES NOT MANDATE THAT MINERAL LEASE FUNDS BE PASSED ON BY THE COUNTIES TO POLITICALLY AND FINANCIALLY INDEPENDENT GOVERNMENTAL ENTITIES. RATHER, IN PRESCRIBING THE DUTIES OF THE IMPACT BOARD IN DISTRIBUTING THE FUNDS (CODE, SEC. 65-52-3(1)), IT OUTLINES THE PRIORITY USES TO BE MADE OF THE FUNDS, IN LANGUAGE THAT PARALLELS THE MINERAL LANDS LEASING ACT, 30 U.S.C. SEC. 191. THE BROAD LANGUAGE IN BOTH THE FEDERAL AND STATE STATUTES LEAVES ROOM FOR MUCH DISCRETION IN HOW THE COUNTIES MAKE USE OF THE FUNDS.

THE ISSUE RAISED IN YOUR FIRST QUESTION WAS ADDRESSED IN OUR OPINION B-214267, AUGUST 28, 1984. IN THAT CASE, A COUNTY HAD ARGUED THAT CERTAIN MINERAL LEASE FUNDS IT RECEIVED FROM THE STATE WERE "NON DISCRETIONARY SPECIAL PURPOSE" FUNDS, AND SHOULD NOT BE DEDUCTED FROM ITS PILT PAYMENTS. WE DISAGREED ON THE GROUND THAT THERE IS NOTHING IN THE LEGISLATIVE HISTORY OF PILT THAT DISTINGUISHES BETWEEN DISCRETIONARY AND NON-DISCRETIONARY STATE DISTRIBUTIONS TO COUNTIES OF SECTION 6903(A) FUNDS TO BE USED TO CARRY OUT COUNTY RESPONSIBILITIES. WE STATED:

"AS LONG AS SECTION 6903(A) FUNDS ARE GIVEN TO A COUNTY TO CARRY OUT THE COUNTY'S OWN RESPONSIBILITIES, THEY ARE FUNDS SUBJECT TO THE DEDUCTION PROVISION OF THE PILT PAYMENT FORMULAE, EVEN THOUGH THE COUNTY MAY HAVE NO DISCRETION AS TO THE PROGRAMS FOR WHICH THEY MUST BE USED." ID., P. 4.

IN OUR VIEW, THIS STATEMENT IS EQUALLY APPLICABLE HERE, AND THEREFORE THE ANSWER TO YOUR FIRST QUESTION IS THAT IF A COUNTY RECEIVED FEDERAL MINERAL LEASE FUNDS FOR CARRYING OUT FUNCTIONS OR ACTIVITIES THAT IT WOULD OTHERWISE PROVIDE AND PAY FOR WITH COUNTY REVENUES, THEN, REGARDLESS OF WHETHER THE STATE HAS PRESCRIBED THESE USES, THE MINERAL LEASE FUNDS MUST BE DEDUCTED FROM THE COUNTY'S PILT FUNDS.

YOUR SECOND QUESTION IS:

"2. IS IT POSSIBLE FOR MULTI-COUNTY ASSOCIATIONS OF LOCAL GOVERNMENT TO RECEIVE FEDERAL MINERAL LEASE DISBURSEMENTS FROM THE STATE WITH OR WITHOUT A PRESCRIPTION FROM THE LEGISLATURE AS TO THE USE OF THE FUNDS?"

AS NOTED IN THE QUOTED PORTION OF THE MINERAL LANDS LEASING ACT, ABOVE, THESE FUNDS ARE TO BE USED BY THE STATE AND ITS SUBDIVISIONS AS DIRECTED BY THE STATE LEGISLATURE, IN ACCORDANCE WITH STATUTORY PRIORITIES CONCERNING THE IMPACTS OF MINERAL DEVELOPMENT. THE UTAH LEGISLATURE HAS DIRECTED THAT THE FUNDS ARE TO BE USED TO ALLEVIATE IMPACTS IN THE STATE RESULTING FROM THE DEVELOPMENT OF NATURAL RESOURCES COVERED BY THE ACT, AND THAT THE IMPACT BOARD WHICH IT ESTABLISHED TO DISTRIBUTE THE FUNDS IS TO DO SO TO AFFECTED STATE AGENCIES AND SUBDIVISIONS. CODE, SECS. 63-52-1 AND 63-52-3.

THE INTERLOCAL CO-OPERATION ACT AUTHORIZES THE CREATION OF SEPARATE LEGAL OR ADMINISTRATIVE ENTITIES TO CARRY OUT AGREEMENTS ENTERED INTO BY TWO OR MORE COUNTIES OR OTHER PUBLIC AGENCIES FOR THE PURPOSE OF ECONOMICALLY PROVIDING SERVICES AND FACILITIES NEEDED BY ALL THE PARTIES TO THE AGREEMENT. (THESE AGREEMENTS CAN, OF COURSE, INCLUDE JOINT ACTIONS, TO PROVIDE THE SERVICES ENUMERATED IN THE ACT, THAT WILL BEST ALLEVIATE THE PARTICULAR IMPACTS OF NATURAL RESOURCE DEVELOPMENT AFFECTING THE PARTIES.) BY LAW THESE ENTITIES, COMMONLY KNOWN AS "ASSOCIATIONS OF GOVERNMENT," ARE DEEMED POLITICAL SUBDIVISIONS OF THE STATE, AND HAVE MANY OF THE POWERS EXERCISED BY THEIR CONSTITUENT MEMBERS. CODE, SEC. 11-13- 5.5. SINCE THESE ASSOCIATIONS ARE LEGAL SUBDIVISIONS OF THE STATE, AND THE STATE HAS AUTHORIZED DISTRIBUTIONS TO THEM OF FEDERAL MINERAL LEASE MONIES, SUCH DISTRIBUTIONS ARE IN COMPLIANCE WITH BOTH FEDERAL AND STATE LAW, WITH OR WITHOUT A LEGISLATIVE PRESCRIPTION AS TO THE SPECIFIC USE OF THE FUNDS.

YOUR FINAL QUESTION IS:

"3. IF IT IS POSSIBLE FOR MULTI-COUNTY ASSOCIATIONS TO RECEIVE LEASE MONIES, WOULD THERE BE ANY PENALTY TO A MEMBER JURISDICTION WHO IS A PILT RECIPIENT?"

AS NOTED ABOVE, ASSOCIATIONS OF GOVERNMENT HAVE BEEN CREATED IN THE STATE, AND ARE ADMINISTERED BY GOVERNING BOARDS CONSISTING GENERALLY OF THE MAYORS AND COMMISSIONERS FROM THE CITIES AND COUNTIES PARTICIPATING IN THE ASSOCIATION. TO THE EXTENT THAT THE GOVERNING BOARD UTILIZES MINERAL LEASE RECEIPTS TO PAY FOR PROVIDING SERVICES OR FACILITIES THAT BENEFIT THE COUNTY MEMBERS, AND THEREBY RELIEVES THEM FROM CARRYING OUT COUNTY RESPONSIBILITIES THAT WOULD OTHERWISE HAVE BEEN PAID FOR WITH COUNTY REVENUES, IN OUR VIEW, AND CONSISTENT WITH 58 COMP.GEN. 19, SUPRA, EACH COUNTY'S PILT RECEIPTS SHOULD BE REDUCED BY AN AMOUNT THAT REFLECTS ITS PRO RATA SHARE OF THESE MINERAL LEASE MONIES. THIS IS SO WHETHER THE MINERAL LEASE FUNDS ARE PASSED ON BY THE ASSOCIATION TO ONE OR MORE MEMBER COUNTIES, OR WHETHER THE FUNDS ARE RETAINED BY THE ASSOCIATION AND SPENT FOR PURPOSES BENEFITING ITS MEMBERS.

IN A REPORT PROVIDED US BY THE DEPARTMENT OF THE INTERIOR, THE SOLICITOR NOTED THAT "IF THE FUNDS WERE RETAINED BY THE ASSOCIATION, AND SPENT FOR GENERAL ASSOCIATION PURPOSES, NOT DIRECTLY BENEFITING THE PUBLIC, THERE WOULD BE NO DEDUCTION FROM PILT." THE PURPOSE OF THE INTERLOCAL CO- OPERATION ACT IS BROADER THAN THAT OF THE MINERAL LANDS LEASING ACT, SINCE THE FORMER AUTHORIZES COOPERATIVE EFFORTS TO PROVIDE SERVICES AND FACILITIES IN WAYS THAT "WILL ACCORD BEST WITH GEOGRAPHIC, ECONOMIC, POPULATION AND OTHER FACTORS INFLUENCING THE NEEDS AND DEVELOPMENT OF LOCAL COMMUNITIES AND TO PROVIDE THE BENEFIT OF ECONOMY OF SCALE, ECONOMIC DEVELOPMENT AND UTILIZATION OF NATURAL RESOURCES FOR THE OVERALL PROMOTION OF THE GENERAL WELFARE OF THE STATE." CODE, SEC. 11-13-2.

CONCEIVABLY, AN ASSOCIATION COULD AUTHORIZE A PROJECT THAT WOULD COMPLY WITH THIS BROAD PURPOSE, AND WITH THE FEDERAL STATUTE, YET WOULD NOT BENEFIT ITS COUNTY MEMBERS BY RELIEVING THEM OF COUNTY RESPONSIBILITIES. HOWEVER, GIVEN THE LIST OF ALLOWABLE SERVICES AND FACILITIES IN THE INTERLOCAL CO-OPERATION ACT, WE FIND IT DIFFICULT TO SEE HOW AN APPROVED PROJECT COULD BE IN COMPLIANCE BUT NOT DIRECTLY BENEFIT THE PUBLIC. CODE, SEC. 11-13-3(6). NEVERTHELESS, SHOULD AN ASSOCIATION OF GOVERNMENT USE MINERAL LEASE MONIES TO FUND SUCH A PROJECT, THIS EXPENDITURE WOULD NOT HAVE TO BE DEDUCTED FROM THE COUNTIES' SHARES OF PILT RECEIPTS. EXPENDITURE OF THIS NATURE WOULD BE, IN THE WORDS OF THE SOLICITOR, "THE SAME AS IF THE STATE HAD RETAINED AND ITSELF EXPENDED THE MONIES WITH NO PASS-THROUGH TO THE UNITS OF LOCAL GOVERNMENT." WITH THE EXCEPTION OF PROJECTS OF THIS NATURE, HOWEVER, ASSOCIATION EXPENDITURES OF MINERAL LEASE MONIES GENERALLY WILL PROVIDE SERVICES FOR WHICH THE COUNTIES OTHERWISE WOULD BE FINANCIALLY RESPONSIBLE, AND THEREFORE, ARE REQUIRED TO BE DEDUCTED FROM THOSE COUNTIES' PILT PAYMENTS, ON A PRO RATA BASIS. CONCLUSION

ON THE BASIS OF OUR REVIEW OF THE LEGISLATIVE HISTORY OF PILT, OUR PRIOR DECISIONS, THE FORMAL VIEWS OF THE DEPARTMENT OF THE INTERIOR, AND THE RELEVANT FEDERAL AND UTAH STATUTORY PROVISIONS, WE CONCLUDE THAT (1) FEDERAL MINERAL LEASE MONIES DISTRIBUTED TO A COUNTY, AND USED BY THE COUNTY TO CARRY OUT FUNCTIONS THAT IT WOULD OTHERWISE PROVIDE AND PAY FOR WITH COUNTY REVENUES, MUST BE DEDUCTED FROM THE COUNTY'S PILT PAYMENTS; (2) MULTICOUNTY ASSOCIATIONS OF LOCAL GOVERNMENT, CREATED IN ACCORDANCE WITH STATE LAW, CAN RECEIVE STATE DISTRIBUTIONS OF FEDERAL MINERAL LEASE FUNDS; (3) AS WITH DIRECT COUNTY RECEIPTS OF STATE DISTRIBUTIONS OF MINERAL LEASE MONIES, ASSOCIATION EXPENDITURES OF SUCH MONIES TO PROVIDE SERVICES FOR THEIR MEMBERS WHICH OTHERWISE WOULD BE PROVIDED BY COUNTY MEMBERS WITH COUNTY REVENUES, MUST BE DEDUCTED FROM THE COUNTIES' PILT PAYMENTS ON A PRO RATA BASIS.

IN ACCORDANCE WITH OUR USUAL PROCEDURES, AND WITH THE AGREEMENT OF MR. SAM KLEMM OF YOUR STAFF, COPIES OF THIS OPINION WILL BE MADE AVAILABLE UPON REQUEST TO INTERESTED PARTIES 30 DAYS AFTER IT IS ISSUED.

WE HOPE THIS INFORMATION IS USEFUL TO YOU.

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