H.B. 118

1

QUASI-GOVERNMENTAL ENTITIES
2 AMENDMENTS
3 2000 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: David Ure
6 AN ACT RELATING TO STATE AFFAIRS; AMENDING DEFINITIONS; CREATING THE
7 LEGISLATIVE QUASI-GOVERNMENTAL ENTITIES COMMITTEE; ESTABLISHING
8 DUTIES OF THAT COMMITTEE; PROVIDING A PROCESS FOR REVIEWING THE
9 CREATION OF A QUASI-GOVERNMENTAL ENTITY; REMOVING REFERENCES TO THE
10 LEGISLATIVE RETIREMENT COMMITTEE; AND MAKING TECHNICAL CHANGES.
11 This act affects sections of Utah Code Annotated 1953 as follows:
12 AMENDS:
13 49-1-201, as last amended by Chapter 231, Laws of Utah 1996
14 63-55b-163, as renumbered and amended by Chapter 21, Laws of Utah 1999
15 63-95-101, as enacted by Chapter 152, Laws of Utah 1998
16 63-95-102, as last amended by Chapter 76, Laws of Utah 1999
17 ENACTS:
18 63-95-201, Utah Code Annotated 1953
19 63-95-202, Utah Code Annotated 1953
20 63-95-301, Utah Code Annotated 1953
21 63-95-302, Utah Code Annotated 1953
22 RENUMBERS AND AMENDS:
23 63-95-401, (Renumbered from 63-95-103, as enacted by Chapter 152, Laws of Utah 1998)
24 63-95-402, (Renumbered from 63-95-104, as enacted by Chapter 152, Laws of Utah 1998)
25 63-95-403, (Renumbered from 63-95-105, as enacted by Chapter 152, Laws of Utah 1998)
26 Be it enacted by the Legislature of the state of Utah:
27 Section 1. Section 49-1-201 is amended to read:

28 49-1-201. Establishment of retirement office -- An independent state agency --
29 Adoption of programs and policies.
30 (1) There is established the Utah State Retirement Office. The office shall administer the
31 state retirement systems and perform all other functions assigned to it by law.
32 (2) The office is an independent state agency. It is subject to legislative and executive
33 department budgetary examination and comment.
34 (3) The office shall be housed in Salt Lake City, but branches of the office may be
35 established in other areas of the state upon approval of the board.
36 (4) (a) The board is exempt from those acts which are applicable to state and other
37 governmental entities under this code. [However,]
38 (b) Notwithstanding Subsection (4)(a), the board shall:
39 (i) adopt, where not in conflict with its trust and fiduciary responsibilities or other law,
40 rules governing the operation of the retirement office [which] that are substantially similar to those
41 governing other public agencies; and [shall]
42 (ii) report [these] the rules[,] and any amendments to [them,] the rules adopted under
43 Subsection (4)(b)(i) to the Legislative [Retirement] Quasi-Governmental Entities Committee on
44 an annual basis or as otherwise requested by the Legislative Quasi-Governmental Entities
45 Committee.
46 Section 2. Section 63-55b-163 is amended to read:
47 63-55b-163. Repeal dates -- Title 63, Title 63D.
48 (1) Title 63, Chapter 95, Parts 2 and 3 are repealed July 1, 2004.
49 [(1)] (2) Sections 63-63b-101 and 63-63b-102 are repealed on July 1, 2002.
50 [(2) Section 63D-1-301.6 is repealed January 1, 1999.]
51 Section 3. Section 63-95-101 is amended to read:
52 CHAPTER 95. QUASI-GOVERNMENTAL ENTITIES ACT
53 Part 1. General Provisions
54 63-95-101. Title.
55 This chapter [shall be] is known as the "[Privatization of] Quasi-Governmental Entities
56 Act."
57 Section 4. Section 63-95-102 is amended to read:
58 63-95-102. Definitions.

59 For purposes of this chapter:
60 (1) "Asset" means property of all kind, real and personal, tangible and intangible, and
61 includes:
62 (a) cash, except reasonable compensation or salary for services rendered;
63 (b) stock or other investments;
64 (c) goodwill;
65 (d) real property;
66 (e) an ownership interest;
67 (f) a license;
68 (g) a cause of action; and
69 (h) any similar property.
70 (2) "Authorizing statutes" means the statutes creating an entity as a quasi-governmental
71 entity.
72 (3) "Business interest" means:
73 (a) holding the position of trustee, director, officer, or other similar position with a
74 business entity; or
75 (b) the ownership, either legally or equitably, of at least 10% of the outstanding shares of
76 a corporation or 10% interest in any other business entity, being held by:
77 (i) an individual;
78 (ii) the individual's spouse;
79 (iii) a minor child of the individual; or
80 (iv) any combination of Subsections (3)(b)(i) through (iii).
81 (4) "Committee" means the Legislative Quasi-Governmental Entities Committee created
82 in Section 63-95-201 .
83 (5) "Government requestor" means:
84 (a) the governor;
85 (b) an executive branch officer other than the governor;
86 (c) an executive branch agency;
87 (d) a legislator, including a legislative sponsor of legislation creating a quasi-governmental
88 entity; or
89 (e) a legislative committee.

90 [(4)] (6) "Interested party" means a person that held or holds the position of trustee,
91 director, officer, or other similar position with a quasi-governmental entity within:
92 (a) five years prior to the date of an action described in Subsection [(6)] (8); or
93 (b) during the privatization of a quasi-governmental entity.
94 [(5)] (7) "Lobbyist" is a person that provided or provides services as a lobbyist, as defined
95 in Section 36-11-102 , within:
96 (a) five years prior to the date of an action described in Subsection [(6)] (8); or
97 (b) during the privatization of a quasi-governmental entity.
98 [(6)] (8) (a) "Privatized" means an action described in Subsection [(6)] (8)(b) taken under
99 circumstances in which the operations of the quasi-governmental entity are continued by a
100 successor entity that:
101 (i) is privately owned;
102 (ii) is unaffiliated to the state; and
103 (iii) receives any asset of the quasi-governmental entity.
104 (b) An action referred to in Subsection [(6)] (8)(a) includes:
105 (i) the repeal of the authorizing statute of a quasi-governmental entity and the revision to
106 state laws to terminate the relationship between the state and the quasi-governmental entity;
107 (ii) the dissolution of the quasi-governmental entity;
108 (iii) the merger or consolidation of the quasi-governmental entity with another entity; or
109 (iv) the sale of all or substantially all of the assets of the quasi-governmental entity.
110 [(7)] (9) (a) "Quasi-governmental entity" means [the] an entity that:
111 (i) is created by the state or is given by the state the right to exist and conduct its affairs
112 as a quasi-governmental entity:
113 (A) to serve a public purpose; and
114 (B) to meet a need that cannot be met through a private business; and
115 (ii) is designated by the state as:
116 (A) an independent state agency;
117 (B) an independent public corporation;
118 (C) a quasi-public corporation; or
119 (D) a term similar to that described in Subsections (9)(a)(iv)(A) through (C).
120 (b) "Quasi-governmental entity" includes the:

121 [(a)] (i) Dairy Commission created in Title 4, Chapter 22, Dairy Promotion Act;
122 [(b)] (ii) Utah Technology Finance Corporation created in Title 9, Chapter 13, Utah
123 Technology and Small Business Finance Act;
124 [(c)] (iii) Heber Valley Railroad Authority created in Title 9, Chapter 3, Part 3, Heber
125 Valley Historic Railroad Authority;
126 [(d)] (iv) Utah Science Center Authority created in Title 9, Chapter 3, Part 4, Utah Science
127 Center Authority;
128 [(e)] (v) Utah Housing Finance Agency created in Title 9, Chapter 4, Part 9, Utah Housing
129 Finance Agency;
130 [(f)] (vi) Utah State Fair Corporation created in Title 9, Chapter 4, Part 11, Utah State Fair
131 Corporation Act;
132 [(g)] (vii) Workers' Compensation Fund of Utah created in Title 31A, Chapter 33,
133 Workers' Compensation Fund of Utah;
134 [(h)] (viii) Utah State Retirement Office created in Title 49, Chapter 1, Part 2, Retirement
135 Office and Board;
136 [(i)] (ix) School and Institutional Trust Lands Administration created in Title 53C, Chapter
137 1, Part 2, School and Institutional Trust Lands Administration; and
138 [(j) Crime Victims' Reparations Office created in Title 63, Chapter 25a, Part 4, Crime
139 Victims' Reparations Act; and]
140 [(k)] (x) Utah Communications Agency Network created in Title 63C, Chapter 7, Utah
141 Communications Agency Network Act.
142 (c) Notwithstanding Subsection (9)(a), "quasi-governmental entity" does not include:
143 (i) the Public Service Commission of Utah created in Section 54-1-1 ;
144 (ii) an institution within the state system of higher education;
145 (iii) a city, county, or town;
146 (iv) a local school district; or
147 (v) a special district created under the authority of Title 17A, Special Districts.
148 Section 5. Section 63-95-201 is enacted to read:
149 Part 2. Legislative Committee
150 63-95-201. Legislative Quasi-Governmental Entities Committee creation.
151 (1) There is created a Legislative Quasi-Governmental Entities Committee composed of

152 13 legislators appointed as follows:
153 (a) four senators, appointed by the president of the Senate, with at least one senator from
154 the minority party; and
155 (b) nine representatives, appointed by the speaker of the House of Representatives, with
156 at least two representatives from the minority party.
157 (2) (a) The president of the Senate shall designate one of the Senate appointees as a cochair
158 of the committee.
159 (b) The speaker of the House of Representatives shall designate one of the House of
160 Representatives appointees as a cochair of the committee.
161 (3) Committee members serve for two years, but may be reappointed by the speaker or the
162 president.
163 (4) The committee shall meet at least twice each year, but may meet more frequently if the
164 chairs determine that additional meetings are needed.
165 (5) In conducting all of its business, the committee shall comply with the rules of
166 legislative interim committees.
167 (6) The Office of Legislative Research and General Counsel shall provide staff services
168 to the committee.
169 (7) Salaries and expenses of legislative committee members shall be paid in accordance
170 with:
171 (a) Section 36-2-2 ; and
172 (b) Legislative Joint Rule 15.03.
173 Section 6. Section 63-95-202 is enacted to read:
174 63-95-202. Duties of the committee.
175 (1) The committee shall:
176 (a) study the scope of this chapter and determine what entities should be treated under this
177 chapter as quasi-governmental entities;
178 (b) study the provisions of the Utah Code that govern each quasi-governmental entity
179 including whether or not there should be consistency in these provisions;
180 (c) study what provisions of the Utah Code, if any, from which each quasi-governmental
181 entity should be exempted;
182 (d) study whether or not the state should receive services from or provide services to each

183 quasi-governmental entity;
184 (e) request and hear reports from each quasi-governmental entity;
185 (f) review the annual audit of each quasi-governmental entity that is performed in
186 accordance with the statutes governing the quasi-governmental entity;
187 (g) comply with Part 3, Creation of Quasi-Governmental Entity, in reviewing a proposal
188 to create a new quasi-governmental entity;
189 (h) if the committee recommends dissolution of a quasi-governmental entity as provided
190 in Subsection (2) and subject to Part 4, Privatization of Quasi-Governmental Entities, recommend
191 the appropriate method of dissolving the quasi-governmental entity;
192 (i) study the following concerning a private corporation that by statute is authorized to
193 provide services to the state to meet a public purpose, including the This is the Place Foundation,
194 with which the Division of Parks and Recreation is authorized in Section 63-11-3.2 to make an
195 agreement to manage, develop, and promote This is the Place State Park:
196 (i) whether or not a private corporation should be subject to this chapter;
197 (ii) whether or not the state should receive services from or provide services to the private
198 corporation;
199 (iii) reporting and audit requirements for the private corporation; and
200 (iv) the need, if any, to modify statutes related to the private corporation;
201 (j) study the following concerning an entity created by local agreement under Title 11,
202 Chapter 13, Interlocal Cooperation Act, if the state is a party to the agreement creating the entity:
203 (i) whether or not the entity should be subject to this chapter;
204 (ii) whether or not the state should receive services from or provide services to the entity;
205 (iii) reporting and audit requirements for the entity; and
206 (iv) the need, if any, to modify statutes related to the entity; and
207 (k) report annually to the Legislative Management Committee by no later than the
208 Legislative Management Committee's November meeting.
209 (2) The committee may:
210 (a) establish a form for any report required under Subsection (1);
211 (b) recommend to the Legislature that a quasi-governmental entity be dissolved;
212 (c) advise the Legislature concerning issues involving quasi-governmental entities; and
213 (d) study issues related to the implementation of Title 49, Utah State Retirement Act.

214 Section 7. Section 63-95-301 is enacted to read:
215 Part 3. Creation of a Quasi-Governmental Entity
216 63-95-301. Review by committee required for creating a quasi-governmental entity.
217 (1) If a government requestor proposes that the Legislature create a quasi-governmental
218 entity, that government requestor shall request that the committee review the proposal.
219 (2) After receiving a request for review under Subsection (1), the chairs of the committee:
220 (a) shall schedule a meeting of the committee to review the proposal; and
221 (b) may request information from executive and legislative branch entities and officers
222 concerning the proposal including:
223 (i) whether or not the proposed quasi-governmental entity should be exempt from any state
224 statute;
225 (ii) the need for oversight of the proposed quasi-governmental entity by an executive
226 branch agency;
227 (iii) the need for and requirements of audits of the proposed quasi-governmental entity;
228 (iv) the custody of the proposed quasi-governmental entity's funds;
229 (v) the legal representation of the proposed quasi-governmental entity;
230 (vi) whether or not the state should receive services from or provide services to the
231 proposed quasi-governmental entity; and
232 (vii) the legal liability, if any, to the state if the proposed quasi-governmental entity is
233 created.
234 (3) In requesting information from executive and legislative branch entities or officers
235 under Subsection (2), the committee should specifically consider seeking information from:
236 (a) the state auditor;
237 (b) the state treasurer;
238 (c) the attorney general;
239 (d) the risk manager; and
240 (e) the executive director of the Department of Administrative Services.
241 Section 8. Section 63-95-302 is enacted to read:
242 63-95-302. Recommendations of the committee.
243 After the committee has reviewed a proposal to create a quasi-governmental entity in
244 accordance with Section 63-95-301 , the committee shall make a report to the Legislature stating

245 whether the committee:
246 (1) recommends creation of the proposed quasi-governmental entity;
247 (2) recommends that the proposed quasi-governmental entity not be created; or
248 (3) makes no recommendation regarding the creation of the proposed quasi-governmental
249 entity.
250 Section 9. Section 63-95-401 , which is renumbered from Section 63-95-103 is renumbered
251 and amended to read:
252 Part 4. Privatization of Quasi-Governmental Entities
253 [63-95-103]. 63-95-401. Benefits to interested parties of a quasi-governmental
254 entity.
255 (1) If a quasi-governmental entity is privatized, the following may not receive any benefit
256 prohibited under Subsection (2):
257 (a) an interested party of the quasi-governmental entity;
258 (b) an entity in which an interested party holds a business interest;
259 (c) a lobbyist of the quasi-governmental entity; or
260 (d) an entity in which a lobbyist of the quasi-governmental entity holds a business interest.
261 (2) If a quasi-governmental entity is privatized:
262 (a) a person described in Subsection (1)(a) or (b) may not receive:
263 (i) compensation from a quasi-governmental entity that is conditioned in whole or in part
264 on:
265 (A) the passage, defeat, or amendment of legislative action related to privatization; or
266 (B) the approval, modification, or denial of an executive action related to privatization;
267 or
268 (ii) any asset of the quasi-governmental entity or its successor; and
269 (b) a person described in Subsection (1)(c) or (d) may not receive any:
270 (i) compensation that if received by the lobbyist would be in violation of Section
271 36-11-301 ; or
272 (ii) asset of the quasi-governmental entity or its successor.
273 Section 10. Section 63-95-402 , which is renumbered from Section 63-95-104 is
274 renumbered and amended to read:
275 [63-95-104]. 63-95-402. Privatization process -- Audit.

276 (1) If a quasi-governmental entity seeks to privatize the quasi-governmental entity, it shall:
277 (a) submit to the Legislature recommended legislation to:
278 (i) repeal the authorizing statute and revise state law as necessary to terminate its
279 relationship to the state; and
280 (ii) address the value of any interests the state holds in the quasi-governmental entity and
281 whether the state should receive compensation for those interests as part of privatization; and
282 (b) be audited by the state auditor:
283 (i) within one year prior to the effective date of legislation that repeals the authorizing
284 statute to terminate the relationship between the quasi-governmental entity and the state; and
285 (ii) to determine the amount, nature, and source of revenues and assets of the
286 quasi-governmental entity.
287 (2) The relationship between the state and a quasi-governmental entity may not be
288 terminated except by the repeal of the authorizing statute of the quasi-governmental entity.
289 Section 11. Section 63-95-403 , which is renumbered from Section 63-95-105 is
290 renumbered and amended to read:
291 [63-95-105]. 63-95-403. Penalties for violation.
292 (1) A person who knowingly violates this [chapter] part:
293 (a) is guilty of a third degree felony if the combined value of any compensation or assets
294 received by the person as a result of the violation is equal to or greater than $10,000; or
295 (b) is guilty of a class A misdemeanor if the combined value of any compensation or assets
296 received by the person as a result of the violation is less than $10,000.
297 (2) (a) In addition to any penalty imposed under Subsection (1), a person that violates this
298 [chapter] part shall return to the successor of the quasi-governmental entity any compensation or
299 assets received in violation of this [chapter] part.
300 (b) If the assets received by the person in violation of this [chapter] part are no longer in
301 the possession of the person, the person shall pay the successor of the quasi-governmental entity
302 an amount equal to the fair market value of the asset at the time the person received the asset.
303 (3) Notwithstanding Subsection 36-11-401 (3)(a), if a lobbyist violates Subsection
304 [ 63-95-103 ] 63-95-401 (2)(b)(i), the lobbyist is guilty the crime outlined in Subsection (1), which
305 crime shall be determined by the value of compensation or assets received by the lobbyist.

Legislative Review Note
as of 2-1-00 8:28 AM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel