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MINUTES OF THE SENATE BUSINESS & LABOR
STANDING COMMITTEE
THURSDAY, FEBRUARY 9, 2006, 4:OO P.M.
ROOM W015, WEST OFFICE BUILDING
STATE CAPITOL COMPLEX


Members Present:    Sen. Scott K. Jenkins, Chair
        Sen. Gene Davis
        Sen. Thomas V. Hatch
        Sen. Parley G. Hellewell
        Sen. John W. Hickman
        Sen. Sheldon L. Killpack
        Sen. Ed Mayne
        Sen. Michael Waddoups

Members Absent:    Sen. L. Alma Mansell

Staff Present:    John Cannon, Managing Policy Analyst
        Karen Allred, Committee Secretary

Public Speakers Present:    Bruce Olson, Attorney, Nonprofit Community
        Diane Hartz Warsoff, Executive Director, Utah Nonprofits Association         Jeff Mitchell, President, Telemarketers Anonymous
        Mike Sonntag, Bear River Insurance
        Mickey Braun, Assistant Commissioner, Utah Insurance Department
        Kenneth Robertson, Housing and Transport Specialist
        Paul Smith, Exec. Dir., Utah Apartment Association
        Rob Jeppson, Salt Lake County Mayor's Office
        Heather Tritten, Utah Community Action Partnership
        Tara Rollins, Executive Director, Utah Housing Coalition
        Chris Kyler, CEO, Utah Association of Realtors
        Tim Funk, Housing Director, Crossroads Urban Center
        Steve Erickson, Utah Issues
        

A list of visitors and a copy of handouts are filed with the committee minutes.

Chair Jenkins called the meeting to order at 4:05 p.m.

Approval of Minutes

    MOTION:
Sen. Hickman moved to approve the minutes of the February 8, 2006 meeting.


    The motion passed unanimously with Sens. Hatch, Killpack, Davis and Mayne absent for the     vote.

1.    S.B. 84 Nonprofil entity Amendments (L. Hillyard)

    
Sen. Hillyard explained the bill.

    
Bruce Olson Attorney, Nonprofit Community, clarified and spoke in support of the bill.

    Diand Hartz Warsoff, Exec. Dir., Utah Nonprofits Association, spoke in support of the bill.

     MOTION: Sen. Hatch moved to pass the bill out favorably.

    The motion passed unanimously with Sen. Killpack absent for the vote.

2.    S.B. 90 Homeowners Association Provisions (J. Hickman)

    
Sen. Hickman introduced the bill.

    MOTION:
Sen. Waddoups moved to pass the bill out favorably.

    The motion passed unanimously.

3.    S.B. 203 Telephone Solicitation Amendments
(P. Hellewell)

     MOTION: Sen. Hellewell moved to adopt 1stSub. S.B. 203.

    Jeff Mitchell, President, Telemarketers Anonymous, clarified the bill and distributed a     handout.

     MOTION: Sen. Hatch moved to proceed to the next item on the agenda.

    The motion passed unanimously.
    
4.     H.B. 242 Motorboat Liability Insurance Amendments (K. Gibson)

    
Rep. Gibson introduced the bill.

    Mike Sonntag, Bear River Insurance, answered questions from the committee.


     MOTION: Sen. Killpack moved to pass the bill out favorably.

    
The motion passed with Sen. Hickman voting in opposition to the bill and Sens. Hellewell     and Mayne absent for the vote.

5.    H.B. 233 Insurance Licensing Amendments (J. Dunnigan)
        
    Rep. Dunnigan introduced the bill and the following amendments were distributed:
    

1.    Page 15, Line 461 through Page 16, Line 466 :    

             461          [(7)] (8)
  (a)       A person licensed to practice law in Utah is exempt from the requirements of

             462      Subsections [(1) and] (2) and (3) if that person issues 12 or less policies in any 12-month
             463      period.
  (b) In determining the number of policies issued by a person licensed to practice law in Utah for purposes of Subsection (8)(a), if the person licensed to practice law in Utah issues a policy to more than one party to the same closing, the person is considered to have issued only one policy.      

             464          [(8)] (9) A person licensed to practice law in Utah, whether exempt under Subsection
             465      [(7)] (8) or not, shall maintain a trust account separate from a law firm trust account for all title
             466      and real estate escrow transactions.

     MOTION: Sen. Hatch moved to adopt the amendments.

    The motion passed unanimously with Sens. Hellewell and Mayne absent for the vote.

    Mickey Braun, Assistant Commissioner, Dept .of Insurance, spoke in support of the bill.

     MOTION: Sen. Hatch moved to pass the bill out favorably as amended.

    The motion passed with Sens. Hellewell, Hickman and Mayne absent for the vote.

6.    H.B. 250 Local Governments Restrictions on Limiting Certain Fees (G. Hughes)


    Rep. Hughes introduced the bill.

    Sen. Waddoups declared a conflict of interest.

    Paul Smith, Landlord, Utah Apartment Association, and Chris Kyler, CEO, Utah Association     of Realtors, spoke in support of the bill.

    Speaking in opposition to the bill were:

        Jill Riddle, Housing Authority of Salt Lake
        Kenneth Robertson, Housing and Transport Specialist
        Rob Jeppson, Salt Lake County Mayor's Office
        Heather Tritten, Utah Community Action Partnership
        Tara Rollins, Executive Director, Utah Housing Coalition
        Tim Funk, Housing Director, Crossroads Urban Center
        Steve Erickson, Utah Issues
        
     MOTION: Sen. Davis moved to amend the bill as follows:

     57-20-1. Rent and fee control prohibition.

    
(1) A county [or incorporated], city or town may not enact an ordinance or resolution
        that would control rents or fees on private residential property unless it has the
        express approval of the Legislature.
     (2)    This section does not impair the right of a state agency, county, [or incorporated]
        city, or town to enforce its zoning, building, and planning authority.
     (3)    This section does not impair the right of a county, city or town to enact an
        ordinance or resolution limiting rental application fees which are charged to
        prospective tenants, provided
:
            (a)    the ordinance permits application fees of less that $35.00; or
            (b)    the ordinance permits application fee charges which reasonably represent the actual incremental cost of processing the rental application; or
            (c)    the ordinance prohibits charging a rental application fee to prospective tenants who receive government assistance.


     SUBSTITUTE MOTION: Sen. Waddoups proposed the following amendment:

     57-20-1. Rent and fee control prohibition.

    
(1) A county [or incorporated], city or town may not enact an ordinance or resolution


        that would control rents or fees on private residential property unless it has the
        express approval of the Legislature.
     (2)    This section does not impair the right of a state agency, county, [or incorporated]
        city, or town to enforce its zoning, building, and planning authority.
     (3)    This section does not impair the right of a county, city or town to enact an
        ordinance or resolution limiting rental application fees which are charged to
        prospective tenants, provided
:
            (a)    the ordinance permits application fees of less that $35.00; or
            (b)    the ordinance permits application fee charges which reasonably represent the actual incremental cost of processing the rental application
.
            

    The substitute motion failed with Sens. Hatch, Davis and Mayne voting in favor of the     motion and Sens. Jenkins, Hellewell, Hickman, Killpack and Waddoups voting in opposition.

    The original motion failed with Sens. Davis and Mayne voting in favor of the motion and     Sens. Jenkins, Hatch, Hellewell, Hickman, Killpack and Waddoups voting in opposition.

     MOTION: Sen. Hickman moved to pass the bill out favorably.

    The motion passed with Sens. Davis and Mayne voting in opposition..

7.    H.B. 315 Real Estate Amendments (G. Snow)

    
Rep. Snow introduced the bill.

    The following amendments were distributed:


1.    Page 1, Lines 12 through 15 :    

             12          This bill:
 

.    modifies exemptions for persons or transactions;  

             13          .    permits a member of the Real Estate Commission to serve two consecutive terms;
 

.    modifies limit on the amount of a civil penalty;  

             14          .    modifies grounds for disciplinary action; and
             15          .    makes technical changes.

2.    Page 1, Lines 21 through 22 :    


             21      AMENDS:
  61-2-3, as last amended by Chapter 102, Laws of Utah 1996      

             22          61-2-5.5, as last amended by Chapters 199 and 257, Laws of Utah 2005

3.    Page 1, Line 25 :    

             25      Be it enacted by the Legislature of the state of Utah:
    
  Section 1. Section 61-2-3 is amended to read:      

     61-2-3 .   Exempt persons and transactions.
         (1) (a) Except as provided in Subsection (1)(b), a license under this chapter is not required for:
         (i) any person who as owner or lessor performs the acts described in Subsection 61-2-2 (12) with reference to property owned or leased by that person;
         (ii) a regular salaried employee of the owner or lessor of real estate who, with reference to nonresidential real estate owned or leased by the employer, performs the acts enumerated in Subsections 61-2-2 (12)(a) and (b);
         (iii) a regular salaried employee of the owner of real estate who performs property management services with reference to real estate owned by the employer, except that the employee may only manage property for one employer;
         (iv) a person who performs property management services for the apartments at which that person resides in exchange for free or reduced rent on that person's apartment;
         (v) a regular salaried employee of a condominium homeowners' association who manages real property subject to the declaration of condominium that established the homeowners' association, except that the employee may only manage property for one condominium homeowners' association; and
         (vi) a regular salaried employee of a licensed property management company who performs support services, as prescribed by rule, for the property management company.
         (b) Subsection (1)(a) does not exempt from licensing:
         (i) employees engaged in the sale of properties regulated under
  :


    (A)  
    
Title 57, Chapter 11, Utah Uniform Land Sales Practices Act        ;       and

    
  (B)       Title 57, Chapter 19, Timeshare and Camp Resort Act;

         (ii) employees engaged in the sale of cooperative interests regulated under Title 57, Chapter 23, Real Estate Cooperative Marketing Act; or
         (iii) any person whose interest as an owner or lessor was obtained by
{   him   }        that person       or transferred to      {   him   }        that person       for the purpose of evading the application of this chapter, and not for any other legitimate business reason.

         (2) A license under this chapter is not required for:
         (a) isolated transactions by persons holding a duly executed power of attorney from the owner;
         (b) services rendered by an attorney at law in performing
{   his   }        the attorney at law's       duties as an attorney at law;

         (c) a receiver, trustee in bankruptcy, administrator, executor, or any person acting under order of any court;
         (d) a trustee or its employees under a deed of trust or a will; or
         (e) any public utility, its officers, or regular salaried employees, unless performance of any of the acts set out in Subsection 61-2-2 (12) is in connection with the sale, purchase, lease, or other disposition of real estate or investment in real estate unrelated to the principal business activity of that public utility.
         (3)
{   (a) Except as provided in Subsection (3)(b), a   }        A       license under this chapter is not required for any person registered to act as a broker-dealer, agent, or investment advisor under the Utah and federal securities laws in the sale or the offer for sale of real estate if:

        
  (a)       (i) the real estate is a necessary element of a "security" as that term is defined by the Securities Act of 1933 and the Securities Exchange Act of 1934; and

         (ii) the security is registered for sale
  :

    (A)  
pursuant to the Securities Act of 1933        ;       or

    
  (B)       by Title 61, Chapter 1, Utah Uniform Securities Act      {   .   }        ; or

    (b) (i) it is a transaction in a security for which a Form D, described in 17 C.F.R. Sec. 239.500, has been filed with the Securities and Exchange Commission pursuant to Regulation D, Rule 506, 17 C.F.R. Sec. 230.506; and


    (ii) the selling agent and the purchaser are not residents of this state.  

        
{   (b) The exemption in Subsection (3)(a) does not apply to exempt or resale transactions.   }

     Renumber remaining sections accordingly.

4.    Page 4, Lines 112 through 117 :    

             112      subpoena is considered as a separate violation of this chapter. The commission, with the
             113      concurrence of the director, may impose a civil penalty in an amount not to exceed
{   $500   }        $2,500       per

             114      violation, impose educational requirements, and suspend, revoke, place on probation, or deny
             115      renewal, reinstatement, or reissuance of any license or any certification if at any time the
             116      licensee or certificate holder, whether acting as an agent or on his own account, is found guilty
             117      of:
    
     MOTION: Sen. Hatch moved to adopt the amendments.

    The motion passed unanimously.

     MOTION: Sen. Davis moved to pass the bill out favorably as amended.

    The motion passed unanimously.
    
     MOTION: Sen. Hickman moved to adjourn.

    The motion passed unanimously at 6:00 p.m.





                ________________________________
                Sen. Scott K. Jenkins, Committee Chair