H.B. 264

This document includes House Floor Amendments incorporated into the bill on Fri, Jan 26, 2007 at 2:30 PM by ddonat. --> 1

REVISOR'S STATUTE
2 2007 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Stephen H. Urquhart
5 Senate Sponsor: John W. Hickman
6
7 LONG TITLE
8 General Description:
9 This bill modifies parts of the Utah Code to make technical corrections including
10 eliminating references to repealed provisions, making minor wording changes, updating
11 cross references, and correcting numbering.
12 Highlighted Provisions:
13 This bill:
14 . modifies parts of the Utah Code to make technical corrections including eliminating
15 references to repealed provisions, making minor wording changes, updating cross
16 references, and correcting numbering.
17 Monies Appropriated in this Bill:
18 None
19 Other Special Clauses:
20 None
21 Utah Code Sections Affected:
22 AMENDS:
23 3-1-9, Utah Code Annotated 1953
24 3-1-17, Utah Code Annotated 1953
25 3-1-41, as last amended by Chapter 82, Laws of Utah 1997
26 7-1-104, as last amended by Chapter 267, Laws of Utah 1989
27 7-7-12, as last amended by Chapter 200, Laws of Utah 1994

28 10-8-2, as last amended by Chapters 136 and 254, Laws of Utah 2005
29 10-9a-801, as renumbered and amended by Chapter 254, Laws of Utah 2005
30 11-13-314, as enacted by Chapter 136, Laws of Utah 2005
31 13-5-9, as last amended by Chapter 23, Laws of Utah 1965
32 13-11a-3, as enacted by Chapter 205, Laws of Utah 1989
33 13-21-7, as enacted by Chapter 29, Laws of Utah 1985
34 16-6a-822, as last amended by Chapter 228, Laws of Utah 2006
35 17-27a-801, as renumbered and amended by Chapter 254, Laws of Utah 2005
36 17A-2-412, as last amended by Chapter 368, Laws of Utah 1998
37 23-13-1, as enacted by Chapter 46, Laws of Utah 1971
38 26-18-503, as enacted by Chapter 215, Laws of Utah 2004
39 26-34-2, as enacted by Chapter 276, Laws of Utah 1989
40 26-39-104, as last amended by Chapter 37, Laws of Utah 2006
41 31A-16-105, as repealed and reenacted by Chapter 258, Laws of Utah 1992
42 31A-17-402, as last amended by Chapter 186, Laws of Utah 2002
43 31A-26-210, as last amended by Chapter 204, Laws of Utah 1986
44 32A-13-103, as last amended by Chapter 185, Laws of Utah 2002
45 34-19-5, as enacted by Chapter 85, Laws of Utah 1969
46 35A-3-313, as last amended by Chapter 29, Laws of Utah 2004
47 36-26-102, as enacted by Chapter 362, Laws of Utah 2006
48 38-1-27, as last amended by Chapter 297, Laws of Utah 2006
49 38-2-3.2, as enacted by Chapter 62, Laws of Utah 1953
50 40-10-9, as enacted by Chapter 145, Laws of Utah 1979
51 41-3-408, as last amended by Chapter 175, Laws of Utah 1994
52 41-12a-305, as enacted by Chapter 242, Laws of Utah 1985
53 41-22-29, as last amended by Chapter 114, Laws of Utah 1999
54 49-12-203, as last amended by Chapter 143, Laws of Utah 2006
55 49-12-402, as last amended by Chapter 116, Laws of Utah 2005
56 49-13-203, as last amended by Chapter 143, Laws of Utah 2006
57 53A-1-706, as last amended by Chapter 88, Laws of Utah 2004
58 53A-2-120, as enacted by Chapter 234, Laws of Utah 2003

59 53A-2-213, as last amended by Chapter 119, Laws of Utah 1993
60 53A-8-105, as last amended by Chapter 324, Laws of Utah 1999
61 53A-17a-107, as last amended by Chapter 268, Laws of Utah 1994
62 53A-28-401, as enacted by Chapter 62, Laws of Utah 1996
63 53B-8a-108, as last amended by Chapter 109, Laws of Utah 2005
64 53C-1-201, as last amended by Chapter 139, Laws of Utah 2006
65 54-1-3, as last amended by Chapter 246, Laws of Utah 1983
66 54-4-8, as last amended by Chapter 265, Laws of Utah 1998
67 54-8-24, as enacted by Chapter 157, Laws of Utah 1969
68 54-9-103, as last amended by Chapter 105, Laws of Utah 2005
69 57-1-31.5, as enacted by Chapter 209, Laws of Utah 2002
70 57-2a-4, as enacted by Chapter 155, Laws of Utah 1988
71 57-2a-7, as last amended by Chapter 88, Laws of Utah 1989
72 57-12-2, as enacted by Chapter 24, Laws of Utah 1972
73 57-12-14, as enacted by Chapters 295 and 321, Laws of Utah 1998
74 H. [ 57-15-8.5, as enacted by Chapter 224, Laws of Utah 1981 ] .H
75 58-13-2, as last amended by Chapters 153 and 299, Laws of Utah 2005
76 58-17b-504, as enacted by Chapter 280, Laws of Utah 2004
77 58-61-307, as last amended by Chapter 281, Laws of Utah 2001
78 59-2-201, as last amended by Chapter 360, Laws of Utah 1997
79 59-2-1108, as last amended by Chapter 143, Laws of Utah 2003
80 59-2-1302, as last amended by Chapter 143, Laws of Utah 2003
81 59-2-1331, as last amended by Chapter 279, Laws of Utah 2006
82 59-2-1347, as last amended by Chapter 143, Laws of Utah 2003
83 59-7-605, as last amended by Chapters 108 and 294, Laws of Utah 2005
84 59-10-1009, as renumbered and amended by Chapter 223, Laws of Utah 2006
85 59-11-102, as renumbered and amended by Chapter 2, Laws of Utah 1987
86 59-13-204, as last amended by Chapter 232, Laws of Utah 2001
87 59-14-208, as renumbered and amended by Chapter 2, Laws of Utah 1987
88 59-22-304, as renumbered and amended by Chapter 229, Laws of Utah 2000
89 59-22-307, as renumbered and amended by Chapter 229, Laws of Utah 2000

90 61-2b-25, as last amended by Chapter 117, Laws of Utah 1999
91 62A-4a-107, as last amended by Chapter 75, Laws of Utah 2006
92 63-11-1, Utah Code Annotated 1953
93 63-30d-203, as enacted by Chapter 267, Laws of Utah 2004
94 63-38f-501, as last amended by Chapter 223, Laws of Utah 2006
95 63-46b-3, as last amended by Chapter 162, Laws of Utah 2006
96 63-46b-8, as last amended by Chapter 72, Laws of Utah 1988
97 63-55-259, as last amended by Chapters 232 and 289, Laws of Utah 2005
98 63-55-263, as last amended by Chapters 82 and 86, Laws of Utah 2006
99 63-55b-154, as last amended by Chapter 205, Laws of Utah 2003
100 63-55b-159, as last amended by Chapter 90, Laws of Utah 2004
101 63-55b-163, as last amended by Chapter 340, Laws of Utah 2006
102 63-55b-178, as last amended by Chapter 65, Laws of Utah 2004
103 63-56-806, as renumbered and amended by Chapter 25, Laws of Utah 2005
104 63-65-2, as last amended by Chapter 294, Laws of Utah 2005
105 63-90-2, as last amended by Chapter 293, Laws of Utah 1997
106 63A-3-205, as last amended by Chapter 294, Laws of Utah 2005
107 63F-1-205, as enacted by Chapter 169, Laws of Utah 2005
108 64-13-14, as last amended by Chapter 116, Laws of Utah 1987
109 67-11-2, as last amended by Chapter 92, Laws of Utah 1987
110 67-11-3, as last amended by Chapter 92, Laws of Utah 1987
111 67-11-4, Utah Code Annotated 1953
112 67-11-5, Utah Code Annotated 1953
113 67-11-6, as last amended by Chapter 92, Laws of Utah 1987
114 70A-2-504, as enacted by Chapter 154, Laws of Utah 1965
115 70A-3-312, as last amended by Chapter 79, Laws of Utah 1996
116 70A-10-102, as enacted by Chapter 154, Laws of Utah 1965
117 70C-7-107, as enacted by Chapter 24, Laws of Utah 1988
118 73-10-23, as last amended by Chapter 234, Laws of Utah 1990
119 75-2-1105, as last amended by Chapter 129, Laws of Utah 1993
120 75-3-902, as enacted by Chapter 150, Laws of Utah 1975

121 75-5-428, as enacted by Chapter 150, Laws of Utah 1975
122 76-6-505, as last amended by Chapter 291, Laws of Utah 1995
123 76-6-506.2, as last amended by Chapter 60, Laws of Utah 1991
124 76-6-603, as enacted by Chapter 78, Laws of Utah 1979
125 77-13-1, as last amended by Chapter 61, Laws of Utah 2002
126 77-19-4, as enacted by Chapter 15, Laws of Utah 1980
127 77-27-24, as enacted by Chapter 15, Laws of Utah 1980
128 77-27-29, as enacted by Chapter 15, Laws of Utah 1980
129 77-30-23, as last amended by Chapter 67, Laws of Utah 1984
130 77-30-25, as enacted by Chapter 15, Laws of Utah 1980
131 77-32-303, as last amended by Chapter 251, Laws of Utah 2001
132 78-13-1, Utah Code Annotated 1953
133 78-14-9.5, as last amended by Chapters 30 and 240, Laws of Utah 1992
134 78-24-14, Utah Code Annotated 1953
135 78-25-16, as last amended by Chapter 20, Laws of Utah 1995
136 78-31a-121, as enacted by Chapter 326, Laws of Utah 2002
137 78-34-4.5, as last amended by Chapter 358, Laws of Utah 2006
138 78-34-9, as last amended by Chapter 223, Laws of Utah 2004
139 78-34-21, as last amended by Chapter 214, Laws of Utah 2003
140 78-39-15, Utah Code Annotated 1953
141 78-45-7.5, as last amended by Chapter 324, Laws of Utah 2006
142
143 Be it enacted by the Legislature of the state of Utah:
144 Section 1. Section 3-1-9 is amended to read:
145 3-1-9. Powers.
146 [(I)] (1) An association formed under this act, or an association which might be formed
147 under this act and which existed at the time this act took effect, shall have power and capacity
148 to act possessed by natural persons and may do each and everything necessary, suitable or
149 proper for the accomplishment of any one or more of the purposes, or the attainment of any one
150 or more of the objects herein enumerated or conducive to or expedient for the interests or
151 benefit of the association, and may exercise all powers, rights, and privileges necessary or

152 incident thereto, including the exercise of any rights, powers, and privileges granted by the
153 laws of this state to corporations generally, excepting such as are inconsistent with the express
154 provisions of this act.
155 [Special Authority.]
156 [(II)] (2) Without limiting or enlarging the grant of authority contained in [Subdivision
157 I of this section] Subsection (1), it is hereby specifically provided that every such association
158 shall have authority:
159 (a) to act as agent, broker, or attorney in fact for its members and other producers, and
160 for any subsidiary or affiliated association, and otherwise to assist or join with associations
161 engaged in any one or more of the activities authorized by its articles, and to hold title for its
162 members and other producers, and for subsidiary and affiliated association to property handled
163 or managed by the association on their behalf;
164 (b) to make contracts and to exercise by its board or duly authorized officers or agents,
165 all such incidental powers as may be necessary, suitable or proper for the accomplishment of
166 the purposes of the association and not inconsistent with law or its articles, and that may be
167 conducive to or expedient for the interest or benefit of the association;
168 (c) to make loans or advances to members or producer-patrons or to the members of an
169 association which is itself a member or subsidiary thereof; to purchase, or otherwise acquire,
170 endorse, discount, or sell any evidence of debt, obligation or security;
171 (d) to establish and accumulate reasonable reserves and surplus funds and to abolish
172 the same; also to create, maintain, and terminate revolving funds or other similar funds which
173 may be provided for in the bylaws of the association;
174 (e) to own and hold membership in or shares of the stock of other associations and
175 corporations and the bonds or other obligations thereof, engaged in any related activity; or, in
176 producing, warehousing or marketing any of the products handled by the association; or, in
177 financing its activities; and while the owner thereof, to exercise all the rights of ownership,
178 including the right to vote thereon;
179 (f) to acquire, hold, sell, dispose of, pledge, or mortgage, any property which its
180 purposes may require;
181 (g) to borrow money without limitation as to amount, and to give its notes, bonds, or
182 other obligations therefor and secure the payment thereof by mortgage or pledge;

183 (h) to deal in products of, and handle machinery, equipment, supplies and perform
184 services for nonmembers to an amount not greater in annual value than such as are dealt in,
185 handled or performed for or on behalf of its members, but the value of the annual purchases
186 made for persons who are neither members nor producers shall not exceed fifteen per centum
187 of the value of all its purchases. Business transacted by an association for or on behalf of the
188 United States or any agency or instrumentality thereof, shall be disregarded in determining the
189 volume or value of member and nonmember business transacted by such association;
190 (i) if engaged in marketing the products of its members, to hedge its operations;
191 (j) to have a corporate seal and to alter the same at pleasure;
192 (k) to continue as a corporation for the time limited in its articles, and if no time limit
193 is specified then perpetually;
194 (l) to sue and be sued in its corporate name;
195 (m) to conduct business in this state and elsewhere as may be permitted by law; and
196 (n) to dissolve and wind up.
197 Section 2. Section 3-1-17 is amended to read:
198 3-1-17. Contracts with association.
199 [(I)] (1) (a) The bylaws may require members to execute contracts with the association
200 in which the members agree to patronize the facilities created by the association, and to sell all
201 or a specified part of their products to or through it, or to buy all or a specified part of their
202 supplies from or through the association or any facilities created by it.
203 (b) If the members contract to sell through the association, the fact that for certain
204 purposes the relation between the association and its members may be one of agency shall not
205 prevent the passage from the member to the association of absolute and exclusive title to the
206 products which are the subject matter of the contract.
207 (c) Such title shall pass to the association upon delivery of the product, or at any other
208 time specified in the contract.
209 (d) If the period of the contract exceeds three years, the bylaws and the contracts
210 executed thereunder shall specify a reasonable period, not less than ten days in each year, after
211 the third year, during which the member, by giving to the association such reasonable notice as
212 the association may prescribe, may withdraw from the association; provided, that if the bylaws
213 or contracts executed hereunder so specify, a member may not withdraw from the association

214 while indebted thereto.
215 (e) In the absence of such a withdrawal provision, a member may withdraw at any time
216 after three years.
217 [Damages for Breach.]
218 [(II)] (2) The contract may fix, as liquidated damages, which shall not be regarded as
219 penalties, specific sums to be paid by the members to the association upon the breach of any
220 provision of the contract regarding the use of any facilities of the association or the sale,
221 delivery, handling, or withholding of products; and may further provide that the member who
222 breaks his contract shall pay all costs, including premiums for bonds, and reasonable attorney's
223 fees, to be fixed by the court, in case the association prevails in any action upon the contract.
224 [Equitable Relief.]
225 [(III)] (3) (a) A court of competent jurisdiction may grant an injunction to prevent the
226 breach or further breach of the contract by a member and may decree specific performance
227 thereof.
228 (b) Pending the adjudication of such an action and upon filing a verified complaint
229 showing the breach or threatened breach, and a bond in such form and amount as may be
230 approved by the court, the court may grant a temporary restraining order or preliminary
231 injunction against the member.
232 [Remedy Not Exclusive.]
233 [(IV)] (4) No remedy, either legal or equitable, herein provided for, shall be exclusive,
234 but the association may avail itself of any and all such remedies, at the same or different times,
235 in any action or proceeding.
236 [Landowners Presumed to Control Delivery.]
237 [(V)] (5) In any action upon such marketing contracts, it shall be conclusively
238 presumed that a landowner or landlord or lessor is able to control the delivery of products
239 produced on his land by tenants or others, whose tenancy or possession or work on such land or
240 the terms of whose tenancy or possession or labor thereon were created or changed after
241 execution by the landowner or landlord or lessor of such a marketing contract; and in such
242 actions, the foregoing remedies for nondelivery or breach shall lie and be enforceable against
243 such landowner, landlord, or lessor.
244 [Filing Contract.]

245 [(VI)] (6) (a) The association may file contracts to sell agricultural products to or
246 through the association in the office of the county recorder of the county in which the products
247 are produced.
248 (b) If the association has uniform contracts with more than one member in any county,
249 it may, in lieu of filing the original contracts, file the affidavit of its president, vice president or
250 secretary, containing or having attached thereto:
251 [(a)] (i) a true copy of the uniform contract entered into with its members producing
252 such product in that county; and
253 [(b)] (ii) the names of the members who have executed such contract and a description
254 of the land on which the product is produced, if such description is contained in the contract.
255 (c) The association may file from time to time thereafter affidavits containing revised
256 or supplementary lists of the members producing such product in that county without setting
257 forth therein a copy of the uniform contract but referring to the filed or recorded copy thereof.
258 (d) All affidavits filed under this section shall state in substance that they are filed
259 pursuant to the provisions of this section.
260 (e) The county recorder shall file such affidavits and make endorsements thereon and
261 record and make entries thereof in the same manner as is required by law in the case of chattel
262 mortgages, and he shall compile and make available for public inspection a convenient index
263 containing the names of all signers of such contracts, and collect for his services hereunder the
264 same fees as for chattel mortgages.
265 (f) The filing of any such contract, or such affidavit, shall constitute constructive notice
266 of the contents thereof, and of the association's title or right to the product embraced in such
267 contract, to all subsequent purchasers, encumbrancers, creditors, and to all persons dealing with
268 the members with reference to such product.
269 (g) No title, right, or lien of any kind shall be acquired to or on the product thereafter
270 except through the association or with its consent, or subject to its rights; and the association
271 may recover the possession of such property from any and all subsequent purchasers,
272 encumbrancers, and creditors, and those claiming under them, in whose possession the same
273 may be found, by any appropriate action for the recovery of personal property, and it may have
274 relief by injunction and for damages.
275 Section 3. 3-1-41 is amended to read:

276 3-1-41. Domestic or foreign corporations or associations -- Plan of merger --
277 Articles of merger -- Certificate of merger.
278 (1) (a) A Utah cooperative association owning 90% of the outstanding shares of each
279 class of a foreign or domestic corporation or association may merge such other corporation or
280 association into itself without the approval of the shareholders or members of either
281 corporation or association.
282 (b) The governing board shall, by resolution, approve a plan of merger setting forth:
283 [(a)] (i) the name of the subsidiary corporation or association and the name of the
284 corporation or association owning 90% or more of its shares, which is hereafter designated as
285 the surviving corporation or association; and
286 [(b)] (ii) the manner and basis for converting each class of shares of the subsidiary
287 corporation or association into shares, obligations, or other securities of the surviving
288 corporation or association, or of any other corporation or association, in whole or in part, into
289 cash or other property.
290 (c) A copy of the plan of merger shall be mailed to each record member or shareholder
291 of the subsidiary corporation or association.
292 (2) (a) Articles of merger shall be executed in triplicate by the president or vice
293 president and the secretary or an assistant secretary of the surviving corporation or association
294 and verified by one of its officers.
295 (b) The articles of merger shall set forth:
296 [(a)] (i) the plan of merger;
297 [(b)] (ii) the number of outstanding shares of each class of the subsidiary corporation or
298 association and the number of such shares of each class owned by the surviving corporation or
299 association; and
300 [(c)] (iii) the date a copy of the plan of merger was mailed to shareholders or members
301 of the subsidiary corporation or association.
302 (3) (a) Triplicate originals of the articles of merger shall be delivered to the Division of
303 Corporations and Commercial Code on the 30th day after mailing a copy of the plan to
304 shareholders or members.
305 (b) If that division finds such articles conform to law and that all fees prescribed by this
306 act have been paid, it shall:

307 [(a)] (i) endorse on each of said triplicate originals the word "filed," together with the
308 month, date, and year of filing;
309 [(b)] (ii) file one of the triplicate originals with the Division of Corporations and
310 Commercial Code and forward another triplicate original to the state Department of
311 Agriculture and Food; and
312 [(c)] (iii) issue a certificate of merger with the remaining triplicate original affixed.
313 (c) The certificate of merger, together with a triplicate original of the articles of merger
314 affixed by the Division of Corporations and Commercial Code, shall be returned to the
315 surviving corporation or association or its representative.
316 (4) The merger of a foreign corporation or association into a Utah cooperative
317 association shall conform to the laws of the state under which each such foreign corporation or
318 association is organized.
319 Section 4. Section 7-1-104 is amended to read:
320 7-1-104. Exemptions from application of title.
321 (1) This title does not apply to:
322 [(1)] (a) investment companies registered under the Investment Company Act of 1940,
323 15 U.S.C. Sec. 80a-1 et seq.;
324 [(2)] (b) securities brokers and dealers registered pursuant to [the]:
325 (i) Title 61, Chapter 1, Utah Uniform Securities Act; or
326 (ii) the federal Securities Exchange Act of 1934, 15 U.S.C. Sec. 78a et seq.;
327 [(3)] (c) depository or other institutions performing transaction account services,
328 including third party transactions, in connection with:
329 (i) the purchase and redemption of investment company shares[,]; or [in connection
330 with]
331 (ii) access to a margin or cash securities account maintained by a person identified in
332 Subsection [(2)] (1)(b); or
333 [(4)] (d) insurance companies selling interests in an investment company or "separate
334 account" and subject to regulation by the Utah Insurance Department.
335 (2) (a) An institution, organization, or person is not exempt from this title if, within
336 this state, it holds itself out to the public as receiving and holding deposits from residents of
337 this state, whether evidenced by a certificate, promissory note, or otherwise.

338 (b) An investment company is not exempt from this title unless [it] the investment
339 company is registered with the United States Securities and Exchange Commission under the
340 Investment Company Act of 1940, 15 U.S.C. Sec. 80a-1 et seq., and is advised by an
341 investment advisor: [(a)]
342 (i) which is registered with the United States Securities and Exchange Commission
343 under the Investment Advisors Act of 1940, 15 U.S.C. Sec. 80b-1 et seq.; and [(b)]
344 (ii) which advises investment companies and other accounts with a combined value of
345 at least $50,000,000.
346 Section 5. Section 7-7-12 is amended to read:
347 7-7-12. Inspection of books and records -- Confidentiality -- Communication
348 between members or stockholders.
349 (1) Every member, stockholder, or borrower of an association shall have the right to
350 inspect, upon paying any costs of retrieval or reproduction and upon reasonable notice and
351 during regular business hours:
352 (a) the books and records of the association which do not contain any confidential
353 information relating to a loan, savings account, or voting rights of another member,
354 stockholder, or borrower; and
355 (b) such books and records of the association as pertain to [his] the member's,
356 stockholder's, or borrower's own loan, savings account, or the determination of [his] the
357 member's, stockholder's, or borrower's voting rights. [Otherwise,]
358 (2) Except as provided in Subsection (1), the right of inspection and examination of the
359 books, accounts, and records shall be limited to:
360 [(i)] (a) the commissioner and supervisor, or their duly authorized representatives;
361 [(ii)] (b) persons authorized to act for the association;
362 [(iii)] (c) any federal or state instrumentality or agency authorized to inspect or
363 examine the books and records of an insured association;
364 [(iv)] (d) the Office of Thrift Supervision, the Federal Deposit Insurance Corporation,
365 or their successor agencies; and
366 [(v)] (e) any person acting under authority of a court of competent jurisdiction.
367 [(2)] (3) Except as otherwise stated in this section, the books and records pertaining to
368 the accounts, loans, and voting rights of savers, borrowers, members, and stockholders shall be

369 kept confidential by the association, its directors, officers, and employees, and by the
370 commissioner, the supervisor, and their examiners and representatives, unless disclosure is
371 expressly or impliedly authorized by the saver, borrower, member, or stockholder.
372 [(3)] (4) Each member or stockholder of an association has the right to communicate
373 with other members or stockholders of the same association with reference to any question
374 pending or to be presented for consideration at a meeting of the members or stockholders. A
375 member or stockholder, in order to communicate with other members or stockholders, shall
376 submit to the association a request, subscribed by [him] the member or stockholder, which
377 includes:
378 (a) [his] the member's or stockholder's full name and address;
379 (b) the nature and extent of [his] the member's or stockholder's interest in the
380 association at the time [his] the member's or stockholder's application for communication is
381 made;
382 (c) a statement of the reasons for and purposes of the communication and that the
383 communication is not for any reason other than the business welfare of the association;
384 &n