H.B. 430

1

PUBLIC EMPLOYEES UNION FINANCIAL
2 RESPONSIBILITY ACT
3 2007 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Gregory H. Hughes
6 Senate Sponsor: ____________
7
8 LONG TITLE
9 General Description:
10 This bill modifies Title 34, Labor in General, by enacting the Public Employees Union
11 Financial Responsibility Act to provide certain reporting by unions of public
12 employees.
13 Highlighted Provisions:
14 This bill:
15 . enacts the Public Employees Union Financial Responsibility Act;
16 . provides certain definitions;
17 . requires public employee labor organizations to adopt bylaws and report the
18 organizations' fees, provisions, and procedures to the Labor commissioner;
19 . requires public employee labor organizations to file an annual financial report to the
20 labor commissioner and provides for its contents;
21 . requires each officer of a labor organization and each employee of a labor
22 organization to file a report on certain interests held in businesses that do business
23 with the labor organization or governmental agencies having employees that the
24 labor organization represents;
25 . provides that the reports filed are public information, with certain exceptions, and
26 provides for retention of certain records for certain periods;
27 . provides for certain rulemaking authority;

28 . permits members of labor organizations to obtain court orders to review certain
29 financial records of the labor organization;
30 . provides for criminal penalties, investigations, and enforcement; and
31 . provides for certain exceptions.
32 Monies Appropriated in this Bill:
33 None
34 Other Special Clauses:
35 None
36 Utah Code Sections Affected:
37 ENACTS:
38 34-44-101, Utah Code Annotated 1953
39 34-44-102, Utah Code Annotated 1953
40 34-44-201, Utah Code Annotated 1953
41 34-44-202, Utah Code Annotated 1953
42 34-44-203, Utah Code Annotated 1953
43 34-44-301, Utah Code Annotated 1953
44 34-44-302, Utah Code Annotated 1953
45 34-44-303, Utah Code Annotated 1953
46 34-44-401, Utah Code Annotated 1953
47 34-44-501, Utah Code Annotated 1953
48 34-44-502, Utah Code Annotated 1953
49 34-44-503, Utah Code Annotated 1953
50 34-44-601, Utah Code Annotated 1953
51
52 Be it enacted by the Legislature of the state of Utah:
53 Section 1. Section 34-44-101 is enacted to read:
54 CHAPTER 44. PUBLIC EMPLOYEES UNION FINANCIAL RESPONSIBILITY ACT
55 34-44-101. Title.
56 This chapter is known as the "Public Employees Union Financial Responsibility Act."
57 Section 2. Section 34-44-102 is enacted to read:
58 34-44-102. Definitions.

59 As used in this chapter:
60 (1) "Commissioner" has the same meaning as provided under Section 34A-1-102 .
61 (2) (a) "Governmental entity" means the state including any departments, units, or
62 administrative subdivisions and any of the state's political subdivisions, including any county,
63 municipality, school district, special district, local district, or any administrative subdivision of
64 those entities.
65 (b) "Governmental entity" does not include the federal government of the United States
66 or any corporation wholly owned by the government of the United States.
67 (3) "Labor organization" means an organization:
68 (a) in which employees of a governmental entity participate; and
69 (b) which exists for the purpose, in whole or in part, of dealing with a governmental
70 entity concerning grievances, labor disputes, wages, rates of pay, hours of employment,
71 conditions of work compensation, or conditions of employment.
72 (4) "Member" or "member in good standing," when used in reference to a labor
73 organization, includes any person who has fulfilled the requirements for membership in the
74 organization, and who neither has voluntarily withdrawn from membership nor has been
75 expelled or suspended from membership after appropriate proceedings consistent with lawful
76 provisions of the constitution and bylaws of such organization.
77 (5) "Officer" means:
78 (a) any constitutional officer of the labor organization;
79 (b) any person authorized to perform the functions of president, vice president,
80 secretary, treasurer, or other executive functions of a labor organization; and
81 (c) any member of the labor organization's executive board or similar governing body.
82 Section 3. Section 34-44-201 is enacted to read:
83 34-44-201. Report of labor organizations.
84 (1) A labor organization shall adopt a constitution and bylaws and shall file a report,
85 signed by its president and secretary or corresponding principal officers, containing the
86 following information:
87 (a) the name of the labor organization, its mailing address, and any other address at
88 which it maintains its principal office or at which it keeps the records referred to in this title;
89 (b) the name and title of each of its officers;

90 (c) a copy of the adopted constitution and bylaws;
91 (d) (i) the initiation fee or fees required from a new or transferred member; and
92 (ii) fees, if any, for work permits required by the reporting labor organization;
93 (e) the regular dues or fees or other periodic payments required to remain a member of
94 the reporting labor organization; and
95 (f) detailed statements, or references to specific provisions of documents filed under
96 this Subsection (1) which contain the statements, showing the provisions made and procedures
97 followed with respect to each of the following:
98 (i) qualifications for, or restrictions on, membership;
99 (ii) levying of assessments;
100 (iii) participating in insurance or other benefit plans;
101 (iv) authorization for disbursement of funds of the labor organization;
102 (v) audit of financial transactions of the labor organization;
103 (vi) the calling of regular and special meetings;
104 (vii) the selection of officers, stewards, and any representatives to other bodies
105 composed of labor organizations' representatives, with a specific statement of the manner in
106 which each officer was elected, appointed, or otherwise selected;
107 (viii) discipline or removal of officers or agents for breaches of their trust;
108 (ix) imposition of fines, suspensions, and expulsions of members, including the
109 grounds for the action, and any provision made for notice, hearing, judgment on the evidence,
110 and appeal procedures;
111 (x) authorization for bargaining demands;
112 (xi) ratification of contract terms;
113 (xii) authorization for strikes; and
114 (xiii) issuance of work permits.
115 (2) The report shall be filed with the commissioner as defined under Section
116 34A-1-102 , on or before December 31, 2007.
117 (3) If any change is made in the information required under Subsection (1), the labor
118 organization shall file an amended report at the time the reporting labor organization files with
119 its annual financial report required under Section 34-44-202 .
120 Section 4. Section 34-44-202 is enacted to read:

121 34-44-202. Annual financial reports.
122 (1) A labor organization shall file an annual financial report disclosing its financial
123 condition and operations for its preceding fiscal year. The report shall be signed by its
124 president and treasurer, or corresponding principal officers, and contain the following
125 information:
126 (a) assets and liabilities at the beginning and end of the fiscal year;
127 (b) receipts of any kind and the sources thereof;
128 (c) salary, allowances, and other direct or indirect disbursements, including reimbursed
129 expenses, to each officer and also to each employee who, during the fiscal year, received more
130 than $10,000 in the aggregate from the labor organization and any other labor organization
131 affiliated with it or with which it is affiliated, or which is affiliated with the same parent body;
132 (d) direct and indirect loans made to any officer, employee, or member, which when
133 aggregated equal more than $250 during the fiscal year, including a statement of the purpose of
134 each loan, security for each loan, if any, and arrangements for repayment of each loan;
135 (e) direct and indirect loans made to any business enterprise, including a statement of
136 the purpose of each loan, security of each loan, if any, and arrangements for repayment of each
137 loan; and
138 (f) other disbursements made by the labor organization, including the purposes for the
139 disbursements in all categories as determined by the commissioner.
140 (2) The annual financial report shall be filed with the commissioner within 90 days
141 after the end of the labor union's fiscal year.
142 (3) (a) A labor organization required to file a report under this section shall make the
143 information required to be contained in the report available to all of its members.
144 (b) A labor organization and its officers shall be under a duty, which shall be
145 enforceable by suit filed by any member of the organization in a court, to permit a member of
146 the labor organization to examine any books, records, and accounts necessary to verify the
147 validity of a report required by this section.
148 Section 5. Section 34-44-203 is enacted to read:
149 34-44-203. Report of officers and employees of labor organizations.
150 (1) Except for an employee that performs exclusively clerical or custodial services,
151 each officer and employee of a labor organization shall file with the commissioner, a signed

152 report listing and describing, for the preceding fiscal year of the labor organization:
153 (a) any stock, bond, security, or other legal or equitable interest, and any income or
154 other benefit with monetary value, including reimbursed expenses, which the officer or
155 employee, or the officer or employee's spouse or minor child, directly or indirectly held in or
156 derived from a business entity, if:
157 (i) (A) the business entity conducts business with a governmental entity whose
158 employees the labor organization represents or is actively seeking to represent; and
159 (B) a substantial part of the business entity's activity consists of buying, selling, and
160 leasing property, goods, or services to or from the labor organization; or
161 (ii) any part of the business entity's activity consists of buying, selling, or leasing
162 property, goods, or services to or from the labor organization;
163 (b) any direct or indirect business transaction or arrangement between the officer or
164 employee, or the officer or employee's spouse or minor child, and any governmental entity
165 whose employees the labor organization represents or is actively seeking to represent, except:
166 (i) work performed and payments and benefits received as a bona fide employee of the
167 governmental entity; and
168 (ii) purchases and sales of goods or services in the regular course of business at prices
169 generally available to any employee of the governmental entity; and
170 (c) any payment of money or other thing of value, including reimbursed expenses,
171 which the officer or employee, or the officer or employee's spouse or minor child, received
172 directly or indirectly from any employer or any person who acts as a labor relations consultant
173 to an employer, except payments of the kinds referred to in 29 U.S.C. 186(c).
174 (2) The provisions of Subsection (1) of this section shall not be construed to require
175 any officer or employee to report:
176 (a) the officer or employee's bona fide investments:
177 (i) in securities traded on a securities exchange registered as a national securities
178 exchange under the Securities Exchange Act of 1934; or
179 (ii) in shares in an investment company registered under the investment company act or
180 in securities of a public utility holding company registered under the Public Utility Holding
181 Company Act of 1935; or
182 (b) to report any income derived from investments described under Subsection (2)(a).

183 (3) Nothing contained in this section shall be construed to require any officer or
184 employee of a labor organization to file a report under Subsection (1) unless the officer or
185 employee, or the officer or employee's spouse or minor child:
186 (a) holds or has held an interest in the stock, bond, or other interest, has received any
187 income in the stock, bond, or other interest, or any other benefit with monetary value or a loan;
188 or
189 (b) has engaged in a transaction described under Subsection (1).
190 Section 6. Section 34-44-301 is enacted to read:
191 34-44-301. Attorney-client communications exempted.
192 Nothing contained in this chapter shall be construed to require an attorney who is a
193 member in good standing of the bar of any state, to include in any report required to be filed
194 under this chapter any information which was lawfully communicated to the attorney by any of
195 the attorney's clients in the course of a legitimate attorney-client relationship.
196 Section 7. Section 34-44-302 is enacted to read:
197 34-44-302. Reports made public information.
198 (1) In accordance with Title 63, Chapter 2, Government Records Access and
199 Management Act, the contents of the reports and documents filed with the commissioner under
200 Sections 34-44-201 , 34-44-202 , and 34-44-203 are public records.
201 (2) The commissioner may:
202 (a) publish any information and data which the commissioner obtains under this
203 chapter; and
204 (b) use the information and data for statistical and research purposes, and compile and
205 publish studies, analyses, reports, and surveys based on the information as the commissioner
206 determines appropriate.
207 Section 8. Section 34-44-303 is enacted to read:
208 34-44-303. Maintenance of records.
209 (1) A person required to file any report under this title shall maintain records on the
210 matters required to be reported, which shall be in sufficient detail so that the reports may be
211 verified, explained, or clarified, and checked for accuracy and completeness. The records shall
212 include vouchers, worksheets, receipts, and applicable resolutions.
213 (2) A labor organization required to file a report under this chapter shall keep the

214 records available for examination for a period of not less than five years after the filing of the
215 documents based on the information which they contain.
216 Section 9. Section 34-44-401 is enacted to read:
217 34-44-401. Rules.
218 In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
219 commissioner may make rules prescribing the form and publication of reports required to be
220 filed under this chapter. The rules shall:
221 (1) allow simplified reports for labor organizations for whom the commissioner finds
222 that, by virtue of their size, a detailed report would be unduly burdensome; and
223 (2) allow the commissioner to revoke the allowance for simplified forms of a labor
224 organization if the commissioner determines, after an investigation and due notice and
225 opportunity for a hearing, that the purposes of this chapter would be served by the revocation of
226 the simplified report authorization.
227 Section 10. Section 34-44-501 is enacted to read:
228 34-44-501. Penalties.
229 (1) A person who willfully violates this chapter shall be guilty of a class B
230 misdemeanor.
231 (2) A person who makes a false statement or representation of a material fact knowing
232 it to be false, or who knowingly fails to disclose a material fact, in any document, report, or
233 other information required under the provisions of this chapter, is guilty of a class B
234 misdemeanor.
235 (3) A person who willfully makes a false entry in or willfully conceals, withholds, or
236 destroys any books, records, reports, or statements required to be kept by any provision of this
237 chapter is guilty of a class B misdemeanor.
238 (4) An individual required to sign reports under Section 34-44-201 , 34-44-202 , or
239 34-44-203 shall be personally responsible for the filing of the reports and for any statement
240 contained in the report the individual knows to be false.
241 Section 11. Section 34-44-502 is enacted to read:
242 34-44-502. Civil enforcement.
243 (1) Whenever it appears that any person has violated or is about to violate any of the
244 provisions of this chapter, the commissioner may bring a civil action for relief as may be

245 appropriate.
246 (2) Any action may be brought in a court in the jurisdiction where the alleged violation
247 occurred or in the jurisdiction where the labor organization maintains its principal office.
248 Section 12. Section 34-44-503 is enacted to read:
249 34-44-503. Investigations.
250 (1) The attorney general or the commissioner may make an investigation in connection
251 any violation of this chapter and may enter any places and inspect any records and accounts and
252 question any person the attorney general or the commissioner considers necessary to enable
253 him to determine the relevant facts.
254 (2) The attorney general or the commissioner may report to interested persons or
255 officials concerning the facts required to be shown in any report required by this chapter and
256 concerning the reasons for failure or refusal to file a report or any other matter which is
257 considered to be appropriate as a result of an investigation.
258 Section 13. Section 34-44-601 is enacted to read:
259 34-44-601. Exemption for organizations covered by federal statute.
260 The provisions of this chapter do not apply to any labor organization required to file
261 annual or semiannual disclosure reports under the federal Labor Management Reporting and
262 Disclosure Act.




Legislative Review Note
as of 2-15-07 9:43 AM

Office of Legislative Research and General Counsel