First Substitute H.B. 223

Representative Gage Froerer proposes the following substitute bill:

1 EXEMPTION FROM LICENSURE BY
2 DIVISION OF REAL ESTATE
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Mark W. Walker
6 Senate Sponsor: ____________
7
8 LONG TITLE
9 General Description:
10 This bill modifies provisions related to state and local governments and licensure by the
11 Division of Real Estate.
12 Highlighted Provisions:
13 This bill:
14 . exempts from licensure certain regular salaried employees of a county when acting
15 on behalf of the county;
16 . exempts from licensure certain agents of the Department of Transportation;
17 . expands the activities government employees may engage in without being licensed;
18 and
19 . makes technical changes.
20 Monies Appropriated in this Bill:
21 None
22 Other Special Clauses:
23 None
24 Utah Code Sections Affected:
25 AMENDS:

26 10-3-1110, as enacted by Laws of Utah 2007, Chapter 325
27 61-2-3, as last amended by Laws of Utah 2007, Chapter 325
28 72-5-116, as enacted by Laws of Utah 2007, Chapter 325
29 ENACTS:
30 17-50-106, Utah Code Annotated 1953
31
32 Be it enacted by the Legislature of the state of Utah:
33 Section 1. Section 10-3-1110 is amended to read:
34 10-3-1110. Exemption from state licensure by Division of Real Estate.
35 In accordance with Section 61-2-3 , an employee of a municipality is exempt from
36 licensure under Title 61, Chapter 2, Division of Real Estate:
37 (1) when engaging in an act on behalf of the municipality in accordance with:
38 (a) this title [and]; or
39 (b) Title 11, Cities, Counties, and Local Taxing Units; and
40 (2) if the act described in Subsection (1) is related to one or more of the following [is
41 exempt from licensure under Title 61, Chapter 2, Division of Real Estate]:
42 [(1)] (a) acquiring real property, including by eminent domain;
43 [(2)] (b) disposing of real property; [or]
44 [(3)] (c) providing services that constitute property management, as defined in Section
45 61-2-2 [.]; or
46 (d) leasing real property.
47 Section 2. Section 17-50-106 is enacted to read:
48 17-50-106. Exemption from state licensure by Division of Real Estate.
49 In accordance with Section 61-2-3 , an employee of a county is exempt from licensure
50 under Title 61, Chapter 2, Division of Real Estate:
51 (1) when engaging in an act on behalf of the county in accordance with:
52 (a) this title; or
53 (b) Title 11, Cities, Counties, and Local Taxing Units; and
54 (2) if the act described in Subsection (1) is related to one or more of the following:
55 (a) acquiring real property, including by eminent domain;
56 (b) disposing of real property;

57 (c) providing services that constitute property management, as defined in Section
58 61-2-2 ; or
59 (d) leasing real property.
60 Section 3. Section 61-2-3 is amended to read:
61 61-2-3. Exempt persons and transactions.
62 (1) (a) Except as provided in Subsection (1)(b), a license under this chapter is not
63 required for:
64 (i) [any] a person who as owner or lessor performs the acts described in Subsection
65 61-2-2 (12) with reference to property owned or leased by that person;
66 (ii) a regular salaried employee of the owner or lessor of real estate who, with reference
67 to nonresidential real estate owned or leased by the employer, performs the acts enumerated in
68 Subsections 61-2-2 (12)(a) and (b);
69 (iii) a regular salaried employee of the owner of real estate who performs property
70 management services with reference to real estate owned by the employer, except that the
71 employee may only manage property for one employer;
72 (iv) a person who performs property management services for the apartments at which
73 that person resides in exchange for free or reduced rent on that person's apartment;
74 (v) a regular salaried employee of a condominium homeowners' association who
75 manages real property subject to the declaration of condominium that established the
76 homeowners' association, except that the employee may only manage property for one
77 condominium homeowners' association; and
78 (vi) a regular salaried employee of a licensed property management company who
79 performs support services, as prescribed by rule, for the property management company.
80 (b) Subsection (1)(a) does not exempt from licensing:
81 (i) an employee engaged in the sale of properties regulated under:
82 (A) Title 57, Chapter 11, Utah Uniform Land Sales Practices Act; and
83 (B) Title 57, Chapter 19, Timeshare and Camp Resort Act;
84 (ii) an employee engaged in the sale of cooperative interests regulated under Title 57,
85 Chapter 23, Real Estate Cooperative Marketing Act; or
86 (iii) [any] a person whose interest as an owner or lessor is obtained by that person or
87 transferred to that person for the purpose of evading the application of this chapter, and not for

88 any other legitimate business reason.
89 (2) A license under this chapter is not required for:
90 (a) an isolated transaction by a person holding a duly executed power of attorney from
91 the owner;
92 (b) services rendered by an attorney in performing the attorney's duties as an attorney;
93 (c) a receiver, trustee in bankruptcy, administrator, executor, or [any] a person acting
94 under order of any court;
95 (d) a trustee or employee of a trustee under a deed of trust or a will;
96 (e) [any] a public utility, officer of a public utility, or regular salaried employee of a
97 public utility, unless performance of any of the acts set out in Subsection 61-2-2 (12) is in
98 connection with the sale, purchase, lease, or other disposition of real estate or investment in
99 real estate unrelated to the principal business activity of that public utility;
100 (f) a regular salaried employee or authorized agent working under the oversight of the
101 Department of Transportation when performing an act on behalf of the Department of
102 Transportation in connection with one or more of the following:
103 (i) the acquisition of real property pursuant to Section 72-5-103 ;
104 (ii) the disposal of real property pursuant to Section 72-5-111 ; [or]
105 (iii) services that constitute property management; or
106 (iv) the leasing of real property;
107 (g) a regular salaried employee of a county, city, or town when performing an act on
108 behalf of the county, city, or town:
109 (i) in accordance with:
110 (A) if a regular salaried employee of a city or town:
111 (I) Title 10, Utah Municipal Code; [and] or
112 (II) Title 11, Cities, Counties, and Local Taxing Units; and
113 (B) if a regular salaried employee of a county:
114 (I) Title 11, Cities, Counties, and Local Taxing Units; and
115 (II) Title 17, Counties; and
116 (ii) in connection with one or more of the following:
117 (A) the acquisition of real property, including by eminent domain;
118 (B) the disposal of real property; [or]

119 (C) services that constitute property management[.]; or
120 (D) the leasing of real property.
121 (3) A license under this chapter is not required for [any] a person registered to act as a
122 broker-dealer, agent, or investment advisor under the Utah and federal securities laws in the
123 sale or the offer for sale of real estate if:
124 (a) (i) the real estate is a necessary element of a "security" as that term is defined by the
125 Securities Act of 1933 and the Securities Exchange Act of 1934; and
126 (ii) the security is registered for sale:
127 (A) pursuant to the Securities Act of 1933; or
128 (B) by Title 61, Chapter 1, Utah Uniform Securities Act; or
129 (b) (i) it is a transaction in a security for which a Form D, described in 17 C.F.R. Sec.
130 239.500, has been filed with the Securities and Exchange Commission pursuant to Regulation
131 D, Rule 506, 17 C.F.R. Sec. 230.506; and
132 (ii) the selling agent and the purchaser are not residents of this state.
133 Section 4. Section 72-5-116 is amended to read:
134 72-5-116. Exemption from state licensure.
135 In accordance with Section 61-2-3 , an employee or authorized agent working under the
136 oversight of the department when engaging in an act on behalf of the department related to one
137 or more of the following is exempt from licensure under Title 61, Chapter 2, Division of Real
138 Estate:
139 (1) acquiring real property pursuant to Section 72-5-103 ;
140 (2) disposing of real property pursuant to Section 72-5-111 ; [or]
141 (3) providing services that constitute property management, as defined in Section
142 61-2-2 [.]; or
143 (4) leasing of real property.