H.B. 85

1

MUTUAL BENEFIT CORPORATION -
2 JUDICIAL LIENS
3 2009 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Patrick Painter
6 Senate Sponsor: David P. Hinkins
7
8 LONG TITLE
9 General Description:
10 This bill modifies the Utah Revised Nonprofit Corporations Act and lien provisions to
11 address the execution of a judicial lien against the water rights and related assets of a
12 mutual benefit corporation.
13 Highlighted Provisions:
14 This bill:
15 . defines terms; and
16 . imposes limitations on executing a judicial lien.
17 Monies Appropriated in this Bill:
18 None
19 Other Special Clauses:
20 None
21 Utah Code Sections Affected:
22 ENACTS:
23 16-6a-119, Utah Code Annotated 1953
24 38-5-2, Utah Code Annotated 1953
25
26 Be it enacted by the Legislature of the state of Utah:
27 Section 1. Section 16-6a-119 is enacted to read:

28 16-6a-119. Execution against a mutual benefit corporation.
29 (1) As used in this section:
30 (a) "Judicial lien" means one or more of the following:
31 (i) a judgment lien; or
32 (ii) other lien obtained by a judicial or equitable process or proceeding.
33 (b) "Water right" means:
34 (i) a right to use water evidenced by a means identified in Section 73-1-10 ; or
35 (ii) a right to use water under an approved application:
36 (A) to appropriate;
37 (B) for a change of use; or
38 (C) for the exchange of water.
39 (c) "Water rights and related assets" means a water right or title to:
40 (i) a water conveyance facility; or
41 (ii) other asset of a mutual benefit corporation necessary to divert or distribute water to
42 its members.
43 (2) Except as provided in Subsection (3), a court may not do the following with regard
44 to a judicial lien recorded on or after May 12, 2009 against the water rights and related assets
45 of a mutual benefit corporation earlier than 180 days after the day on which the judicial lien is
46 recorded or takes effect:
47 (a) execute the judicial lien;
48 (b) impose a levy as a result of the judicial lien; or
49 (c) force the sale, transfer, or change in ownership of the water rights and related assets
50 pursuant to the judicial lien.
51 (3) This section does not apply to a judicial lien related to a cause of action brought
52 against a mutual benefit corporation by a shareholder under Section 73-3-3.5 .
53 Section 2. Section 38-5-2 is enacted to read:
54 38-5-2. Judicial lien against water rights and related assets of a mutual benefit
55 corporation.
56 (1) As used in this section:
57 (a) "Judicial lien" is defined in Section 16-6a-119 .
58 (b) "Mutual benefit corporation" is defined in Section 16-6a-102 .

59 (c) "Water rights and related assets" is defined in Section 16-6a-119 .
60 (2) A judicial lien recorded on or after May 12, 2009 against the water rights and
61 related assets of a mutual benefit corporation is subject to Section 16-6a-119 .




Legislative Review Note
as of 12-22-08 1:10 PM

Office of Legislative Research and General Counsel