H.B. 168 Enrolled

             1     

SCHOOL AND INSTITUTIONAL TRUST LANDS AND

             2     
FUNDS MANAGEMENT PROVISIONS

             3     
2014 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Melvin R. Brown

             6     
Senate Sponsor: Curtis S. Bramble

             7      Cosponsors:
             8      Brad L. Dee
             9      Gregory H. Hughes
             10      Don L. Ipson
             11      Rebecca Chavez-Houck
             12      Joel K. Briscoe
             13      Jacob L. Anderegg
             14      Jerry B. Anderson
             15      Stewart Barlow
             16      Roger E. Barrus
             17      Jim Bird
             18      LaVar Christensen
             19      Kay J. Christofferson
             20      Jon Cox
             21      Rich Cunningham
             22      Jack R. Draxler
             23      Susan Duckworth
             24      Rebecca P. Edwards
             25      Steve Eliason
             26      Janice M. Fisher
             27      Gage Froerer
             28      Francis D. GibsonBrian M. Greene
Richard A. Greenwood
Keith Grover
Stephen G. Handy
Lynn N. Hemingway
Eric K. Hutchings
Ken Ivory
Michael S. Kennedy
Brian S. King
John Knotwell
Bradley G. Last
Dana L. Layton
David E. Lifferth
John G. Mathis
Daniel McCay
Kay L. McIff
Mike K. McKell
Carol Spackman Moss
Merrill F. Nelson
Jim Nielson
Michael E. NoelCurtis Oda
Lee B. Perry
Jeremy A. Peterson
Val L. Peterson
Dixon M. Pitcher
Marie H. Poulson
Kraig Powell
Paul Ray
Edward H. Redd
Marc K. Roberts
Angela Romero
Douglas V. Sagers
V. Lowry Snow
Robert M. Spendlove
Jon E. Stanard
Keven J. Stratton
John R. Westwood
Mark A. Wheatley
Ryan D. Wilcox
Larry B. Wiley
Brad R. Wilson              29     


             30      LONG TITLE
             31      General Description:
             32          This bill modifies and enacts provisions relating to the management of state trust lands
             33      and funds.
             34      Highlighted Provisions:
             35          This bill:
             36          .    modifies provisions relating to the director of the School Children's Trust Section,
             37      including:
             38              .    the required qualifications of the director;
             39              .    the removal of the director; and
             40              .    the duties of the director;
             41          .    modifies provisions relating to the School Children's Trust Section;
             42          .    requires the School Children's Trust Section to provide staff support to the
             43      nominating committee for board members of the School and Institutional Trust
             44      Lands Administration;
             45          .    enacts the School and Institutional Trust Fund Management Act;
             46          .    establishes the School and Institutional Trust Fund Office, a board of trustees of the
             47      Office, and the position of director of the office;
             48          .    provides for the management of a fund consisting of money from the sale or use of
             49      land granted to the state under the Utah Enabling Act and other proceeds, revenue,
             50      and assets;
             51          .    provides for a nominating committee for members of the School and Institutional
             52      Trust Fund Board of Trustees;
             53          .    provides for funding office operations; and
             54          .    repeals Investment of Land Grant Trust Fund Money provisions.
             55      Money Appropriated in this Bill:
             56          None


             57      Other Special Clauses:
             58          This bill takes effect on July 1, 2014.
             59      Utah Code Sections Affected:
             60      AMENDS:
             61           53A-16-101.6 , as enacted by Laws of Utah 2012, Chapter 224
             62           53C-1-201 , as last amended by Laws of Utah 2013, Chapters 220 and 412
             63           53C-1-203 , as last amended by Laws of Utah 2012, Chapter 224
             64           53C-3-102 , as enacted by Laws of Utah 1994, Chapter 294
             65           63E-1-102 , as last amended by Laws of Utah 2013, Chapter 220
             66      ENACTS:
             67           53D-1-101 , Utah Code Annotated 1953
             68           53D-1-102 , Utah Code Annotated 1953
             69           53D-1-103 , Utah Code Annotated 1953
             70           53D-1-104 , Utah Code Annotated 1953
             71           53D-1-105 , Utah Code Annotated 1953
             72           53D-1-201 , Utah Code Annotated 1953
             73           53D-1-202 , Utah Code Annotated 1953
             74           53D-1-203 , Utah Code Annotated 1953
             75           53D-1-301 , Utah Code Annotated 1953
             76           53D-1-302 , Utah Code Annotated 1953
             77           53D-1-303 , Utah Code Annotated 1953
             78           53D-1-304 , Utah Code Annotated 1953
             79           53D-1-401 , Utah Code Annotated 1953
             80           53D-1-402 , Utah Code Annotated 1953
             81           53D-1-403 , Utah Code Annotated 1953
             82           53D-1-501 , Utah Code Annotated 1953
             83           53D-1-502 , Utah Code Annotated 1953
             84           53D-1-503 , Utah Code Annotated 1953


             85           53D-1-601 , Utah Code Annotated 1953
             86           53D-1-602 , Utah Code Annotated 1953
             87           53D-1-603 , Utah Code Annotated 1953
             88           53D-1-604 , Utah Code Annotated 1953
             89           53D-1-701 , Utah Code Annotated 1953
             90           53D-1-702 , Utah Code Annotated 1953
             91      REPEALS:
             92           51-7a-101 , as last amended by Laws of Utah 2011, Chapter 342
             93           51-7a-102 , as enacted by Laws of Utah 2006, Chapter 277
             94           51-7a-201 , as enacted by Laws of Utah 2006, Chapter 277
             95           51-7a-202 , as enacted by Laws of Utah 2006, Chapter 277
             96           51-7a-301 , as last amended by Laws of Utah 2010, Chapter 286
             97           51-7a-302 , as enacted by Laws of Utah 2006, Chapter 277
             98     
             99      Be it enacted by the Legislature of the state of Utah:
             100          Section 1. Section 53A-16-101.6 is amended to read:
             101           53A-16-101.6. Creation of School Children's Trust Section -- Duties.
             102          (1) As used in this section:
             103          (a) "School and institutional trust lands" is as defined in Section 53C-1-103 .
             104          (b) "Section" means the School Children's Trust Section created in this section.
             105          (c) "Trust" means:
             106          (i) the School LAND Trust Program created in Section 53A-16-101.5 ; and
             107          (ii) the lands and funds associated with the trusts described in Subsection
             108      53C-1-103 (7).
             109          (2) There is established a School Children's Trust Section within the State Office of
             110      Education.
             111          (3) (a) The section shall have a director.
             112          (b) The director shall have professional qualifications and expertise in the areas


             113      generating revenue to the trust, including:
             114          (i) economics;
             115          (ii) energy development;
             116          (iii) finance;
             117          (iv) investments;
             118          [(iv)] (v) public education;
             119          [(v)] (vi) real estate;
             120          [(vi)] (vii) renewable resources; [and]
             121          (viii) risk management; and
             122          [(vii)] (ix) trust law.
             123          (c) The director shall be appointed as provided in this Subsection (3).
             124          (d) The School and Institutional Trust Lands Board of Trustees nominating committee
             125      shall submit to the State Board of Education the name of one person to serve as director.
             126          (e) The State Board of Education may:
             127          (i) appoint the person described in Subsection (3)(d) to serve as director; or
             128          (ii) deny the appointment of the person described in Subsection (3)(d) to serve as
             129      director.
             130          (f) If the State Board of Education denies an appointment under this Subsection (3):
             131          (i) the State Board of Education shall provide in writing one or more reasons for the
             132      denial to the School and Institutional Trust Lands Board of Trustees nominating committee;
             133      and
             134          (ii) the School and Institutional Trust Lands Board of Trustees nominating committee
             135      and the State Board of Education shall follow the procedures and requirements of this
             136      Subsection (3) until the State Board of Education appoints a director.
             137          [(4) The director shall report to the state superintendent or the state superintendent's
             138      designee.]
             139          (g) The State Board of Education may remove the director only by majority vote of a
             140      quorum in an open and public meeting after proper notice and the inclusion of the removal item


             141      on the agenda.
             142          (4) The State Board of Education shall make rules regarding:
             143          (a) regular reporting from the School Children's Trust Section director to the State
             144      Board of Education, to allow the State Board of Education to fulfill its duties in representing
             145      the trust beneficiaries; and
             146          (b) the day-to-day reporting of the School Children's Trust Section director.
             147          (5) (a) The director shall annually submit a proposed section budget to the State Board
             148      of Education.
             149          (b) After approving a section budget, the State Board of Education shall propose the
             150      approved budget to the Legislature.
             151          (6) The director is entitled to attend any presentation, discussion, meeting, or other
             152      gathering concerning the trust, subject to:
             153          (a) provisions of law prohibiting the director's attendance to preserve confidentiality; or
             154          (b) other provisions of law that the director's attendance would violate.
             155          [(5)] (7) The section shall have a staff.
             156          [(6)] (8) The section shall protect current and future beneficiary rights and interests in
             157      the trust consistent with the state's perpetual obligations under:
             158          (a) the Utah Enabling Act;
             159          (b) the Utah Constitution;
             160          (c) state statute; and
             161          (d) standard trust principles described in Section 53C-1-102 .
             162          [(7)] (9) The section shall promote:
             163          (a) productive use of school and institutional trust lands[.]; and
             164          (b) the efficient and prudent investment of funds managed by the School and
             165      Institutional Trust Fund Office, created in Section 53D-1-201 .
             166          [(8)] (10) The section shall provide representation, advocacy, and input:
             167          (a) on behalf of current and future beneficiaries of the trust, school community
             168      councils, schools, and school districts;


             169          (b) on federal, state, and local land decisions and policies that affect the trust; and
             170          (c) to:
             171          (i) the School and Institutional Trust Lands Administration;
             172          (ii) the School and Institutional Trust Lands Board of Trustees;
             173          (iii) the Legislature;
             174          [(iv) the state treasurer;]
             175          (iv) the School and Institutional Trust Fund Office, created in Section 53D-1-201 ;
             176          (v) the School and Institutional Trust Fund Board of Trustees, created in Section
             177      53D-1-301 ;
             178          [(v)] (vi) the attorney general;
             179          [(vi)] (vii) the public; and
             180          [(vii)] (viii) other entities as determined by the section.
             181          [(9)] (11) The section shall provide independent oversight on the prudent and
             182      profitable management of the trust and report annually to the State Board of Education and the
             183      Legislature.
             184          [(10)] (12) The section shall provide information requested by a person or entity
             185      described in Subsections [(8)] (10)(c)(i) through [(v)] (vii).
             186          Section 2. Section 53C-1-201 is amended to read:
             187           53C-1-201. Creation of administration -- Purpose -- Director -- Participation in
             188      Risk Management Fund.
             189          (1) (a) There is established within state government the School and Institutional Trust
             190      Lands Administration.
             191          (b) The administration shall manage all school and institutional trust lands and assets
             192      within the state, except as otherwise provided in Title 53C, Chapter 3, Deposit and Allocation
             193      of Revenue from Trust Lands, and [Sections 51-7a-201 and 51-7a-202 ] Title 53D, Chapter 1,
             194      School and Institutional Trust Fund Management Act.
             195          (2) The administration is an independent state agency and not a division of any other
             196      department.


             197          (3) (a) It is subject to the usual legislative and executive department controls except as
             198      provided in this Subsection (3).
             199          (b) (i) The director may make rules as approved by the board that allow the
             200      administration to classify a business proposal submitted to the administration as protected
             201      under Section 63G-2-305 , for as long as is necessary to evaluate the proposal.
             202          (ii) The administration shall return the proposal to the party who submitted the
             203      proposal, and incur no further duties under Title 63G, Chapter 2, Government Records Access
             204      and Management Act, if the administration determines not to proceed with the proposal.
             205          (iii) The administration shall classify the proposal pursuant to law if it decides to
             206      proceed with the proposal.
             207          (iv) Section 63G-2-403 does not apply during the review period.
             208          (c) The director shall make rules in compliance with Title 63G, Chapter 3, Utah
             209      Administrative Rulemaking Act, except that the administration is not subject to Subsections
             210      63G-3-301 (6) and (7) and Section 63G-3-601 , and the director, with the board's approval, may
             211      establish a procedure for the expedited approval of rules, based on written findings by the
             212      director showing:
             213          (i) the changes in business opportunities affecting the assets of the trust;
             214          (ii) the specific business opportunity arising out of those changes which may be lost
             215      without the rule or changes to the rule;
             216          (iii) the reasons the normal procedures under Section 63G-3-301 cannot be met without
             217      causing the loss of the specific opportunity;
             218          (iv) approval by at least five board members; and
             219          (v) that the director has filed a copy of the rule and a rule analysis, stating the specific
             220      reasons and justifications for its findings, with the Division of Administrative Rules and
             221      notified interested parties as provided in Subsection 63G-3-301 (10).
             222          (d) (i) The administration shall comply with Title 67, Chapter 19, Utah State Personnel
             223      Management Act, except as provided in this Subsection (3)(d).
             224          (ii) The board may approve, upon recommendation of the director, that exemption for


             225      specific positions under Subsections 67-19-12 (2) and 67-19-15 (1) is required in order to enable
             226      the administration to efficiently fulfill its responsibilities under the law. The director shall
             227      consult with the executive director of the Department of Human Resource Management prior
             228      to making such a recommendation.
             229          (iii) The positions of director, deputy director, associate director, assistant director,
             230      legal counsel appointed under Section 53C-1-305 , administrative assistant, and public affairs
             231      officer are exempt under Subsections 67-19-12 (2) and 67-19-15 (1).
             232          (iv) Salaries for exempted positions, except for the director, shall be set by the director,
             233      after consultation with the executive director of the Department of Human Resource
             234      Management, within ranges approved by the board. The board and director shall consider
             235      salaries for similar positions in private enterprise and other public employment when setting
             236      salary ranges.
             237          (v) The board may create an annual incentive and bonus plan for the director and other
             238      administration employees designated by the board, based upon the attainment of financial
             239      performance goals and other measurable criteria defined and budgeted in advance by the board.
             240          (e) The administration shall comply with Title 63G, Chapter 6a, Utah Procurement
             241      Code, except where the board approves, upon recommendation of the director, exemption from
             242      the Utah Procurement Code, and simultaneous adoption of rules under Title 63G, Chapter 3,
             243      Utah Administrative Rulemaking Act, for procurement, which enable the administration to
             244      efficiently fulfill its responsibilities under the law.
             245          (f) (i) Except as provided in Subsection (3)(f)(ii), the administration is not subject to
             246      the fee agency requirements of Section 63J-1-504 .
             247          (ii) The following fees of the administration are subject to the requirements of Section
             248      63J-1-504 : application, assignment, amendment, affidavit for lost documents, name change,
             249      reinstatement, grazing nonuse, extension of time, partial conveyance, patent reissue, collateral
             250      assignment, electronic payment, and processing.
             251          (4) The administration is managed by a director of school and institutional trust lands
             252      appointed by a majority vote of the board of trustees with the consent of the governor.


             253          (5) (a) The board of trustees shall provide policies for the management of the
             254      administration and for the management of trust lands and assets.
             255          (b) The board shall provide policies for the ownership and control of Native American
             256      remains that are discovered or excavated on school and institutional trust lands in consultation
             257      with the Division of Indian Affairs and giving due consideration to Title 9, Chapter 9, Part 4,
             258      Native American Grave Protection and Repatriation Act. The director may make rules in
             259      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to implement
             260      policies provided by the board regarding Native American remains.
             261          (6) In connection with joint ventures and other transactions involving trust lands and
             262      minerals approved under Sections 53C-1-303 and 53C-2-401 , the administration, with board
             263      approval, may become a member of a limited liability company under Title 48, Chapter 2c,
             264      Utah Revised Limited Liability Company Act, or Title 48, Chapter 3a, Utah Revised Uniform
             265      Limited Liability Company Act, as appropriate pursuant to Section 48-3a-1405 and is
             266      considered a person under Section 48-2c-102 or Section 48-3a-102 .
             267          (7) Subject to the requirements of Subsection 63E-1-304 (2), the administration may
             268      participate in coverage under the Risk Management Fund created by Section 63A-4-201 .
             269          Section 3. Section 53C-1-203 is amended to read:
             270           53C-1-203. Board of trustees nominating committee -- Composition --
             271      Responsibilities -- Per diem and expenses.
             272          (1) There is established an 11 member board of trustees nominating committee.
             273          (2) (a) The State Board of Education shall appoint five members to the nominating
             274      committee from different geographical areas of the state.
             275          (b) The governor shall appoint five members to the nominating committee on or before
             276      the December 1 of the year preceding the vacancy on the nominating committee as follows:
             277          (i) one individual from a nomination list of at least two names of individuals
             278      knowledgeable about institutional trust lands submitted on or before the October 1 of the year
             279      preceding the vacancy on the nominating committee by the University of Utah and Utah State
             280      University on an alternating basis every four years;


             281          (ii) one individual from a nomination list of at least two names submitted by the Utah
             282      Farm Bureau in consultation with the Utah Cattleman's Association and the Utah Wool
             283      Growers' Association on or before the October 1 of the year preceding the vacancy on the
             284      nominating committee;
             285          (iii) one individual from a nomination list of at least two names submitted by the Utah
             286      Petroleum Association on or before the October 1 of the year preceding the vacancy on the
             287      nominating committee;
             288          (iv) one individual from a nomination list of at least two names submitted by the Utah
             289      Mining Association on or before the October 1 of the year preceding the vacancy on the
             290      nominating committee; and
             291          (v) one individual from a nomination list of at least two names submitted by the
             292      executive director of the Department of Natural Resources after consultation with statewide
             293      wildlife and conservation organizations on or before the October 1 of the year preceding the
             294      vacancy on the nominating committee.
             295          (c) The president of the Utah Association of Counties shall designate the chair of the
             296      Public Lands Steering Committee, who must be an elected county commissioner or councilor,
             297      to serve as the eleventh member of the nominating committee.
             298          (3) (a) Except as required by Subsection (3)(b), each member shall serve a four-year
             299      term.
             300          (b) Notwithstanding the requirements of Subsection (3)(a), the state board and the
             301      governor shall, at the time of appointment or reappointment, adjust the length of terms to
             302      ensure that the terms of committee members are staggered so that approximately half of the
             303      committee is appointed every two years.
             304          (c) When a vacancy occurs in the membership for any reason, the replacement shall be
             305      appointed for the unexpired term.
             306          (4) The nominating committee shall select a chair and vice chair from its membership
             307      by majority vote.
             308          (5) (a) The nominating committee shall nominate at least two candidates for each


             309      position or vacancy which occurs on the board of trustees except for the governor's appointee
             310      under Subsection 53C-1-202 (5).
             311          (b) The nominations shall be by majority vote of the committee.
             312          (6) A member may not receive compensation or benefits for the member's service, but
             313      may receive per diem and travel expenses in accordance with:
             314          (a) Section 63A-3-106 ;
             315          (b) Section 63A-3-107 ; and
             316          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
             317      63A-3-107 .
             318          (7) The School Children's Trust Section, established in Section 53A-16-101.6 , shall
             319      provide staff support to the nominating committee.
             320          Section 4. Section 53C-3-102 is amended to read:
             321           53C-3-102. Deposit and allocation of money received.
             322          (1) (a) The director shall pay to the [state treasurer] School and Institutional Trust Fund
             323      Office, created in Section 53D-1-201 , all money received, accompanied by a statement
             324      showing the respective sources of this money.
             325          (b) Each source shall be classified as to sales, rentals, royalties, interest, fees, penalties,
             326      and forfeitures.
             327          (2) All money received from the sale of lands granted by Section 6 of the Utah
             328      Enabling Act for the support of the common schools, all money received from the sale of lands
             329      selected in lieu of those lands, all money received from the United States under Section 9 of the
             330      Utah Enabling Act, all money received from the sale of lands or other securities acquired by the
             331      state from the investment of those funds, all sums paid for fees, all forfeitures, and all penalties
             332      paid in connection with these sales shall be deposited in the Permanent State School Fund.
             333          (3) All money received from the sale or other disposition of institutional trust lands
             334      granted to the state by the United States under Section 7, 8, or 12 of the Utah Enabling Act, and
             335      all sums paid for fees, forfeitures, and penalties received in connection with these sales or
             336      dispositions shall go to the respective permanent funds established for the benefit of those


             337      institutions under the Utah Enabling Act and the Utah Constitution.
             338          (4) (a) All lands acquired by the state through foreclosure of mortgages securing school
             339      or institutional trust funds or through deeds from mortgagors or owners of those lands shall
             340      become a part of the respective school or institutional trust lands.
             341          (b) All money received from these lands shall be treated as money received from
             342      school or institutional trust lands.
             343          (5) All money received from the sale of lands acquired by the state through foreclosure
             344      of mortgages securing trust funds or through deeds from mortgagors or owners of such lands,
             345      whether a profit is realized or a loss sustained on the principal invested, shall be regarded as
             346      principal and shall go into the principal or permanent fund from which it was originally taken
             347      in reimbursement of that fund, with profits being used to offset losses.
             348          (6) (a) All money received by the director as a first or down payment on applications to
             349      purchase, permit, or lease trust lands or minerals shall be paid to the state treasurer and held in
             350      suspense pending final action on those applications.
             351          (b) After final action the payments received under Subsection (6)(a) shall either be
             352      credited to the appropriate fund or account, or refunded to the applicant in accordance with the
             353      action taken.
             354          Section 5. Section 53D-1-101 is enacted to read:
             355     
TITLE 53D. SCHOOL AND INSTITUTIONAL TRUST FUND

             356     
CHAPTER 1. SCHOOL AND INSTITUTIONAL TRUST FUND MANAGEMENT     ACT

             357     
Part 1. General Provisions

             358          53D-1-101. Title.
             359          (1) This title is known as "School and Institutional Trust Fund."
             360          (2) This chapter is known as the "School and Institutional Trust Fund Management
             361      Act."
             362          Section 6. Section 53D-1-102 is enacted to read:
             363          53D-1-102. Definitions.
             364          (1) "Account" means the School and Institutional Trust Fund Management Account,


             365      created in Section 53D-1-203 .
             366          (2) "Beneficiaries":
             367          (a) means those for whose benefit the trust fund is managed and preserved, consistent
             368      with the enabling act, the Utah Constitution, and state law; and
             369          (b) does not include other government institutions or agencies, the public at large, or
             370      the general welfare of the state.
             371          (3) "Board" means the board of trustees established in Section 53D-1-301 .
             372          (4) "Director" means the director of the office.
             373          (5) "Enabling act" means the act of Congress, dated July 16, 1894, enabling the people
             374      of Utah to form a constitution and state government and to be admitted into the Union.
             375          (6) "Nominating committee" means the committee established under Section
             376      53D-1-501 .
             377          (7) "Office" means the School and Institutional Trust Fund Office, created in Section
             378      53D-1-201 .
             379          (8) "School children's trust section" means the School Children's Trust Section within
             380      the State Office of Education, established in Section 53A-16-101.6 .
             381          (9) "Trust fund" means money derived from:
             382          (a) the sale or use of land granted to the state under Sections 6, 8, and 12 of the
             383      enabling act;
             384          (b) proceeds referred to in Section 9 of the enabling act from the sale of public land;
             385      and
             386          (c) revenue and assets referred to in Utah Constitution, Article X, Section 5,
             387      Subsections (1)(c), (e), and (f).
             388          Section 7. Section 53D-1-103 is enacted to read:
             389          53D-1-103. Application of other law.
             390          (1) The office, board, and nominating committee are subject to Title 52, Chapter 4,
             391      Open and Public Meetings Act.
             392          (2) Subject to Subsection 63E-1-304 (2), the office may participate in coverage under


             393      the Risk Management Fund, created in Section 63A-4-201 .
             394          (3) The office and board are subject to Title 63G, Chapter 2, Government Records
             395      Access and Management Act.
             396          (4) (a) In making rules under this chapter, the director is subject to and shall comply
             397      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, except as provided in
             398      Subsection (4)(b).
             399          (b) Subsections 63G-3-301 (6) and (7) and Section 63G-3-601 do not apply to the
             400      director's making of rules under this chapter.
             401          (5) Title 63G, Chapter 7, Governmental Immunity Act of Utah, applies to a board
             402      member to the same extent as it applies to an employee, as defined in Section 63G-7-102 .
             403          (6) (a) A board member, the director, and an office employee or agent are subject to:
             404          (i) Title 67, Chapter 16, Utah Public Officers' and Employees' Ethics Act; and
             405          (ii) other requirements that the board establishes.
             406          (b) In addition to any restrictions or requirements imposed under Subsection (6)(a), a
             407      board member, the director, and an office employee or agent may not directly or indirectly
             408      acquire an interest in the trust fund or receive any direct benefit from any transaction dealing
             409      with trust fund money.
             410          (7) (a) Except as provided in Subsection (7)(b), the office shall comply with Title 67,
             411      Chapter 19, Utah State Personnel Management Act.
             412          (b) (i) Upon a recommendation from the director after the director's consultation with
             413      the executive director of the Department of Human Resource Management, the board may
             414      provide that specified positions in the office are exempt from Section 67-19-12 and the career
             415      service provisions of Title 67, Chapter 19, Utah State Personnel Management Act, as provided
             416      in Subsection 67-19-15 (1), if the board determines that exemption is required for the office to
             417      fulfill efficiently its responsibilities under this chapter.
             418          (ii) The director position is exempt from Section 67-19-12 and the career service
             419      provisions of Title 67, Chapter 19, Utah State Personnel Management Act, as provided in
             420      Subsection 67-19-15 (1).


             421          (iii) (A) After consultation with the executive director of the Department of Human
             422      Resource Management, the director shall set salaries for positions that are exempted under
             423      Subsection (7)(b)(i), within ranges that the board approves.
             424          (B) In approving salary ranges for positions that are exempted under Subsection
             425      (7)(b)(i), the board shall consider salaries for similar positions in private enterprise and other
             426      public employment.
             427          (8) The office is subject to legislative appropriation, to executive branch budgetary
             428      review and recommendation, and to legislative and executive branch review.
             429          Section 8. Section 53D-1-104 is enacted to read:
             430          53D-1-104. Attorney general representation.
             431          (1) The attorney general shall:
             432          (a) represent the board, director, and office in any legal action relating to the trust fund;
             433          (b) undertake suits for damages and any other necessary or appropriate relief in the
             434      name of the trust fund and the state; and
             435          (c) ensure that legal counsel assigned to provide legal counsel to the board, director,
             436      and office is present at all board meetings.
             437          (2) The attorney general may institute an action to enforce this chapter or to protect the
             438      interests of beneficiaries.
             439          Section 9. Section 53D-1-105 is enacted to read:
             440          53D-1-105. Annual audit by state auditor.
             441          (1) The state auditor shall conduct an annual audit of the trust fund money and assets
             442      on a fund by fund basis, including:
             443          (a) an evaluation of the independent custodial arrangements made for the management
             444      and investment of trust fund money and assets; and
             445          (b) a verification of the accuracy of the office's report of returns generated on the
             446      office's investments.
             447          (2) The state auditor shall:
             448          (a) report the results of an audit under this section in writing; and


             449          (b) make the written audit report available to the public.
             450          (3) The state auditor shall consult with the board at least annually as to whether
             451      additional matters should be included within the scope of the annual audit.
             452          Section 10. Section 53D-1-201 is enacted to read:
             453     
Part 2. School and Institutional Trust Fund Office

             454          53D-1-201. School and Institutional Trust Fund Office -- Status -- Duties.
             455          (1) There is created within state government the School and Institutional Trust Fund
             456      Office.
             457          (2) The office is an independent state agency within the executive branch and is not a
             458      division of any other executive branch department.
             459          (3) The office shall manage the trust fund.
             460          (4) No later than September 1 of each year, the office shall provide to the Division of
             461      Finance financial information for the prior fiscal year that the Division of Finance requests for
             462      financial reporting purposes.
             463          Section 11. Section 53D-1-202 is enacted to read:
             464          53D-1-202. Access to office records and personnel.
             465          (1) The office shall provide board members and the director of the school children's
             466      trust section access to all office records and personnel as necessary for board members and the
             467      director of the school children's trust section to fulfill their responsibilities to ensure that the
             468      office is in full compliance with applicable law and policies.
             469          (2) If the director requires, board members and the director of the school children's
             470      trust section shall maintain confidentiality of information they obtain from office records and
             471      personnel.
             472          Section 12. Section 53D-1-203 is enacted to read:
             473          53D-1-203. Funding of office operations.
             474          (1) There is created an enterprise fund known as the School and Institutional Trust
             475      Fund Management Account.
             476          (2) The account is funded by money deposited into the account as provided in


             477      Subsection (3).
             478          (3) The director shall deposit into the account an amount of money from the earnings
             479      from trust fund assets equal to the annual appropriation that the Legislature makes to the office,
             480      to pay for the office's operating costs.
             481          (4) (a) The office may use money in the account to pay for the office's operating costs.
             482          (b) If the amount of money deposited into the account under Subsection (3) in any year
             483      exceeds the amount required by the office during that year to fund its operations, the office
             484      shall distribute that excess money proportionately to the various funds established for the
             485      beneficiaries of land grants under the enabling act, based on the balances of those funds as of
             486      June 30.
             487          (5) (a) Before distributing earnings from trust fund assets, the office may deduct any
             488      audit, risk management, consulting, equipment, legal, and custodial costs and management fees
             489      incurred in managing the trust fund assets.
             490          (b) The costs and fees described in Subsection (5)(a) are separate from and in addition
             491      to the office's operating costs that are paid from the account.
             492          Section 13. Section 53D-1-301 is enacted to read:
             493     
Part 3. School and Institutional Trust Fund Board of Trustees

             494          53D-1-301. Board of trustees -- Creation -- Membership.
             495          (1) There is created a School and Institutional Trust Fund Board of Trustees.
             496          (2) The board consists of:
             497          (a) the state treasurer; and
             498          (b) four additional members who are appointed by the state treasurer on a nonpartisan
             499      basis from a list of at least two qualified candidates per position, nominated by the nominating
             500      committee, as provided in Section 53D-1-503 .
             501          (3) The state treasurer shall appoint members under Subsection (2)(b) who possess:
             502          (a) outstanding professional qualifications pertinent to the prudent investment of trust
             503      fund money; and
             504          (b) expertise in institutional investment management.


             505          (4) (a) The term of a board member under Subsection (2)(b) is six years.
             506          (b) Notwithstanding Subsection (4)(a), the nominating committee shall stagger terms
             507      of initial board members so that the term of not more than one member expires in any year.
             508          (c) A board member may not serve consecutive terms, except that:
             509          (i) a board member whose term is less than six years because of the staggering of terms
             510      under Subsection (4)(b) may serve a full consecutive term after the completion of the initial
             511      term; and
             512          (ii) a member appointed to fill a vacancy may serve a full consecutive term after filling
             513      a previous unexpired term.
             514          (d) A board member shall serve until a successor is appointed, confirmed, and
             515      qualified.
             516          (5) Before assuming duties as a board member, a member shall take an oath of office
             517      that includes the following:
             518          "I solemnly swear to carry out my duties as a member of the School and Institutional
             519      Trust Fund Board of Trustees and to act with undivided loyalty to the beneficiaries of the trust
             520      fund that the board oversees, to the best of my abilities and consistent with the law."
             521          (6) The state treasurer may remove a board member for cause, subject to the
             522      affirmative vote of at least two other board members, besides the state treasurer.
             523          (7) The state treasurer shall fill a vacancy in the same manner as the initial appointment
             524      under Subsection (2)(b)(i).
             525          (8) A board member may not receive any compensation or benefits for the member's
             526      service, but the member may receive per diem and travel expenses in accordance with:
             527          (a) Section 63A-3-106 ;
             528          (b) Section 63A-3-107 ; and
             529          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
             530      63A-3-107 .
             531          Section 14. Section 53D-1-302 is enacted to read:
             532          53D-1-302. Board chair and vice chair -- Quorum.


             533          (1) (a) The state treasurer is the chair of the board.
             534          (b) The chair shall faithfully represent the will of the board to the extent the board's
             535      will is consistent with state law.
             536          (2) (a) The board shall annually select a vice chair from its membership.
             537          (b) The vice chair shall act as chair in the absence of the chair.
             538          (3) (a) Three members of the board constitute a quorum for the purpose of holding a
             539      meeting.
             540          (b) Unless otherwise specified in this title, an action of the board requires the
             541      affirmative vote of at least three members.
             542          Section 15. Section 53D-1-303 is enacted to read:
             543          53D-1-303. Board authority and duties.
             544          (1) The board has broad policymaking authority over the office and the trust fund.
             545          (2) (a) The board shall establish policies for the management of:
             546          (i) the office, including:
             547          (A) an investment management code of conduct and associated compliance policy;
             548          (B) a policy for the strategic allocation of trust fund assets;
             549          (C) a soft dollar policy; and
             550          (D) a policy articulating the board's investment philosophy for trust fund assets; and
             551          (ii) the trust fund.
             552          (b) Policies that the board adopts shall:
             553          (i) be consistent with the enabling act, the Utah Constitution, and other applicable state
             554      law;
             555          (ii) reflect undivided loyalty to the beneficiaries consistent with fiduciary duties;
             556          (iii) be designed to prudently optimize trust fund returns and increase the value of the
             557      trust fund, consistent with the balancing of short-term and long-term interests, so that the
             558      fiduciary duty of intergenerational equity is met;
             559          (iv) be designed to maintain the integrity of the trust fund and prevent the
             560      misapplication of money in the trust fund;


             561          (v) enable the board to oversee the activities of the office; and
             562          (vi) otherwise be in accordance with standard trust principles as provided by state law.
             563          (3) The board shall:
             564          (a) establish a conflict of interest policy for the office and board members;
             565          (b) establish policies governing the evaluation, selection, and monitoring of
             566      independent custodial arrangements;
             567          (c) ensure that the office is managed according to law;
             568          (d) establish bylaws to govern the board;
             569          (e) establish the compensation of the director;
             570          (f) annually examine the compensation and performance of the director as part of the
             571      board's budget review process;
             572          (g) annually report the director's compensation to the Legislature; and
             573          (h) adopt policies to provide for annual training of board members regarding their
             574      duties and responsibilities.
             575          (4) The board may:
             576          (a) after conferring with the director:
             577          (i) hire one or more consultants to advise the board, director, or office on issues
             578      affecting the management of the trust fund; and
             579          (ii) pay compensation to any consultant hired under Subsection (4)(a)(i), subject to
             580      budgetary constraints; and
             581          (b) submit to the director a written question or set of questions concerning policies and
             582      practices affecting the management of the trust fund.
             583          Section 16. Section 53D-1-304 is enacted to read:
             584          53D-1-304. Board meetings.
             585          (1) The board shall hold at least nine meetings per year to conduct business.
             586          (2) The board chair or two board members:
             587          (a) may call a board meeting; and
             588          (b) if calling a board meeting, shall provide as much advance notice as is reasonable


             589      under the circumstances to all board members, the director, and the director of the school
             590      children's trust section.
             591          (3) Any board member may place an item on a board meeting agenda.
             592          (4) The board shall annually adopt a set of parliamentary procedures to govern board
             593      meetings.
             594          (5) The board may establish an attendance policy to govern the attendance of board
             595      members at board meetings.
             596          Section 17. Section 53D-1-401 is enacted to read:
             597     
Part 4. Director

             598          53D-1-401. Appointment of director -- Qualifications -- Nature of employment --
             599      Removal by State Board of Education petition.
             600          (1) The office shall be managed by a director.
             601          (2) On or before January 25, 2015, the board shall appoint an individual as director.
             602          (3) The board shall ensure that an individual appointed as director possesses:
             603          (a) outstanding professional qualifications pertinent to the prudent investment of trust
             604      fund money; and
             605          (b) expertise in institutional investment management.
             606          (4) The director is an at-will employee who may be removed by the board at any time
             607      with or without cause.
             608          (5) (a) The State Board of Education may submit a written petition to the board
             609      requesting the board to remove the director for cause, explained in the petition.
             610          (b) The board shall hold a hearing on a petition under Subsection (5)(a) within 45 days
             611      after receiving the petition.
             612          (c) If, after holding a hearing, the board finds by a preponderance of the evidence that
             613      there is cause for removing the director, the board shall remove the director.
             614          Section 18. Section 53D-1-402 is enacted to read:
             615          53D-1-402. Director duties and responsibilities.
             616          (1) The director has broad authority to manage the office to fulfill its purposes,


             617      consistent with the enabling act, the Utah Constitution, state law, and board policies.
             618          (2) The director shall:
             619          (a) before assuming the duties of director, take an oath that includes the following:
             620          "I solemnly swear to carry out my duties as director of the School and Institutional
             621      Trust Fund Office with undivided loyalty to the beneficiaries of the trust fund managed by the
             622      office, to the best of my abilities and consistent with the law.";
             623          (b) carry out the policies of the board;
             624          (c) act with undivided loyalty to those entitled to the benefit of income from the trust
             625      fund, consistent with the director's fiduciary duties and responsibilities;
             626          (d) follow the prudent investor rule, prudently seeking to obtain the optimum return
             627      from the investment of trust fund money and assets, balancing short-term and long-term
             628      interests under the principle of intergenerational equity;
             629          (e) exercise full discretionary authority to manage, maintain, transfer, or sell assets of
             630      the trust fund in the manner that the director determines to be most favorable to beneficiaries;
             631          (f) maintain the integrity of the trust fund and prevent, through prudent management,
             632      the misapplication of trust fund money;
             633          (g) adopt rules, as provided in Subsection 53D-1-103 (3), that are necessary for the
             634      proper exercise of the director's duties under this chapter and policies established by the board;
             635          (h) faithfully manage the office under policies established by the board;
             636          (i) annually submit to the board:
             637          (i) an office budget; and
             638          (ii) a financial plan for operations of the office;
             639          (j) after board approval of the office budget, submit the budget to the governor and the
             640      Legislature;
             641          (k) direct and control budget expenditures;
             642          (l) establish job descriptions and, within budgetary constraints, employ staff necessary
             643      to accomplish the purposes of the office;
             644          (m) in accordance with generally accepted principles of fund accounting, establish a


             645      system to identify and account for the trust fund assets;
             646          (n) notify the director of the school children's trust section of major items that the
             647      director knows may be useful to the director of the school children's trust section in protecting
             648      the rights of beneficiaries;
             649          (o) maintain appropriate records of trust fund activities to enable auditors to conduct
             650      periodic audits;
             651          (p) respond in writing within a reasonable time to a request by the director of the
             652      school children's trust section for information on policies and practices affecting the
             653      management of the trust fund; and
             654          (q) respond to a question that the board submits under Subsection 53D-1-303 (4)(c)
             655      within a reasonable time after receiving the question.
             656          (3) The office may:
             657          (a) sue or be sued; and
             658          (b) contract with other public agencies for personnel management services.
             659          Section 19. Section 53D-1-403 is enacted to read:
             660          53D-1-403. Reports.
             661          (1) At least annually, the director shall report in person to the Legislative Management
             662      Committee, the governor, and the State Board of Education, concerning the office's
             663      investments, performance, estimated distributions, and other activities.
             664          (2) The director shall report to the board concerning the work of the director and the
             665      investment activities and other activities of the office:
             666          (a) in a public meeting at least nine times per year; and
             667          (b) as otherwise requested by the board.
             668          (3) (a) Before November 1 of each year, the director shall:
             669          (i) submit a written report to each school community council, created under Section
             670      53A-1a-108 , concerning the office's investments, performance, estimated distributions, and
             671      other activities; and
             672          (ii) post the written report described in Subsection (3)(a)(i) on the office's website.


             673          (b) A report under Subsection (3)(a) shall be prepared in simple language designed to
             674      be understood by the general public.
             675          (4) The director shall provide to the board:
             676          (a) monthly written reports on the activities of the office;
             677          (b) quarterly financial reports; and
             678          (c) any other report requested by the board.
             679          (5) The director shall:
             680          (a) invite the director of the school children's trust section to attend any meeting at
             681      which the director gives a report under this section; and
             682          (b) provide the director of the school children's trust section:
             683          (i) a copy of any written report prepared under this section; and
             684          (ii) any other report requested by the director of the school children's trust section.
             685          Section 20. Section 53D-1-501 is enacted to read:
             686     
Part 5. Nominating Committee

             687          53D-1-501. Nominating committee -- Membership -- Terms -- Vacancies --
             688      Compensation.
             689          (1) There is established a School and Institutional Trust Fund Nominating Committee.
             690          (2) The nominating committee consists of:
             691          (a) two members appointed by the State Board of Education;
             692          (b) two members, appointed by the director of the school children's trust section, each
             693      of whom is a member of a respected professional organization;
             694          (c) the chief investment officer of the University of Utah endowment;
             695          (d) the chief investment officer of the Utah State University endowment; and
             696          (e) the director of the school children's trust section.
             697          (3) An individual appointed as a member of the nominating committee under
             698      Subsection (2)(a) or (b) shall be appointed based on the individual's expertise in:
             699          (a) investment finance;
             700          (b) institutional asset management;


             701          (c) trust administration; or
             702          (d) the practice of law in the areas of capital markets, securities law, trusts,
             703      foundations, endowments, investment finance, institutional asset management, or trust
             704      administration.
             705          (4) The term of a member appointed under Subsection (2)(a) or (b) is four years, except
             706      that the initial term of members appointed under Subsection (2)(b) is two years.
             707          (5) A nominating committee member shall serve until a successor is appointed and
             708      qualified.
             709          (6) (a) If a member appointed under Subsection (2)(a) or (b) leaves office, the vacancy
             710      shall be filled in the same manner as the initial appointment under Subsection (2)(a) or (b).
             711          (b) An individual appointed to fill a vacancy under Subsection (6)(a) serves the
             712      remainder of the unexpired term.
             713          (7) A member of the nominating committee may not receive compensation or benefits
             714      for the member's service, but may receive per diem and travel expenses in accordance with:
             715          (a) Section 63A-3-106 ;
             716          (b) Section 63A-3-107 ; and
             717          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
             718      63A-3-107 .
             719          Section 21. Section 53D-1-502 is enacted to read:
             720          53D-1-502. Chair and vice chair -- Quorum and voting requirements -- Bylaws --
             721      Staff.
             722          (1) The nominating committee shall select a chair and vice chair from its members.
             723          (2) (a) Four members of the nominating committee constitute a quorum.
             724          (b) An action of the nominating committee requires the affirmative vote of at least four
             725      members.
             726          (3) The nominating committee shall establish bylaws to govern the nominating
             727      committee.
             728          (4) The school children's trust section shall provide staff support to the nominating


             729      committee.
             730          Section 22. Section 53D-1-503 is enacted to read:
             731          53D-1-503. Process of nominating candidates for board membership.
             732          (1) The nominating committee shall nominate at least two candidates for each position
             733      or vacancy on the board.
             734          (2) The nominating committee shall:
             735          (a) nominate candidates who meet the criteria stated in Subsection 53D-1-301 (3); and
             736          (b) consider the character and reputation of candidates the nominating committee
             737      nominates.
             738          (3) If the state treasurer considers the candidates nominated under Subsection (1) to be
             739      unacceptable, the state treasurer may request the nominating committee to nominate at least
             740      two other candidates per appointment.
             741          (4) As many times as the state treasurer considers candidates nominated by the
             742      nominating committee to be unacceptable under Subsection (3), the nominating committee
             743      shall follow the process described in Subsections (1) and (2) until the state treasurer appoints a
             744      candidate.
             745          Section 23. Section 53D-1-601 is enacted to read:
             746     
Part 6. Management and Investment Standards and Principles

             747          53D-1-601. General management and investment principles -- Duty of person with
             748      special skills or expertise.
             749          (1) Board members, the director, and office staff shall act in the best interests of the
             750      beneficiaries and comply with the duty of undivided loyalty to the beneficiaries.
             751          (2) A person who manages and invests trust fund money or assets shall:
             752          (a) manage and invest in good faith and with the care a prudent professional in a like
             753      position would exercise under similar circumstances;
             754          (b) consider, as relevant:
             755          (i) general economic conditions;
             756          (ii) the possible effect of inflation or deflation;


             757          (iii) any expected tax consequences of investment decisions or strategies;
             758          (iv) the role that each investment or course of action plays within the overall
             759      investment portfolio of the trust fund;
             760          (v) the expected net return from income and the appreciation of investments;
             761          (vi) the expected returns and risk characteristics of individual assets;
             762          (vii) the needs of the beneficiaries to receive distributions and to preserve capital;
             763          (viii) liquidity;
             764          (ix) asset allocation; and
             765          (x) costs and management fees; and
             766          (c) make management and investment decisions about an individual asset not in
             767      isolation but in the context of the trust fund's portfolio of investments as a whole and as part of
             768      an overall investment strategy, having risk and return objectives reasonably suited to the trust
             769      fund and to the beneficiaries.
             770          (3) A person who has special skills or expertise, or who is selected to assist in
             771      managing and investing the trust fund money or assets based on the person's representation of
             772      having special skills or expertise, has a duty to use those skills and that expertise in managing
             773      and investing trust fund money and assets.
             774          Section 24. Section 53D-1-602 is enacted to read:
             775          53D-1-602. Office authority, responsibilities, and duties.
             776          (1) In managing and investing trust fund money and assets, the office:
             777          (a) may incur only costs that are appropriate and reasonable in relation to the assets, the
             778      purposes of the trust fund, and the skills available to the office; and
             779          (b) shall make a reasonable effort to verify facts related to the management and
             780      investment of trust fund money and assets.
             781          (2) Except as otherwise provided by law, the office may invest in any kind of property
             782      or any type of investment that is:
             783          (a) consistent with this part; and
             784          (b) in the best interests of the beneficiaries.


             785          (3) The office shall diversify the investments of trust fund money and assets.
             786          (4) Within a reasonable time after receiving a contribution to the trust fund, the office
             787      shall make and carry out decisions concerning the retention or disposition of the contribution or
             788      to rebalance the trust fund portfolio, in order to bring the trust fund into compliance with the
             789      purposes, terms, and distribution requirements of trust fund money and assets.
             790          (5) The board may delegate any management or investment function to the director, a
             791      committee of board members, or an employee of the office.
             792          Section 25. Section 53D-1-603 is enacted to read:
             793          53D-1-603. Director authority, responsibilities, and duties.
             794          (1) (a) The director may delegate to an external agent the management of a portion of
             795      the trust fund money or assets, if the delegation is prudent under the circumstances and
             796      consistent with the purposes of the trust fund.
             797          (b) The director shall periodically review the actions of an agent under Subsection
             798      (1)(a) in order to monitor the agent's performance and compliance with the scope and terms of
             799      the delegation.
             800          (2) The director shall act in good faith, with the care that a prudent professional in a
             801      like position would exercise under similar circumstances, in:
             802          (a) selecting an agent;
             803          (b) establishing the scope and terms of a delegation under Subsection (1); and
             804          (c) periodically reviewing the agent's actions, as provided in Subsection (1)(b).
             805          (3) In performing a delegated function, an agent owes a duty to the state and the
             806      beneficiaries to exercise reasonable care to comply with the scope and terms of the delegation.
             807          Section 26. Section 53D-1-604 is enacted to read:
             808          53D-1-604. Compliance not determined by hindsight.
             809          Compliance with a provision of this part in making a decision or taking an action is
             810      determined in light of the facts and circumstances existing at the time a decision is made or an
             811      action is taken and not by hindsight.
             812          Section 27. Section 53D-1-701 is enacted to read:


             813     
Part 7. Review of Decisions or Actions

             814          53D-1-701. Petition for review of director or office decision or action -- Hearing
             815      examiner -- Decision -- Judicial review.
             816          (1) (a) Subject to Subsection (1)(b), a person aggrieved by a decision or action of the
             817      director or office may, in accordance with rules adopted by the board under Section 53D-1-702 ,
             818      petition the board for an administrative review of the decision or action.
             819          (b) A person may not petition for review of:
             820          (i) a decision whether to buy, sell, hold, or exchange a specific investment; or
             821          (ii) an action to buy, sell, hold, or exchange a specific investment.
             822          (2) (a) The board may appoint a qualified hearing examiner to take evidence and make
             823      a recommendation for board action on the petition.
             824          (b) If the board appoints a hearing examiner under Subsection (2)(a), the board shall, in
             825      conducting its review and making its decision on the petition, consider the hearing examiner's
             826      recommendation.
             827          (3) In making its decision on the petition, the board shall:
             828          (a) make findings and conclusions and base its decision on the findings and
             829      conclusions;
             830          (b) uphold the decision or action of the director or office unless the board finds, by a
             831      preponderance of the evidence, that the decision or action violated applicable law, policy, or
             832      rule; and
             833          (c) inform the person who filed the petition of the person's right to judicial review of
             834      the board's decision.
             835          (4) A person aggrieved by a final decision of the board on a petition filed under this
             836      section may seek judicial review of that decision as provided in Sections 63G-4-402 and
             837      63G-4-403 .
             838          Section 28. Section 53D-1-702 is enacted to read:
             839          53D-1-702. Board rules on petition for review of director or office decision or
             840      action.


             841          (1) The board shall make rules, in accordance with Title 63G, Chapter 3, Utah
             842      Administrative Rulemaking Act, to govern proceedings on a petition under Section 53D-1-701 .
             843          (2) Rules under Subsection (1) shall ensure procedural due process in proceedings
             844      relating to a petition under Section 53D-1-701 .
             845          Section 29. Section 63E-1-102 is amended to read:
             846           63E-1-102. Definitions -- List of Independent entities.
             847          As used in this title:
             848          (1) "Authorizing statute" means the statute creating an entity as an independent entity.
             849          (2) "Committee" means the Retirement and Independent Entities Committee created by
             850      Section 63E-1-201 .
             851          (3) "Independent corporation" means a corporation incorporated in accordance with
             852      Chapter 2, Independent Corporations Act.
             853          (4) (a) "Independent entity" means an entity having a public purpose relating to the
             854      state or its citizens that is individually created by the state or is given by the state the right to
             855      exist and conduct its affairs as an:
             856          (i) independent state agency; or
             857          (ii) independent corporation.
             858          (b) "Independent entity" includes the:
             859          (i) Utah Dairy Commission created by Section 4-22-2 ;
             860          (ii) Heber Valley Historic Railroad Authority created by Section 63H-4-102 ;
             861          (iii) Utah State Railroad Museum Authority created by Section 63H-5-102 ;
             862          (iv) Utah Science Center Authority created by Section 63H-3-103 ;
             863          (v) Utah Housing Corporation created by Section 35A-8-704 ;
             864          (vi) Utah State Fair Corporation created by Section 63H-6-103 ;
             865          (vii) Workers' Compensation Fund created by Section 31A-33-102 ;
             866          (viii) Utah State Retirement Office created by Section 49-11-201 ;
             867          (ix) School and Institutional Trust Lands Administration created by Section
             868      53C-1-201 ;


             869          (x) School and Institutional Trust Fund Office created by Section 53D-1-201 ;
             870          [(x)] (xi) Utah Communications Agency Network created by Section 63C-7-201 ;
             871          [(xi)] (xii) Utah Energy Infrastructure Authority created by Section 63H-2-201 ;
             872          [(xii)] (xiii) Utah Capital Investment Corporation created by Section 63M-1-1207 ; and
             873          [(xiii)] (xiv) Military Installation Development Authority created by Section
             874      63H-1-201 .
             875          (c) Notwithstanding this Subsection (4), "independent entity" does not include:
             876          (i) the Public Service Commission of Utah created by Section 54-1-1 ;
             877          (ii) an institution within the state system of higher education;
             878          (iii) a city, county, or town;
             879          (iv) a local school district;
             880          (v) a local district under Title 17B, Limited Purpose Local Government Entities - Local
             881      Districts; or
             882          (vi) a special service district under Title 17D, Chapter 1, Special Service District Act.
             883          (5) "Independent state agency" means an entity that is created by the state, but is
             884      independent of the governor's direct supervisory control.
             885          (6) "Money held in trust" means money maintained for the benefit of:
             886          (a) one or more private individuals, including public employees;
             887          (b) one or more public or private entities; or
             888          (c) the owners of a quasi-public corporation.
             889          (7) "Public corporation" means an artificial person, public in ownership, individually
             890      created by the state as a body politic and corporate for the administration of a public purpose
             891      relating to the state or its citizens.
             892          (8) "Quasi-public corporation" means an artificial person, private in ownership,
             893      individually created as a corporation by the state which has accepted from the state the grant of
             894      a franchise or contract involving the performance of a public purpose relating to the state or its
             895      citizens.
             896          Section 30. Repealer.


             897          This bill repeals:
             898          Section 51-7a-101 , Title.
             899          Section 51-7a-102 , Definitions.
             900          Section 51-7a-201 , Investment of land grant trust funds.
             901          Section 51-7a-202 , State treasurer to follow "prudent investor" rule -- Standard of
             902      care.
             903          Section 51-7a-301 , Investment advisory committee -- Creation.
             904          Section 51-7a-302 , Investment advisory committee -- Duties.
             905          Section 31. Effective date.
             906          This bill takes effect on July 1, 2014.


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