instructions that the broker can disburse the monies upon written consent of both parties, by court order, or pursuant to the terms of the new real estate purchase contract. Many brokers wanted the authority to release the monies based on the strength of the written agreement of the parties in the real estate purchase contract. If the parties do nothing, the money will escheat to the state as lost property after five years. It is their hope that the changes to the rule will not invite additional litigation.

    Rep. Harward asked if the process would be better served if the money were to be deposited with the division.

    Mr. Boyer stated the division's mission is to protect the public from unscrupulous real estate professionals. By keeping the broker in the middle of the situation, it frequently works. If the division were to hold the funds, the division would be the one to be sued.

    Mr. Max Thompson, Real Estate - Utah Association, indicated said they have numerous instances where mediation is necessary. The biggest difficulty has been the interpleader process itself. He said he did not think a broker could ever really remove himself from that action. Mr. Thompson noted that the proposed change implements a simpler approach. It is definitely an improvement to the industry.

    Rep. Harward felt the problem needs to be resolved by statute.

    Mr. Boyer requested that the rule be given some time to determine the affect it will have.

4.    R501-15 Utah Social Services Delivery System Data Bases Screening (Existing Rule _ No Bulletin Issue) (Rep. Harward) - Mr. Layne Meacham, Social Worker, distributed an analysis of the rule. He questioned the existence of statutory authority that allows the establishment of a data base to place individual's names on it without due process and then later deny them licenses, privileges, and contracts. He recommended that aspects of R501-15 be sunsetted that are unsupported by statute and/or unconstitutional.

    Rep. Harward asked the department for the specific section of the code which allows for use of the data base in licensing screening. He asked if there was anything in the data base that reflects criminal history.

    Ms. Robyn Arnold-Williams, Executive Director, Department of Human Services responded there is no criminal history reflected in the data base. She stated Sections 62A-2-105 and 106 allows the licensing committee, created by statute, to establish the standards for approving, denying, suspending, and revoking licenses. That is the provision under which they have included this information. Ms. Williams said the standards for child programs are

established by the Board of Child and Family Services. She said that a case worker will make a determination that someone is being substantiated for child abuse or neglect. At the close of that case, a certified letter is sent to the individual notifying them of that fact and of their right to appeal the decision. They have put an appeal procedure in the process. She said there are people whose names are on the data base that have not gone through that process. They are working with the board in terms of what the policy should be to afford those individuals due process and what statutory changes should be made.

    Mr. Scott Clark, Chair, Board of Child and Family Services, suggested the statutory authorization for the present procedure is either nonexistent or weak. However, that does not mean that what is happening is inappropriate or is not needed. The data base is used appropriately for decisions such as making foster care placement and to determine if someone will supply services to the division. There is statutory authority that before a person can adopt, they must have their name run through the data base. Mr. Clark explained that substantiated means a worker must determine if the child has been abused, neglected, or is otherwise in danger. Standards are outlined in the policies and procedures of the division. Workers are trained to look for signs of failure to protect the child, medical neglect, lack of supervision, physical abuse or neglect, sexual abuse, drug addiction, emotional maltreatment, and other situations. He noted that physical abuse or battering does not include spanking.

    Sen. Peterson asked if there was an effective procedure in place that allows careful scrutiny prior to a situation being substantiated and a person's name being added to the data base.

    Ms. Williams said that a supervisor always reviews the case prior to closure. She stated that while the settlement agreement and the Utah Code allows them to substantiate based on the words of a child alone, that is not the only interview that is done in the course of the investigation. The worker is to interview collateral contacts, teachers, parents, and others involved in the child's life. There is also an interview with the doctor if there is an allegation of medical neglect or physical abuse. There are interviews done with law enforcement and the attorney general. The role of the supervisor is to read through all of the documentation and talk with the worker to provide the necessary checks and balances.

    Ms. Kathryn Cooney, Director of Policy Evaluation and Planning, stated that depending on the nature of the case, the alleged perpetrator may or may not be interviewed. Often it is at the request or the suggestion of law enforcement that they do not interview the alleged perpetrator. In every other case they will conduct an interview if the person is available.

    Mr. Clark pointed out that the information that goes into the data base is elicited to protect the child. There are some very serious issues that need to be dealt with by the Legislature in this area. The first issue is whether the data base should be maintained. It was his

opinion that it should. Second, should the data base be used for all the purposes for which it is now being used. He said there are some good reasons for using the data base. However, if it is continued to be used for those purposes, some protections should be added. He stated it is imperative to enact due process protections to protect the rights of the accused.

    Rep. Stephens indicated that until someone is convicted, the data base should not be used to deny them rights.

    Mr. Clark pointed out that there are in excess of 70,000 names in the data base - 65 percent of which are unsubstantiated or unable to locate referrals. The board is unable to address the problem of what can be done with the backlog of names. Solutions would be to notify the people that their names are on the data base and offer them a hearing, or to start over. A process should be enacted that will inform the accused in the substantiated cases in a timely manner.

     MOTION: Rep. Stephens moved to sunset Rule R501-15 and to request the department to prepare legislation for the upcoming session to address the issue. The legislation should address how to deal with the backlog of names.

    Rep. Harward pointed out that it had been previously suggested to have two data bases to avoid the problems raised. One would be a more comprehensive data base for the use of deciding where children in the state's custody are placed. Another data base would be used by the Division of Licensing in its process.

    The committee voted on the motion which passed unanimously.

    Ms. Gayle Webber, a private citizen, indicated her denial for a license was based on a complaint that was 12 years old and she was not made aware the complaint existed. She has requested but never received any information on how to get her name taken off the data base.

5.    Agency interpretation of "limited field of membership" as defined in Section 7-9- 3(5) (Rep. Harward) -Rep. Harward explained that when the credit union statute was created, it required credit unions to have a "limited field of membership." He reviewed the definition as outlined in statute. He felt the statute meant that credit unions are organizations that are limited to people that have something in common. He discussed the language found in Subsection (5)(b) which states "reside within an identifiable neighborhood, community, rural district, or county." The agency has interpreted the word "county" found in Subsection (5)(b) to mean "counties." He said the interpretation seems to be contrary to the intent of the Legislature.

    Mr. Ed Leary, Department of Financial Institutions, commented that the issue raised is the heart of a lawsuit that has been filed by the Utah Bankers Association. He said he would

answer the questions as thoroughly as possible without endangering the state's case in this matter. He described the dual chartering or banking system by which they operate. State limitations and state jurisdictions of financial institutions extends only to state-chartered banks. Some of the banks in the state are state chartered, some are federally chartered. The same is true for credit unions. If an institution chooses a national charter, they are not subject to the state's or Legislature's jurisdiction. Mr. Leary indicated the department has an obligation under statute to try and maintain a competitive equality between state-chartered institutions and their federal counterparts. Since 1983, the department has interpreted Subsection 7-9-3(5)(b) to mean that a credit union may in its bylaws submit to the department more than one neighborhood, community, rural area, or county, the residents of which are eligible for membership in the credit union.

    Rep. Harward asked if there is any purpose left in the concept of a limited field of membership if all of the terms within the statute in question are interpreted as plural.

    Mr. Bryce Pettey, Attorney General's Office, stated that that issue is the heart of the lawsuit and will be decided by the court.

    Mr. Leary stated the department has been reading county as counties for at least the last 15 years and felt it did not need to be reduced to an administrative rule. He believed the statutory requirement that a credit union submit its bylaws to a commissioner are clear. The credit union bylaws requirements are clear. The statute for interpreting statutes indicates the singular number includes the plural. Mr. Leary indicated that in 1990, the department received a legislative performance audit which criticized the department for its position on this very matter. The report suggested that the Legislature should look at the matter or at the very least pass legislation clarifying the questions. The department does not know what more an administrative rule can say that the statute does not. He said it is apparent that unless some kind of legislation occurs, the court will eventually decide the issue. Mr. Leary stated if regulatory burden is continued to be put on state banks, they will elect to go to a national jurisdiction.

    Rep. Stephens disclosed a potential conflict of interest because he works for a bank. He said he saw no reason for the definitions in the code if the terms are made plural. He personally felt there was a need for both credit unions and banks. However, when the lines are blurred and distinctions are not made for their different roles, it causes contention. He asked why the Legislature would grant tax exemptions for credit unions if they are allowed to do exactly the same things banks are doing.

    Mr. Leary stated that the Legislature made that decision and it should be reviewed by the Legislature. He said that he would dispute that credit unions and banks are operating on a similar basis.

    Sen. Dmitrich stated he had a potential conflict of interest because he was on the advisory board of a bank. He stated the committee may be premature in hearing the issue now since there is a possibility for federal legislation that will impact it.

    Sen. Stephenson indicated that he anticipated that whatever happens in court, the losing side will probably come back to ask the Legislature to change the statute to their advantage.

    Rep. Harward agreed with the department that there should be no administrative rule.

6.    Committee Business - The next meeting of the committee was scheduled for October 16 at 9:00 a.m. Another meeting was also scheduled for November 3 at 9:00 a.m.

    Chair Harward adjourned the meeting at 11:40 a.m.