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H.B. 351
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6 AN ACT RELATING TO STATE AFFAIRS; CREATING A NEW TITLE TO GOVERN THE
7 CREATION AND OPERATIONS OF INDEPENDENT PUBLIC CORPORATIONS AND
8 OVERSIGHT OF STATE AGENCIES; DEFINING TERMS; PROVIDING A PROCESS TO
9 CREATE INDEPENDENT PUBLIC CORPORATIONS; DESCRIBING THE POWERS AND
10 DUTIES OF INDEPENDENT PUBLIC CORPORATIONS; PROVIDING FOR
11 APPLICATION OF STATE OVERSIGHT STATUTE; PROVIDING AUDIT
12 REQUIREMENTS; ADDRESSING FUNDS HELD BY INDEPENDENT PUBLIC
13 CORPORATIONS; PROVIDING FOR TERMINATION OF STATUS AS INDEPENDENT
14 PUBLIC CORPORATION; DEFINING CONFLICT OF INTEREST; CREATING A
15 SUNRISE PROCESS; SUBJECTING STATE AGENCIES TO OVERSIGHT STATUTES
16 UNLESS EXEMPTED UNDER A SPECIFIED PROCESS; CREATING A TASK FORCE ON
17 THE OVERSIGHT OF GOVERNMENT ENTITIES; APPROPRIATING $34,500 FROM THE
18 GENERAL FUND; MAKING TECHNICAL CORRECTIONS; PROVIDING A REPEAL
19 DATE; AND PROVIDING A COORDINATION CLAUSE.
20 This act affects sections of Utah Code Annotated 1953 as follows:
21 ENACTS:
22 63D-1-101, Utah Code Annotated 1953
23 63D-1-102, Utah Code Annotated 1953
24 63D-1-201, Utah Code Annotated 1953
25 63D-1-202, Utah Code Annotated 1953
26 63D-1-203, Utah Code Annotated 1953
27 63D-1-204, Utah Code Annotated 1953
1 63D-1-205, Utah Code Annotated 1953
2 63D-1-206, Utah Code Annotated 1953
3 63D-1-207, Utah Code Annotated 1953
4 63D-1-208, Utah Code Annotated 1953
5 63D-2-101, Utah Code Annotated 1953
6 63D-2-102, Utah Code Annotated 1953
7 63D-2-103, Utah Code Annotated 1953
8 This act enacts uncodified material.
9 Be it enacted by the Legislature of the state of Utah:
10 Section 1. Section 63D-1-101 is enacted to read:
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14 63D-1-101. Title.
15 (1) This title shall be known as "Oversight of Government Entities."
16 (2) This chapter shall be known as the "Independent Public Corporation Act."
17 Section 2. Section 63D-1-102 is enacted to read:
18 63D-1-102. Definitions.
19 For purposes of this title:
20 (1) "Authorizing statutes" means the statutes creating an entity as an independent public
21 corporation;
22 (2) "Business interest" means:
23 (a) holding the position of trustee, director, officer, or other similar position with a
24 business entity; or
25 (b) the ownership, either legally or equitably, by an individual, the individual's spouse, or
26 the individual's minor children, of at least 10% of the outstanding shares of a corporation or 10%
27 interest in any other business entity.
28 (3) "Cause" includes inefficiency, neglect of duty, malfeasance, or misfeasance in office.
29 (4) "Legislative Management Committee" means the Legislative Management Committee
30 created in Section 36-12-6.
31 (5) "Oversight statutes" means:
1 (a) Title 51, Chapter 5, Funds Consolidation Act;
2 (b) Title 51, Chapter 7, State Money Management Act;
3 (c) Title 52, Chapter 4, Open and Public Meetings;
4 (d) Title 63, Chapter 38, Budgetary Procedures Act;
5 (e) Title 63, Chapter 46a, Administrative Rulemaking Act;
6 (f) Title 63, Chapter 46b, Utah Administrative Procedures Act;
7 (g) Title 63, Chapter 56, Utah Procurement Code;
8 (h) Title 63A, Administrative Services Code; and
9 (i) Title 67, Chapter 19, Utah Personnel Management Act.
10 (6) "Public funds" means monies, funds, and accounts received by an independent public
11 corporation from a public source.
12 (7) "Private sector" means a market in which the potential for profit exists.
13 (8) "Public source" means:
14 (a) the state;
15 (b) a state board, commission, institution, department, division, agency, bureau, laboratory,
16 or other similar instrumentality of the state; or
17 (c) a county, municipality, school district, special district, political subdivision, or other
18 public body.
19 (9) "State agency" means the:
20 (a) Department of Administrative Services;
21 (b) Department of Corrections;
22 (c) Department of Financial Institutions;
23 (d) Department of Alcoholic Beverage Control;
24 (e) Insurance Department;
25 (f) Public Service Commission;
26 (g) Department of Agriculture;
27 (h) Department of Human Services;
28 (i) State Board of Education;
29 (j) Department of Natural Resources;
30 (k) Department of Transportation;
31 (l) Department of Commerce;
1 (m) Department of Workforce Services;
2 (n) State Tax Commission;
3 (o) Department of Community and Economic Development;
4 (p) Department of Health;
5 (q) National Guard;
6 (r) Department of Environmental Quality;
7 (s) Department of Public Safety;
8 (t) Department of Human Resource Management; or
9 (u) any entity under the direct supervisory control of the:
10 (i) governor;
11 (ii) attorney general;
12 (iii) state treasurer;
13 (iv) state auditor; or
14 (v) an agency described in this Subsection (1).
15 (10) "State services" means services that are supported in whole or in part by state funds,
16 including:
17 (a) general services provided under Section 63A-2-103;
18 (b) use of state vehicles in accordance with Title 63A, Chapter 9, Division of Operations
19 and Administration of State Motor Vehicles;
20 (c) coverage by the risk management fund created under Section 63A-4-201;
21 (d) information technology services provided by the Division of Information Technology
22 Services, in accordance with Title 63A, Chapter 6, Division of Information Technology Services
23 and State Information Coordinator;
24 (e) archive services provided by the Division of Archives and Records in accordance with
25 Title 63, Chapter 2, Part 9, Archives and Records Service;
26 (f) state retirement benefits under Title 49, Utah State Retirement Act; or
27 (g) purchasing from state contracts.
28 Section 3. Section 63D-1-201 is enacted to read:
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30 63D-1-201. Creation -- Nature of independent public corporation -- Legislative
31 findings -- Board of trustees.
1 (1) An entity having the following characteristics is an independent public corporation
2 subject to the requirements of this chapter:
3 (a) the entity is created by the Legislature;
4 (b) the entity is not:
5 (i) part of the legislative or judicial branch;
6 (ii) a political subdivision of the state;
7 (iii) required to exist under the Utah Constitution; or
8 (iv) a state agency; and
9 (c) the entity is structured as a legal entity having the power to sue and be sued.
10 (2) (a) An independent public corporation is:
11 (i) a government entity governed by a board of trustees appointed in accordance with this
12 section; and
13 (ii) granted a corporate franchise to operate in this state to serve a specific public purpose.
14 (b) An independent public corporation is not a state agency.
15 (3) In the authorizing statutes of an independent public corporation, the Legislature shall
16 state:
17 (a) a public purpose served by the public corporation;
18 (b) (i) if the public corporation receives public funds, that the independent public
19 corporation operates in the private sector to promote a public purpose not being addressed by
20 private entities; or
21 (ii) if the public corporation does not receive public funds, that to meet a public purpose
22 the corporation needs affiliation with the state to gain exemption from federal or state income tax;
23 and
24 (c) that the board of trustees shall be appointed in accordance with Subsections (4) and (5).
25 (4) (a) The governor shall appoint the board of trustees of an independent public
26 corporation with the advice and consent of the Senate.
27 (b) A member of the board of trustees may be removed:
28 (i) by the governor only for cause;
29 (ii) by the board:
30 (A) only for cause; and
31 (B) by the affirmative vote of more than 75% of all voting members of the board.
1 (c) The members of the board of trustees shall elect a chair of the board and any other
2 officer that the board determines is necessary.
3 (d) The authorizing statutes of an independent public corporation shall state the number
4 of members of a board of trustees.
5 (5) The board of trustees are subject to fiduciary duties of a trustee under Section
6 75-7-302.
7 (6) Notwithstanding the provisions of this section, except for the requirements of Section
8 63D-1-207, the following entities are not subject to this chapter until July 1, 1999:
9 (a) Dairy Commission created in Title 4, Chapter 22, Dairy Promotion Act;
10 (b) Utah Technology Finance Corporation created in Title 9, Chapter 2, Part 7, Utah
11 Technology Finance Corporation Act;
12 (c) Heber Valley Railroad Authority created in Title 9, Chapter 3, Part 3, Heber Valley
13 Historic Railroad Authority;
14 (d) Utah Science Center Authority created in Title 9, Chapter 3, Part 4, Utah Science
15 Center Authority;
16 (e) Utah Housing Finance Agency created in Title 9, Chapter 4, Part 9, Utah Housing
17 Finance Agency;
18 (f) Utah State Fair Corporation created in Title 9, Chapter 4, Part 11, Utah State Fair
19 Corporation Act; or
20 (g) Workers' Compensation Fund of Utah created in Title 31A, Chapter 33, Workers'
21 Compensation Fund;
22 (h) Utah State Retirement Office created in Title 49, Chapter 1, Part 2, Retirement Office
23 and Board;
24 (i) School and Institutional Trust Lands Administration created in Title 53C, Chapter 1,
25 Part 2, School and Institutional Trust Lands Administration; and
26 (j) Crime Victims Reparations Office created in Title 63, Chapter 25a, Part 4, Crime
27 Victims' Reparations Act.
28 Section 4. Section 63D-1-202 is enacted to read:
29 63D-1-202. Powers and duties.
30 (1) An independent public corporation has the powers and duties of a nonprofit corporation
31 established under Title 16, Chapter 6, Utah Nonprofit Corporation and Co-Operative Association
1 Act, to the extent that the powers and duties do not conflict with:
2 (a) this title; or
3 (b) the authorizing statutes of the corporation.
4 (2) An independent public corporation may:
5 (a) hire and retain legal counsel independent of the attorney general; and
6 (b) create, cause to be created, or have a controlling interest in a subsidiary, except a
7 subsidiary shall be subject to the requirements of this title to the same extent as the independent
8 public corporation.
9 (3) An independent public corporation may not participate in state services unless
10 expressly permitted by statute.
11 Section 5. Section 63D-1-203 is enacted to read:
12 63D-1-203. Compliance with state laws applicable to state agencies -- Exemptions.
13 An independent public corporation is exempt from all oversight statutes.
14 Section 6. Section 63D-1-204 is enacted to read:
15 63D-1-204. Annual audit requirements -- Legislative audits.
16 (1) An independent public corporation shall obtain an annual audit:
17 (a) prepared by a nationally recognized accounting firm; and
18 (b) conducted in accordance with government auditing standards.
19 (2) The independent public corporation shall distribute the annual audit required under
20 Subsection (1) within 30 days of completion to the:
21 (a) state auditor;
22 (b) Division of Finance;
23 (c) Office of Legislative Research and General Counsel; and
24 (d) legislative fiscal analyst.
25 (3) An independent public corporation is subject to audit by the legislative auditor general
26 pursuant to Section 36-12-15.
27 Section 7. Section 63D-1-205 is enacted to read:
28 63D-1-205. Funds of independent public corporation.
29 Monies held by an independent public corporation may not be required to be maintained
30 in the custody of the state treasurer.
31 Section 8. Section 63D-1-206 is enacted to read:
1 63D-1-206. Conflicts of interest.
2 A board member of an independent public corporation may not have a business interest in
3 any entity doing business with the independent public corporation.
4 Section 9. Section 63D-1-207 is enacted to read:
5 63D-1-207. Termination of independent public corporation status.
6 (1) An independent public corporation's status as an independent public corporation may
7 not be terminated except as provided in Subsection (3).
8 (2) (a) Any of the following may file with the Legislative Management Committee a
9 request for termination of an independent public corporation's status as an independent public
10 corporation:
11 (i) a legislator;
12 (ii) a legislative committee;
13 (iii) the governor; or
14 (iv) the independent public corporation.
15 (b) The Legislative Management Committee shall assign an interim or standing committee
16 to review a request for termination filed under Subsection (2)(a) and make a recommendation to
17 the Legislature concerning:
18 (i) whether the independent public corporation status should be terminated; and
19 (ii) if the assigned committee determines that the independent public corporation status
20 should be terminated, whether the assigned committee recommends:
21 (A) dissolution;
22 (B) sale;
23 (C) merger;
24 (D) state absorption; or
25 (E) any other disposition of the independent public corporation as seems reasonable or in
26 the best business or financial interests of the state or the independent public corporation.
27 (c) As part of the review of a request for termination by the assigned committee:
28 (i) the independent public corporation shall provide the assigned committee, in a form
29 approved by the assigned committee, an accounting of:
30 (A) all assets held or controlled by the independent public corporation; and
31 (B) all liabilities of the independent public corporation;
1 (ii) the assigned committee may request any additional information from the independent
2 public corporation that the assigned committee considers necessary; and
3 (iii) the assigned committee shall consider the recommendations of the:
4 (A) state treasurer; and
5 (B) governor's Office of Planning and Budget.
6 (3) The Legislature may:
7 (a) repeal the authorizing statutes of the independent public corporation; and
8 (b) through a joint resolution provide for the disposition of the independent public
9 corporation including any action provided for in Subsections (2)(b)(i)(A) through (E).
10 Section 10. Section 63D-1-208 is enacted to read:
11 63D-1-208. Sunrise process.
12 (1) Any of the following may propose the creation of an independent public corporation
13 by submitting to the Legislative Management Committee a proposal for creation:
14 (a) a legislator;
15 (b) a legislative committee;
16 (c) the governor; or
17 (d) an executive branch agency.
18 (2) (a) The Legislative Management Committee shall assign a legislative interim or
19 standing committee to review a proposal to create an independent public corporation submitted
20 under Subsection (1).
21 (b) After reviewing the proposal to create an independent public corporation, the assigned
22 committee shall make a recommendation on creation and provide the recommendation to the
23 person who requested the review.
24 (3) If the assigned committee recommends the creation of an independent public
25 corporation, the assigned committee shall include in its recommendation a detailed structure for
26 the independent public corporation.
27 Section 11. Section 63D-2-101 is enacted to read:
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29 63D-2-101. Title.
30 This chapter shall be known as the "State Oversight of Government Entities."
31 Section 12. Section 63D-2-102 is enacted to read:
1 63D-2-102. Application of chapter.
2 Beginning July 1, 1998, an agency is subject to all state oversight statutes unless the
3 agency is expressly exempted in statute in accordance with this chapter.
4 Section 13. Section 63D-2-103 is enacted to read:
5 63D-2-103. Exemption from oversight statutes.
6 (1) An agency may seek exemption from an oversight statute by filing an application for
7 exemption with the Legislative Management Committee.
8 (2) The Legislative Management Committee shall assign an interim or standing committee
9 to review the application and make its recommendation to the Legislature.
10 (3) An agency's exemption from an oversight statute begins after:
11 (a) the assigned committee's review; and
12 (b) the Legislature's express exemption of the entity from the oversight statute.
13 Section 14. Oversight of Governmental Agencies Task Force -- Creation --
14 Membership -- Quorum -- Compensation -- Staff.
15 (1) There is created the Oversight of Governmental Agencies Task Force consisting of the
16 following eight members:
17 (a) three members of the Senate appointed by the president of the Senate, no more than
18 two of whom may be from the same political party; and
19 (b) five members of the House of Representatives appointed by the speaker of the House
20 of Representatives, no more than three of whom may be from the same political party.
21 (2) (a) The president of the Senate shall designate a member of the Senate appointed under
22 Subsection (1)(a) as a cochair of the task force.
23 (b) The speaker of the House of Representatives shall designate a member of the House
24 of Representatives appointed under Subsection (1)(b) as a cochair of the task force.
25 (3) In conducting its business, the task force shall comply with the rules of legislative
26 interim committees.
27 (4) The task force is authorized to meet until November 30, 1998.
28 (5) Salaries and expenses of the members of the task force who are legislators shall be paid
29 in accordance with Section 36-2-2 and Legislative Joint Rule 15.03.
30 (6) The Office of Legislative Research and General Counsel shall provide staff support
31 to the task force.
1 (7) The task force shall:
2 (a) review Title 63D, Oversight of Governmental Entities;
3 (b) make a recommendation for each entity listed in Subsection (9) as to whether the entity
4 should:
5 (i) have the entity's authorizing states repealed and the relationship to the state terminated
6 in accordance with Section 63D-1-207;
7 (ii) be restructured as an executive branch entity; or
8 (iii) have the entity's authorizing states amended to bring into conformance with Title 63D,
9 Chapter 1, Independent Public Corporation Act; and
10 (c) recommend legislation to:
11 (i) if necessary, refine Title 63D, Oversight of Governmental Entities;
12 (ii) implement the recommendations made under Subsection (1)(b); and
13 (iii) make any changes to the Utah Code that are necessary to implement Title 63D.
14 (8) The task force shall prepare a final report including the proposed legislation required
15 under Subsection (1) to be presented to the Business, Labor, and Economic Development Interim
16 Committee by no later than the interim committee's 1998 November interim meeting.
17 (9) Entities subject to review by the task force include:
18 (a) the Dairy Commission created in Title 4, Chapter 22, Dairy Promotion Act;
19 (b) the Utah Technology Finance Corporation created in Title 9, Chapter 2, Part 7, Utah
20 Technology Finance Corporation Act;
21 (c) the Heber Valley Railroad Authority created in Title 9, Chapter 3, Part 3, Heber Valley
22 Historic Railroad Authority;
23 (d) the Utah Science Center Authority created in Title 9, Chapter 3, Part 4, Utah Science
24 Center Authority;
25 (e) the Utah Housing Finance Agency created in Title 9, Chapter 4, Part 9, Utah Housing
26 Finance Agency;
27 (f) the Utah State Fair Corporation created in Title 9, Chapter 4, Part 11, Utah State Fair
28 Corporation Act;
29 (g) the Workers' Compensation Fund of Utah created in Title 31A, Chapter 33, Workers'
30 Compensation Fund;
31 (h) the Utah State Retirement Office created in Title 49, Chapter 1, Part 2, Retirement
1 Office and Board;
2 (i) the School and Institutional Trust Lands Administration created in Title 53C, Chapter
3 1, Part 2, School and Institutional Trust Lands Administration;
4 (j) the Crime Victims Reparations Office created in Title 63, Chapter 25a, Part 4, Crime
5 Victims' Reparations Act; and
6 (k) any other non-legislative or non-judicial branch entity that the task force determines
7 has the characteristics of an independent public corporation, as defined in Section 63D-1-201.
8 Section 15. Appropriation.
9 There is appropriated from the General Fund for fiscal year 1996-1997:
10 (1) $3,500 to the Senate to pay for the compensation and expenses of senators on the
11 committees created by this act;
12 (2) $6,000 to the House of Representatives to pay for the compensation and expenses of
13 representatives on the committees created in this act; and
14 (3) $25,000 to the Office of Legislative Research and General Counsel to pay for staffing
15 the committees created in this act.
16 Section 16. Repeal date.
17 Section 14 of this act is repealed November 30, 1998.
18 Section 17. Coordination clause.
19 (1) If this bill and H.B. 175, Workers' Compensation Fund of Utah, both pass, it is the
20 intent of the Legislature that Section 14 in this act be amended to include the following language:
21 "(10) By no later than the 1997 November interim meetings of the Legislature, the task force shall
22 receive a report from the Blue Ribbon Commission on the Workers' Compensation Fund of Utah
23 on whether the structure and operations of the Workers' Compensation Fund of Utah as a
24 quasi-public corporation should be modified."
25 (2) If this bill and H.B. 187, State and Local Public Safety 800 Megahertz Project, both
26 pass, the following subsections of this act shall be amended to include the Utah Communications
27 Agency Network:
28 (a) Section 14, Subsection (9); and
29 (b) Subsection 63D-1-201(6).
30 (3) If this bill and H.B. 321, Labor Commission and Workforce Services Amendments,
31 both pass, the following subsections of this act shall be amended to include the Labor
1 Commission:
2 (a) Section 14, Subsection (9); and
3 (b) Subsection 63D-1-201(6).
Legislative Review Note
as of 2-14-97 9:04 AM
A limited legal review of this bill raises no obvious constitutional or statutory concerns.
Office of Legislative Research and General Counsel
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