First Substitute H.B. 444

Representative Gerry A. Adair proposes to substitute the following bill:

1 PRIVATIZATION OF QUASI -
2 GOVERNMENTAL ENTITIES
3 1998 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Gerry A. Adair
6 AN ACT RELATING TO STATE AFFAIRS; ADDRESSING PRIVATIZATION OF
7 QUASI-GOVERNMENTAL ENTITIES; PROHIBITING BENEFITS FROM
8 PRIVATIZATION TO CERTAIN PERSONS; AND PROVIDING PENALTIES.
9 This act affects sections of Utah Code Annotated 1953 as follows:
10 ENACTS:
11 63-95-101, Utah Code Annotated 1953
12 63-95-102, Utah Code Annotated 1953
13 63-95-103, Utah Code Annotated 1953
14 63-95-104, Utah Code Annotated 1953
15 63-95-105, Utah Code Annotated 1953
16 Be it enacted by the Legislature of the state of Utah:
17 Section 1. Section 63-95-101 is enacted to read:
18 CHAPTER 95. PRIVATIZATION OF QUASI-GOVERNMENTAL ENTITIES
19 Part 1. General Provisions
20 63-95-101. Title.
21 This chapter shall be known as the "Privatization of Quasi-Governmental Entities Act."
22 Section 2. Section 63-95-102 is enacted to read:
23 63-95-102. Definitions.
24 For purposes of this chapter:
25 (1) "Asset" means property of all kind, real and personal, tangible and intangible, and

1 includes:
2 (a) cash h , EXCEPT REASONABLE COMPENSATION OR SALARY FOR SERVICES
2a RENDERED h ;
3 (b) stock or other investments;
4 (c) goodwill;
5 (d) real property;
6 (e) an ownership interest;
7 (f) a license;
8 (g) a cause of action; and
9 (h) any similar property.
10 (2) "Authorizing statutes" means the statutes creating an entity as a quasi-governmental
11 entity.
12 (3) "Business interest" means:
13 (a) holding the position of trustee, director, officer, or other similar position with a
14 business entity; or
15 (b) the ownership, either legally or equitably, of at least 10% of the outstanding shares of
16 a corporation or 10% interest in any other business entity, being held by:
17 (i) an individual;
18 (ii) the individual's spouse;
19 (iii) a minor child of the individual; or
20 (iv) any combination of Subsection (3)(b)(i) through (iii).
21 (4) "Interested party" means a person that held or holds the position of trustee, director,
22 officer, or other similar position with a quasi-governmental entity within:
23 (a) five years prior to the date of an action described in Subsection (6); or
24 (b) during the privitization of a quasi-governmental entity.
25 (5) "Lobbyist" is a person that provided or provides services as a lobbyist, as defined in
26 Section 36-11-102 , within:
27 (a) five years prior to the date of an action described in Subsection (6); or
28 (b) during the privitization of a quasi-governmental entity.
29 (6) (a) "Privatized" means an action described in Subsection (6)(b) taken under
30 circumstances in which the operations of the quasi-governmental entity are continued by a
31 successor entity that:

lilac-February 24, 1998

- 2 -

1 (i) is privately owned;
2 (ii) is unaffiliated to the state; and
3 (iii) receives any asset of the quasi-governmental entity.
4 (b) An action referred to in Subsection (6)(a) includes:
5 (i) the repeal of the authorizing statute of a quasi-governmental entity and the revision to
6 state laws to terminate the relationship between the state and the quasi-governmental entity;
7 (ii) the dissolution of the quasi-governmental entity;
8 (iii) the merger or consolidation of the quasi-governmental entity with another entity; or
9 (iv) the sale of all or substantially all of the assets of the quasi-governmental entity.
10 (7) "Quasi-governmental entity" means the:
11 (a) Dairy Commission created in Title 4, Chapter 22, Dairy Promotion Act;
12 (b) Utah Technology Finance Corporation created in Title 9, Chapter 2, Part 7, Utah
13 Technology Finance Corporation Act;
14 (c) Heber Valley Railroad Authority created in Title 9, Chapter 3, Part 3, Heber Valley
15 Historic Railroad Authority;
16 (d) Utah Science Center Authority created in Title 9, Chapter 3, Part 4, Utah Science
17 Center Authority;
18 (e) Utah Housing Finance Agency created in Title 9, Chapter 4, Part 9, Utah Housing
19 Finance Agency;
20 (f) Utah State Fair Corporation created in Title 9, Chapter 4, Part 11, Utah State Fair
21 Corporation Act;
22 (g) Workers' Compensation Fund of Utah created in Title 31A, Chapter 33, Workers'
23 Compensation Fund of Utah;
24 (h) Utah State Retirement Office created in Title 49, Chapter 1, Part 2, Retirement Office
25 and Board;
26 (i) School and Institutional Trust Lands Administration created in Title 53C, Chapter 1,
27 Part 2, School and Institutional Trust Lands Administration;
28 (j) Crime Victims Reparations Office created in Title 63, Chapter 25a, Part 4, Crime
29 Victims' Reparations Act; and
30 (k) Utah Communications Agency Network created in Title 63C, Chapter 7, Utah
31 Communications Agency Network Act.

- 3 -

1 Section 3. Section 63-95-103 is enacted to read:
2 63-95-103. Benefits to interested parties of a quasi-governmental entity.
3 (1) If a quasi-governmental entity is privatized, the following may not receive any benefit
4 prohibited under Subsection (2):
5 (a) an interested party of the quasi-governmental entity;
6 (b) an entity in which an interested party holds a business interest;
7 (c) a lobbyist of the quasi-governmental entity; or
8 (d) an entity in which a lobbyist of the quasi-governmental entity holds a business interest.
9 (2) If a quasi-governmental entity is privatized:
10 (a) a person described in Subsection (1)(a) or (b) may not receive:
11 (i) compensation from a quasi-governmental entity that is conditioned in whole or in part
12 on:
13 (A) the passage, defeat, or amendment of legislative action related to privatization; or
14 (B) the approval, modification, or denial of an executive action related to privatization;
15 or
16 (ii) any asset of the quasi-governmental entity or its successor; and
17 (b) a person described in Subsection (1)(c) or (d) may not receive any:
18 (i) compensation that if received by the lobbyist would be in violation of Section
19 36-11-301 ; or
20 (ii) asset of the quasi-governmental entity or its successor.
21 Section 4. Section 63-95-104 is enacted to read:
22 63-95-104. Privatization process.
23 (1) If a quasi-governmental entity seeks to privatize the quasi-governmental entity, it shall h :
24 (a) h submit to the Legislature recommended legislation to S :(i) s repeal the authorizing statute and
24a revise state
25 law as necessary to terminate its relationship to the state h ; AND S (ii) ADDRESS THE VALUE OF ANY
25.1 INTERESTS THE STATE HOLDS IN THE QUASI-GOVERNMENTAL ENTITY AND WHETHER THE STATE
25.2 SHOULD RECEIVE COMPENSATION FOR THOSE INTERESTS AS PART OF PRIVATIZATION; AND s
25a (b) BE AUDITED BY THE STATE AUDITOR:
25b (i) WITHIN ONE YEAR PRIOR TO THE EFFECTIVE DATE OF LEGISLATION THAT REPEALS THE
25c AUTHORIZING STATUTE TO TERMINATE THE RELATIONSHIP BETWEEN THE QUASI-GOVERNMENTAL
25d ENTITY AND THE STATE; AND h

Text Box

Amend on 3_goldenrod March 3, 1998 - 4 -

lilac-February 24, 1998

25e h (ii) TO DETERMINE THE AMOUNT, NATURE, AND SOURCE h [ OR ] OF h REVENUES AND
25e1 ASSETS OF
25f THE QUASI-GOVERNMENTAL ENTITY h .
26 (2) The relationship between the state and a quasi-governmental entity may not be
27 terminated except by the repeal of the authorizing statute of the quasi-governmental entity.
28 Section 5. Section 63-95-105 is enacted to read:
29 63-95-105. Penalties for violation.
30 (1) A person who knowingly violates this chapter:
31 (a) is guilty of a third degree felony if the combined value of any compensation or assets


















- 4a -

lilac-March 3, 1998

lilac-February 24, 1998

1 received by the person as a result of the violation is equal to or greater than $10,000; or
2 (b) is guilty of a class A misdemeanor if the combined value of any compensation or assets
3 received by the person as a result of the violation is less than $10,000.
4 (2) (a) In addition to any penalty imposed under Subsection (1), a person that violates this
5 chapter shall return to the successor of the quasi-governmental entity any compensation or assets
6 received in violation of this chapter.
7 (b) If the assets received by the person in violation of this chapter are no longer in the
8 possession of the person, the person shall pay the successor of the quasi-governmental entity an
9 amount equal to the fair market value of the asset at the time the person received the asset.
10 (3) Notwithstanding Subsection 36-11-401 (3)(a), if a lobbyist violates Subsection
11 63-95-103 (2)(b)(i), the lobbyist is guilty the crime outlined in Subsection (1), which crime shall
12 be determined by the value of compensation or assets received by the lobbyist.

- 5 -