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H.B. 332





Sponsor: John W. Hickman

9    This act affects sections of Utah Code Annotated 1953 as follows:
10    AMENDS:
11         78-27-45, as last amended by Chapter 241, Laws of Utah 1989
12         78-27-46, as enacted by Chapter 143, Laws of Utah 1977
13         78-27-47, as enacted by Chapter 143, Laws of Utah 1977
14         78-27-48, as enacted by Chapter 143, Laws of Utah 1977
15         78-27-50, as last amended by Chapter 316, Laws of Utah 1994
16    ENACTS:
17         78-27-50.5, Utah Code Annotated 1953
18    Be it enacted by the Legislature of the state of Utah:
19        Section 1. Section 78-27-45 is amended to read:
20         78-27-45. Financial information privacy -- Written consent or court order for
21     disclosure by financial institution -- Exception.
22        (1) As used in Sections 78-27-45 through 78-27-50:
23        (a) "governmental entity" means:
24        (i) the state, including all departments, institutions, boards, divisions, bureaus, offices,
25    commissions, committees, and elected officials; and
26        (ii) any political subdivision of the state, including any county, city, town, school district,
27    public transit district, redevelopment agency, special improvement, or taxing district;

1        (b) "nonprotected record" means a record maintained by the financial institution to
2    facilitate the conduct of its business regarding a person or account, including:
3        (i) the existence of an account and the account number; and
4        (ii) the opening and closing dates of an account;
5        (c) "protected record" means a record not defined as a nonprotected record; and
6        (d) "record" means information that is:
7        (i) prepared, owned, received, or retained by a financial institution;
8        (ii) (A) inscribed on a tangible medium; or
9        (B) stored in an electronic or other medium; and
10        (iii) retrievable in perceivable form.
11        [(1) A person] (2) Except as provided in Section 78-27-50, an individual acting in behalf
12    of [the state, or any agency, office, department, bureau, or political subdivision of the state] a
13    governmental entity may not request or obtain by subpoena or otherwise information from a state
14    or federally chartered financial institution [regarding the financial transactions or other records]
15    that constitutes a record reflecting the financial condition of any person without first obtaining:
16        (a) written permission from the person [whose financial transactions or other records of
17    financial condition are] named or referenced within the record to be examined[,]; or [obtaining]
18        (b) an order from a court of competent jurisdiction permitting access to the [information]
19    record.
20        [(2)] (3) This section does not apply to:
21        (a) reviews made by the commissioner of financial institutions to determine whether a
22    financial institution is operating in accordance with law; or
23        (b) reports filed as required by Section 76-10-1906.
24        [(3) As used in this section, "person" includes an individual, corporation, partnership, or
25    association.]
26        Section 2. Section 78-27-46 is amended to read:
27         78-27-46. Financial information privacy -- Notice to person about whom information
28     sought.
29        (1) [In the event] (a) If a court order is obtained pursuant to Section 78-27-45, the
30    governmental entity that obtained the order shall give notice [thereof shall be given] to the person
31    about whom information is sought within three days of the day on which service of the order is

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1    made upon the financial institution, but no later than seven days before the day fixed in the order
2    as the day upon which the records are to be produced or examined.
3        (b) The notice required by Subsection (1)(a) shall be accompanied by:
4        (i) a copy of the order [which] that has been served upon the financial institution [and];
5        (ii) a copy of the motion or application upon which [it] the order is based; and [shall be
6    accompanied by]
7        (iii) a statement setting forth the rights of the person under Section 78-27-47.
8        (2) (a) The notice shall be sufficient if, on or before the third day after issuance of the
9    order, notice is:
10        (i) served in the manner provided in Rule 4(e), Utah Rules of Civil Procedure, upon the
11    person entitled to notice[,]; or [is]
12        (ii) mailed by certified or registered mail to the last-known address of the person. [In the
13    event the]
14        (b) Notwithstanding Subsection (2)(a), if the person entitled to notice is deceased or under
15    legal disability, notice shall be served upon or mailed to the last-known address of such person's
16    executor, administrator, guardian, or other fiduciary.
17        Section 3. Section 78-27-47 is amended to read:
18         78-27-47. Financial information privacy -- Intervention to challenge or stay order
19     -- Burden on governmental entity.
20        (1) Notwithstanding any other law or rule of law, any person who is entitled to notice of
21    a court order under Section 78-27-46 shall have the right to intervene in any proceeding with
22    respect to enforcement of the order to challenge the issuance of the order or to stay compliance
23    [therewith] with the order.
24        (2) Upon intervention, the burden shall be [upon] on the [state, agency, officer,
25    department, bureau or political subdivision] governmental entity obtaining the order to show that
26    there is reasonable cause for the issuance of the order [and that the information sought may further
27    the investigation].
28        Section 4. Section 78-27-48 is amended to read:
29         78-27-48. Financial information privacy -- Reimbursement of financial institution
30     for costs of obtaining information.
31        (1) Any financial institution [which produced] that produces records pursuant to

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1    permission [or], in compliance with an order obtained under [this act] Sections 78-27-45 through
2    78-27-50, or in compliance with an order of a court of competent jurisdiction shall be entitled to
3    reimbursement by the [party or parties] governmental entity seeking the information, for costs
4    reasonably and directly incurred in searching for, reproducing, or transporting books, papers,
5    records, or other data required to be produced.
6        (2) The commissioner of financial institutions shall by [regulation] rule establish the rates
7    and conditions under which reimbursement shall be made.
8        Section 5. Section 78-27-50 is amended to read:
9         78-27-50. Financial information privacy -- Inapplicable to certain official
10     investigations.
11        (1) [This chapter shall] Sections 78-27-45 through 78-27-50 do not apply [where] when
12    an examination of records is a part of an official investigation by [any]:
13        (a) a local police[,];
14        (b) a sheriff[,];
15        (c) a peace officer[,];
16        (d) a city attorney[,];
17        (e) a county attorney[,];
18        (f) a district attorney[,];
19        (g) the attorney general[,];
20        (h) the Department of Public Safety[,];
21        (i) the Office of Recovery Services of the Department of Human Services[,];
22        (j) the Insurance Department[, or];
23        (k) the Department of Commerce; or
24        (l) the state auditor.
25        [(2) Any financial institution or its agent or employee making a disclosure of financial
26    records pursuant to any court order, subpoena, administrative subpoena, or other legal process, is
27    not liable to the customer for disclosure.]
28        (2) If a governmental entity listed in Subsection (1) seeks a record, the entity shall obtain
29    the record as follows:
30        (a) if the record is a nonprotected record, by request in writing from a representative of the
31    governmental entity that is conducting the official investigation; or

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1        (b) if the record is a protected record, by obtaining a subpoena or other legal process:
2        (i) ordered by a court of competent jurisdiction; and
3        (ii) served upon the financial institution.
4        (3) A financial institution may not give notice to any person named or referenced within
5    the record disclosed pursuant to Subsection (1)(a).
6        (4) A protected record obtained under this section shall be subject to reimbursement from
7    the agency conducting the official investigation for costs reasonably incurred by the financial
8    institution in accordance with Section 78-27-48.
9        Section 6. Section 78-27-50.5 is enacted to read:
10         78-27-50.5. Liability of financial institutions.
11        A financial institution is not liable to any person named or referenced within a record for
12    any disclosure that is the result of a subpoena, order, or request made pursuant to Sections
13    78-27-45 through 78-27-50 if the financial institution reasonably believes that the subpoena, order,
14    or request is properly made under Sections 78-27-45 through 78-27-50.

Legislative Review Note
    as of 1-27-98 8:37 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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