Fourth Substitute S.B. 156

Representative David L. Gladwell proposes to substitute the following bill:

1 AMENDMENTS TO UTAH TECHNOLOGY
2 FINANCE CORPORATION
3 1999 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: L. Steven Poulton
6 AN ACT RELATING TO COMMUNITY AND ECONOMIC DEVELOPMENT;
7 RECODIFYING THE UTAH TECHNOLOGY FINANCE CORPORATION ACT;
8 ADDRESSING THE CORPORATION'S ADMINISTRATION OF THE CAPITAL ACCESS
9 FUND; PROVIDING LEGISLATIVE INTENT; PROVIDING DEFINITIONS; ADDRESSING
10 THE CREATION OF THE CORPORATION; ADDRESSING THE MEMBERSHIP OF THE
11 BOARD OF TRUSTEES; PROVIDING FOR OFFICERS AND EMPLOYEES; ADDRESSING
12 POWERS; ADDRESSING CHANGES IN ORGANIZATION; ADDRESSING DUTIES AND
13 LIMITATIONS; ADDRESSING ISSUANCE OF LOANS TO QUALIFIED BUSINESSES;
14 ADDRESSING CONFLICTS OF INTEREST; ADDRESSING CONFIDENTIALITY OF
15 INFORMATION; ADDRESSING LIABILITY OF THE STATE; ADDRESSING HOLDING OF
16 FUNDS BY STATE TREASURER; ADDRESSING ANNUAL REPORTS AND AUDITS;
17 PROVIDING EXEMPTIONS FROM CERTAIN STATUTES; ADDRESSING STANDING OF
18 ATTORNEY GENERAL TO SUE; AND MAKING TECHNICAL CHANGES.
19 This act affects sections of Utah Code Annotated 1953 as follows:
20 AMENDS:
21 9-2-1303, as last amended by Chapter 206, Laws of Utah 1993
22 9-2-1306, as last amended by Chapter 6, Laws of Utah 1996
23 9-2-1311, as last amended by Chapter 6, Laws of Utah 1996
24 11-37-101, as last amended by Chapter 200, Laws of Utah 1995
25 63-55-209, as last amended by Chapter 13, Laws of Utah 1998

26 63-95-102, as enacted by Chapter 152, Laws of Utah 1998
27 ENACTS:
28 9-13-101, Utah Code Annotated 1953
29 9-13-102, Utah Code Annotated 1953
30 9-13-103, Utah Code Annotated 1953
31 9-13-201, Utah Code Annotated 1953
32 9-13-202, Utah Code Annotated 1953
33 9-13-203, Utah Code Annotated 1953
34 9-13-204, Utah Code Annotated 1953
35 9-13-301, Utah Code Annotated 1953
36 9-13-302, Utah Code Annotated 1953
37 9-13-303, Utah Code Annotated 1953
38 9-13-304, Utah Code Annotated 1953
39 9-13-305, Utah Code Annotated 1953
40 9-13-401, Utah Code Annotated 1953
41 9-13-402, Utah Code Annotated 1953
42 9-13-403, Utah Code Annotated 1953
43 9-13-404, Utah Code Annotated 1953
44 9-13-405, Utah Code Annotated 1953
45 9-13-406, Utah Code Annotated 1953
46 REPEALS:
47 9-2-701, as renumbered and amended by Chapter 241, Laws of Utah 1992
48 9-2-702, as renumbered and amended by Chapter 241, Laws of Utah 1992
49 9-2-703, as renumbered and amended by Chapter 241, Laws of Utah 1992
50 9-2-704, as last amended by Chapter 243, Laws of Utah 1996
51 9-2-705, as renumbered and amended by Chapter 241, Laws of Utah 1992
52 9-2-706, as last amended by Chapter 10, Laws of Utah 1997
53 9-2-707, as last amended by Chapter 4, Laws of Utah 1993
54 Be it enacted by the Legislature of the state of Utah:
55 Section 1. Section 9-2-1303 is amended to read:
56 9-2-1303. Utah Capital Access Fund.

57 (1) (a) There is created within the office of the state treasurer the Utah Capital Access
58 Fund.
59 (b) The purpose of the fund created under Subsection (1)(a) shall be to encourage lending
60 institutions to make debt capital more readily available to small businesses in Utah of a size that
61 may be eligible for Small Business Administration loans under 13 C.F.R. Sec. 121.1.
62 (c) The fund shall consist of any money appropriated by the Legislature, fees and
63 premiums paid by participating lenders and borrowers, any other money from any other source,
64 public or private, and interest and income earned on these monies.
65 (2) The Utah Technology Finance Corporation created in [Part 7 of this chapter] Chapter
66 13 shall administer and supervise the fund in all aspects and shall market the availability of the
67 fund to lending institutions and to any business in Utah of a size that may be eligible for Small
68 Business Administration loans under 13 C.F.R. Sec. 121.1.
69 Section 2. Section 9-2-1306 is amended to read:
70 9-2-1306. Premiums -- Administrative costs -- Transfers.
71 (1) (a) When a participating lender makes a loan that qualifies it to be placed within a
72 special loan portfolio, the premium charges payable to the lender's fund reserve account by the
73 participating lender and the borrower shall be prescribed by the participating lender.
74 (b) The amount paid by the borrower may not be less than 0.5% of the principal amount
75 of the loan nor more than 6% of the principal amount of the loan.
76 (c) The amount paid by the participating lender shall be equal to the amount paid by the
77 borrower.
78 (d) This amount shall then be deposited into the lender's fund reserve account.
79 (e) (i) Except as provided in Subsection (ii), the participating lender may recover from the
80 borrower the cost of the participating lender's payment in any manner agreed to by the participating
81 lender and the borrower.
82 (ii) Notwithstanding Subsection (i), the total premium charge paid by the borrower to the
83 lender's fund reserve account may not exceed 6% of the principal amount of the loan.
84 (2) (a) [The Utah Technology Finance Corporation may use the interest earned on money
85 in the state fund reserve account for] To pay for costs incurred in administering the fund, the Utah
86 Technology Finance Corporation may use:
87 (i) money in the state fund reserve account; and

88 (ii) interest earned on the money in the state fund reserve account.
89 (b) Any interest remaining in the lender's fund reserve account shall remain in the account
90 until a claim is filed in accordance with Section 9-2-1308 or until it is withdrawn under Section
91 9-2-1310 .
92 (3) When enrolling a loan, the Utah Technology Finance Corporation shall request the
93 treasurer to transfer into the state fund reserve account an amount determined as follows:
94 (a) if the amount of any loan made by a participating lender, plus the amount of loans
95 previously enrolled by that participating lender, is less than $750,000, the Utah Technology
96 Finance Corporation shall request the state treasurer to deposit into the state fund reserve account
97 in each case an amount equal to:
98 (i) 250% of the combined amounts paid into the lender's fund reserve account in all areas
99 of the state except those designated as enterprise zones under Title 9, Chapter 2, Part 4; or
100 (ii) 300% of the combined amounts paid into the lender's fund reserve account in areas
101 designated as enterprise zones under Title 9, Chapter 2;
102 (b) if, before the enrollment of the loan, the amount of loans previously enrolled equals
103 or exceeds $750,000, the Utah Technology Finance Corporation shall request the state treasurer
104 to transfer into the state fund reserve account an amount equal to the amounts paid into the lender's
105 fund reserve account; and
106 (c) if the amount of loans previously enrolled by a participating lender is less than
107 $750,000 but the enrollment of a loan will cause the aggregate amount of all loans enrolled by that
108 participating lender to exceed $750,000, the Utah Technology Finance Corporation shall request
109 the state treasurer to transfer into the state fund reserve account an amount equal to a percentage
110 of the amount paid into the lender's fund reserve account, determined by:
111 (i) multiplying by 250% for loans in areas described in Subsection (3)(a)(i), and by 300%
112 for loans in areas described in Subsection (3)(a)(ii) that portion of the loan which when added to
113 the amount of all previously enrolled loans totals $750,000;
114 (ii) multiplying the balance of the loan by 100%; and
115 (iii) adding together the products of such computations and dividing the sum by the total
116 amount of the loan.
117 (4) In any three-year period, the Utah Technology Finance Corporation may not request
118 the treasurer to transfer more than $100,000 from the fund into any state fund reserve account for

119 any one borrower.
120 Section 3. Section 9-2-1311 is amended to read:
121 9-2-1311. Reports -- Audits.
122 (1) (a) The Utah Technology Finance Corporation shall report to the Legislature at least
123 quarterly on the activities of the fund.
124 (b) The report shall include:
125 (i) information on location of all borrowers and participating lenders;
126 (ii) the amount and type of financial assistance being requested; and
127 (iii) the type of project or product being financed.
128 (2) (a) The Utah Technology Finance Corporation shall provide monthly transaction
129 reports to each participating lender that identify:
130 (i) the balance in the lender's state fund reserve account;
131 (ii) payments and transfers into that account; and
132 (iii) withdrawals from that account.
133 (b) Participating lenders may review the records of the Utah Technology Finance
134 Corporation that account for payments and transfers into the account and withdrawals from the
135 account at the office of the Utah Technology Finance Corporation during normal business hours.
136 (3) (a) Each participating lender shall provide monthly transaction reports to the Utah
137 Technology Finance Corporation that identify:
138 (i) the balance in the lender's fund reserve account;
139 (ii) payments and transfers into the account; and
140 (iii) withdrawals from the account.
141 (b) Each participating lender shall allow the Utah Technology Finance Corporation to
142 review, during normal business hours, its records that account for:
143 (i) payments and transfers into the account;
144 (ii) withdrawals from the account; and
145 (iii) interest or income earned on the monies credited to the account.
146 (4) (a) The state auditor, or a certified public accountant appointed by the state auditor,
147 annually shall conduct and remit to the Legislature a program and financial audit of the fund [and,
148 in] conducted in conjunction with the audit of the Utah Technology Finance Corporation under
149 Section 9-13-404 .

150 (b) In the conduct of the audit, the auditor shall have access to all records of the fund at
151 any time, whether or not confidential.
152 [(b)] (c) Each audit required by this section shall include a determination of whether the
153 fund is likely to be able to continue to meet its obligations, including a report on the status of
154 outstanding loans and agreements made by the fund.
155 Section 4. Section 9-13-101 is enacted to read:
156 CHAPTER 13. UTAH TECHNOLOGY AND SMALL BUSINESS FINANCE ACT
157 Part 1. General Provisions
158 9-13-101. Title.
159 This chapter is known as the "Utah Technology and Small Business Finance Act."
160 Section 5. Section 9-13-102 is enacted to read:
161 9-13-102. Legislative findings.
162 (1) (a) The corporation is created with the primary purpose of supporting the development
163 of qualifying businesses with loans through a revolving loan fund which includes corporate
164 monies.
165 (b) The corporation is created for this purpose because the Legislature finds that:
166 (i) the growth of small businesses that develop qualifying products and services is
167 necessary to ensure:
168 (A) adequate employment for the state's citizens;
169 (B) growth and vitality of the state's economy; and
170 (C) diversity critical to the health and strength of the economy throughout the state; and
171 (ii) financial resources in this state are not adequate to support small businesses developing
172 qualifying products or services.
173 (2) (a) In addition to the primary purpose described in Subsection (1)(a) and from monies
174 other than corporate monies, the corporation may support the development of small businesses in
175 Utah through:
176 (i) helping small businesses obtain loans, grants, and other forms of assistance from private
177 and other public sources;
178 (ii) administering funds and programs on behalf of other public entities; and
179 (iii) qualifying for grants and loans from public and private entities to be used to provide
180 financing for small businesses.

181 (b) The corporation is permitted to engage in the activities described in Subsection (2)(a)
182 because the Legislature finds:
183 (i) (A) funds are available to help finance economic development loan programs;
184 (B) the state may not be eligible to receive the funds described in Subsection (2)(b)(i)(A);
185 and
186 (C) an organization such as an independent public corporation permits the state and its
187 citizens to receive the full benefit from the funds described in Subsection (2)(b)(i)(A); and
188 (ii) (A) many political subdivisions and other public entities qualify for funds for loan
189 programs, but lack the resources and expertise to administer a loan program in the most efficient
190 and cost-effective manner; and
191 (B) the entities described in Subsection (2)(b)(ii)(A) are aided by establishing an
192 independent public corporation that can assist with the administration of those loan programs.
193 (3) By creating the corporation as an independent public corporation:
194 (a) the Legislature intends that the state be protected from potential liability for claims
195 against the corporation; and
196 (b) the corporation can qualify for certain grants, loans, and other forms of assistance from
197 the federal government and other sources for which the state itself is not eligible.
198 Section 6. Section 9-13-103 is enacted to read:
199 9-13-103. Definitions.
200 As used in this chapter:
201 (1) "Board" means the board of trustees created by Section 9-13-202 .
202 (2) "Business partner" means a person that controls an entity in which a trustee, officer,
203 or employee of the corporation:
204 (a) holds a controlling interest; or
205 (b) serves as director, trustee, officer, or employee.
206 (3) (a) "Corporate monies" means any monies received or held by the corporation except:
207 (i) monies received from the federal government; or
208 (ii) monies received by the corporation for the purpose of the corporation administering
209 a publicly funded program on behalf of the agency providing the monies.
210 (b) "Corporate monies" include:
211 (i) monies appropriated to the corporation by the Legislature;

212 (ii) monies provided to the corporation by a state agency; and
213 (iii) any interest earned on the monies described in Subsections (3)(b)(i) and (ii).
214 (4) "Corporation" means the Utah Technology Finance Corporation created in Section
215 9-13-201 .
216 (5) "Proprietary information" means:
217 (a) a trade secret;
218 (b) commercial or financial information that if disclosed may result in an unfair
219 competitive injury to the person submitting the information to the corporation; and
220 (c) information supplied to the corporation if:
221 (i) the person supplying the information requests that it not be disclosed; and
222 (ii) the corporation reasonably determines that the disclosure is not in the public interest.
223 (6) "Qualifying business" means a person determined to be a qualifying business by the
224 corporation in accordance with Section 9-13-303 .
225 (7) "Qualifying product" means equipment, goods, software, or other tangible, intangible,
226 or intellectual property:
227 (a) (i) that increases effectiveness, efficiency, or durability; or
228 (ii) reduces costs; and
229 (b) (i) that is primarily designed to perform one or more of the following functions:
230 (A) computing;
231 (B) telecommunications or other transmission of information;
232 (C) aerospace or other aeronautical travel, exploration, or research; or
233 (D) pollution control or other environmental services; or
234 (ii) that primarily consists of:
235 (A) a medical product or treatment;
236 (B) a genetically engineered product; or
237 (C) a product using new materials or designs.
238 (8) "Qualifying services" means a service provided through a computer network including
239 the Internet.
240 (9) "Relative" or "relation" means a:
241 (a) direct ancestor or descendent;
242 (b) spouse;

243 (c) sibling; or
244 (d) a direct ancestor, descendent, or sibling of a spouse.
245 (10) (a) "State agency" means a department, commission, board, council, agency,
246 institution, officer, corporation, fund, division, office, committee, authority, laboratory, library,
247 unit, bureau, panel, or other administrative unit of the state.
248 (b) "State agency" does not include a county, city, town, or other political subdivision of
249 the state.
250 Section 7. Section 9-13-201 is enacted to read:
251 Part 2. Organization of Corporation
252 9-13-201. Utah Technology Finance Corporation -- Nonprofit corporation.
253 (1) There is created an independent public corporation known as the "Utah Technology
254 Finance Corporation."
255 (2) (a) The corporation shall operate as a nonprofit corporation in accordance with Title
256 16, Chapter 6, Utah Nonprofit Corporation and Cooperative Association Act, to the extent that
257 Title 16, Chapter 6, does not conflict with this chapter.
258 (b) The corporation shall file with the Division of Corporations and Commercial Code:
259 (i) articles of incorporation; and
260 (ii) any amendment to its articles of incorporation.
261 (c) In addition to the articles of incorporation, the corporation may adopt bylaws and
262 operational policies that are consistent with this chapter
263 (3) This chapter is a recodification of the repealed Title 9, Chapter 2, Part 7, Utah
264 Technology Finance Corporation Act and does not create a new corporation. The corporation
265 referred to in this chapter is the ongoing enterprise of the Utah Technology Finance Corporation
266 and this recodification does not impair any existing contractual relationships of the corporation.
267 Section 8. Section 9-13-202 is enacted to read:
268 9-13-202. Board of trustees.
269 (1) (a) The corporation shall be governed by a board of trustees consisting of the following
270 members:
271 (i) the executive director of the Department of Community and Economic Development
272 or the executive director's designee;
273 (ii) the commissioner of the Department of Financial Institutions or the commissioner's

274 designee; and
275 (iii) at least five but not more than nine trustees appointed by the governor with the
276 consent of the Senate.
277 (b) A trustee appointed under Subsection (1)(a)(iii) shall be appointed:
278 (i) for a staggered four-year term; and
279 (ii) from:
280 (A) representatives of the business, banking and finance, venture capital, engineering,
281 scientific, academic, legal, and accounting communities; and
282 (B) the general public.
283 (c) The chief executive officer of the corporation may not be a trustee.
284 (d) (i) If the executive director of the Department of Community and Economic
285 Development or the commissioner of the Department of Financial Institutions appoints a designee,
286 the executive director or the commissioner shall notify the corporation in writing of the
287 appointment of the designee prior to the designee serving on the board.
288 (ii) The term of a designee appointed in accordance with Subsection (1)(d)(i) terminates
289 when the designee:
290 (A) resigns;
291 (B) is unable to serve; or
292 (C) is replaced by the executive director or commissioner.
293 (2) (a) A trustee appointed under Subsection (1)(a)(iii) may be removed for cause, by the
294 board, by an affirmative vote of not less than two-thirds of all voting members of the board.
295 (b) A person appointed to replace a trustee appointed under Subsection (1)(a)(iii) who does
296 not serve a full term shall serve the remainder of the original term.
297 (c) A trustee appointed under Subsection (1)(a)(iii) shall serve until a successor is
298 appointed by the governor with the consent of the Senate unless the trustee:
299 (i) resigns;
300 (ii) resides outside the state;
301 (iii) is removed under Subsection (2)(a); or
302 (iv) is unable to serve on the board.
303 (3) Notwithstanding the requirement of Subsection (1), the governor shall, at the time of
304 appointment or reappointment of a trustee, adjust the length of terms to ensure that the terms of

305 board members are staggered so that approximately half of the board is appointed every two years.
306 (4) Unless the articles of incorporation or bylaws of the corporation or statute requires a
307 higher number of trustees:
308 (a) a majority of the board of trustees constitutes a quorum; and
309 (b) if a quorum is present when a vote is taken, the affirmative vote of a majority of
310 trustees present constitutes an action of the board.
311 (5) (a) (i) A trustee who is not a government employee shall receive no compensation or
312 benefits for serving as a trustee, but may receive per diem and expenses incurred in the
313 performance of the trustee's official duties at the rates established by the Division of Finance under
314 Sections 63A-3-106 and 63A-3-107 .
315 (ii) A trustee may decline to receive per diem and expenses.
316 (b) (i) A trustee who is employed by the state or any political subdivision of the state and
317 does not receive salary, per diem, or expenses for serving as a trustee may receive per diem and
318 expenses from the corporation at the rates established by the Division of Finance under Sections
319 63A-3-106 and 63A-3-107 .
320 (ii) A state government trustee may decline to receive per diem and expenses.
321 (c) (i) A higher education trustee who does not receive salary, per diem, or expenses from
322 the institution where the trustee is employed for service as a trustee may receive per diem and
323 expenses from the corporation at the rates established by the Division of Finance under Sections
324 63A-3-106 and 63A-3-107 .
325 (ii) A higher education trustee may decline to receive per diem and expenses.
326 Section 9. Section 9-13-203 is enacted to read:
327 9-13-203. Chief executive officer -- Officers and employees -- Independent legal
328 counsel.
329 The board shall:
330 (1) appoint a chief executive officer to administer the corporation under the direction of
331 the board;
332 (2) appoint other officers as necessary;
333 (3) employ necessary staff:
334 (a) within the limitations of the budget; and
335 (b) as the board determines necessary for the conduct of the business of the corporation;

336 (4) determine compensation and other benefits for each officer and employee of the
337 corporation;
338 (5) compensate officers and employees from:
339 (a) the funds of the corporation; or
340 (b) other resources available to the corporation; and
341 (6) hire and retain independent legal counsel.
342 Section 10. Section 9-13-204 is enacted to read:
343 9-13-204. Change in organizational structure -- Sell of all or substantially all of the
344 corporation's assets -- Terminate operations.
345 (1) Except funds held on behalf of another entity or subject to provisions of a grant or loan
346 requiring return of the funds if the corporation ceases to be a public entity, all funds, property, or
347 other assets of the corporation are public property and may not be disposed of except in
348 compliance with this chapter.
349 (2) (a) The corporation may not be privatized or take any of the actions described in
350 Subsection (2)(b) unless it complies with the process described in Section 63-95-104 .
351 (b) Subsection (2)(a) applies to the following actions:
352 (i) changing the corporation's status as an independent public corporation;
353 (ii) granting or conveying all or substantially all of the corporation's funds to any private
354 entity; or
355 (iii) selling, assigning, conveying, hypothecating, pledging, or otherwise transferring
356 control or ownership of all or substantially all of its assets, including all or substantially all of its
357 loan receivables, to any private entity.
358 (3) The Legislature may provide for the dissolution of the corporation and the return of any
359 monies or property to the state.
360 Section 11. Section 9-13-301 is enacted to read:
361 Part 3. Operations of the Corporation
362 9-13-301. Powers of the corporation.
363 Except as limited by this chapter, the Utah Constitution, or any state law applicable to an
364 independent or quasi-governmental entity, the corporation has all the rights, authorities, privileges,
365 and immunities of a nonprofit corporation including:
366 (1) providing from its funds direct loans to qualifying businesses in accordance with

367 Section 9-13-303 ;
368 (2) compromising claims and entering into work-out or settlement agreements with a
369 borrower, guarantor, or other person;
370 (3) writing-off all or any portion of a loan in default if the corporation determines that:
371 (a) the borrower is not able to repay all or any portion of the loan; or
372 (b) it is unlikely that collection of all or any portion of the loan can be economically
373 pursued;
374 (4) appointing or seeking appointment of a receiver or conservator of a borrower in
375 default;
376 (5) (a) applying for, soliciting, contracting for, and accepting loans, grants, and other types
377 of funding from federal, state, and other government entities; and
378 (b) lending the funds described in Subsection (5)(a) in compliance with the terms and
379 conditions of the program through or from which the funds are obtained;
380 (6) applying for, soliciting, contracting for, and agreeing to administer funds and provide
381 other services on behalf of and to federal, state, and other government entities;
382 (7) receiving:
383 (a) appropriations from the Legislature;
384 (b) other public monies; and
385 (c) contributions from private or public entities; and
386 (8) seeking federal and state tax exemptions.
387 Section 12. Section 9-13-302 is enacted to read:
388 9-13-302. Limitations.
389 (1) The corporation, either with corporate monies or monies from any other source, may
390 provide financial assistance only to a person that:
391 (a) is a small business as defined by the Untied States Small Business Administration; and
392 (b) has located within Utah:
393 (i) its primary place of business; and
394 (ii) its primary business operations.
395 (2) The corporation may not:
396 (a) acquire or hold a controlling interest in or exercise control over any other entity; or
397 (b) invest in or hold stock or any other equity interest in a person, except that the

398 corporation may acquire and hold stock or an equity interest if it is acquired in satisfaction of or
399 on account of a loan that is:
400 (i) contracted for by the corporation:
401 (A) in the course of the corporation's business; and
402 (B) before the stock or equity interest is acquired by the corporation; and
403 (ii) defaulted on before the stock or equity interest is acquired by the corporation.
404 Section 13. Section 9-13-303 is enacted to read:
405 9-13-303. Loans to qualified businesses.
406 (1) (a) Before extending to a person a loan funded in whole or in part by corporate monies,
407 the corporation shall determine whether or not that person is a qualified business under Subsection
408 (1)(b).
409 (b) To be a qualified business under this section, a person shall file an application with the
410 corporation that demonstrates to the satisfaction of the corporation that the person:
411 (i) is a small business as defined by the United States Small Business Administration;
412 (ii) is seeking financing to develop or market:
413 (A) a qualifying product or service; or
414 (B) an innovation of an existing qualifying product or service;
415 (iii) has located within Utah:
416 (A) its primary place of business; and
417 (B) its primary business operations; and
418 (iv) cannot obtain financing from a private source.
419 (c) For purposes of determining whether a person is a qualified business:
420 (i) the length of time the person has operated as a business is not determinative; and
421 (ii) a qualifying product or service can be innovative even if it is offered by more than one
422 person in the marketplace.
423 (2) In determining whether to extend a loan to a qualified business, the corporation shall
424 consider effects of the activities of the qualified business on the quality of the land, air, water, and
425 general environment of the state.
426 (3) The corporation shall collect all loans unless:
427 (a) the borrower is not able to repay all or any portion of the loan; or
428 (b) it is unlikely that collection of all or any portion of the loan can be economically

429 pursued;
430 (4) (a) If the corporation extends a loan to a qualified business, the corporation shall enter
431 into a written contract with the qualified business.
432 (b) The written contract required under Subsection (4)(a) shall contain the specific terms
433 and conditions of the loan, including a requirement that the qualified business give the corporation
434 regular reports on the financial condition of the qualified business.
435 Section 14. Section 9-13-304 is enacted to read:
436 9-13-304. Conflict of interests.
437 The corporation may not make a loan, otherwise assist, or contract to purchase goods or
438 services from, any of the following:
439 (1) a trustee, officer, or employee of the corporation, except for salary, benefits,
440 indemnities, and other forms of compensation pertaining to the individual's employment or service
441 for the corporation;
442 (2) an individual who is related to a trustee, officer, or employee of the corporation;
443 (3) an individual who is a business partner of a trustee, officer, or employee of the
444 corporation;
445 (4) an entity in which a trustee, officer, or employee of the corporation:
446 (a) serves as a trustee, director, officer, employee, or representative; or
447 (b) owns or beneficially controls:
448 (i) more than 5% of the voting stock of a corporation; or
449 (ii) if the entity is not a corporation, exercises an interest equivalent to Subsection (4)(b)(i);
450 (5) an entity in which a relative, business partner, or relative of a business partner of a
451 trustee, officer, or employee of the corporation:
452 (a) serves as a trustee, director, officer, employee, or representative; or
453 (b) owns or beneficially controls:
454 (i) more than 5% of the voting stock of a corporation; or
455 (ii) if the entity is not a corporation, exercises an interest equivalent to Subsection (5)(b)(i);
456 (6) a person that has made or has received an application to extend a loan to:
457 (a) a trustee, officer, or employee of the corporation; or
458 (b) a person described in Subsections (1) through (5); or
459 (7) a person where a conflict of interest may reasonably exist affecting any trustee, officer,

460 or employee of the corporation.
461 Section 15. Section 9-13-305 is enacted to read:
462 9-13-305. Confidentiality of information received by corporation -- Availability of
463 information.
464 (1) Proprietary information obtained by the corporation under this chapter from any person
465 applying for a loan or from a financial, governmental, educational, and other source is protected
466 and not available for public inspection except as provided in Subsection (2).
467 (2) The following records and information are open to the public:
468 (a) an annual report published by the corporation under this chapter;
469 (b) a record that:
470 (i) contains data on an individual; and
471 (ii) is classified as public under Title 63, Chapter 2, Government Records Access and
472 Management Act; and
473 (c) a record that:
474 (i) does not contain data on an individual or proprietary information; and
475 (ii) is open to the public under Title 63, Chapter 2, Government Records Access and
476 Management Act.
477 Section 16. Section 9-13-401 is enacted to read:
478 Part 4. Relationship to the State
479 9-13-401. Liability of state for claims against corporation -- Immunity of corporation.
480 (1) Notwithstanding whether a governmental entity or governmental employee could
481 otherwise be held liable under Title 63, Chapter 30, Utah Governmental Immunity Act, the
482 following are immune from suit based on, derived from, or otherwise pertaining to any contract,
483 act, omission, obligation, duty, or responsibility of, or any claim, judgment, or penalty against the
484 corporation or any of its trustees, officers, employees, representatives, or agents:
485 (a) a governmental entity, as defined in Subsection 63-30-2 (3), except the corporation; or
486 (b) a government employee, as defined in Subsection 63-30-2 (2), except the corporation.
487 (2) The corporation, its trustees, officers, employees, agents, and representatives are
488 immune from suit and shall be entitled to indemnification as provided in Title 63, Chapter 30, Utah
489 Governmental Immunity Act.
490 Section 17. Section 9-13-402 is enacted to read:

491 9-13-402. Monies held by state treasurer -- Limitation on use of state funds.
492 (1) Notwithstanding that the corporation is exempted from Title 51, Chapter 7, State
493 Money Management Act, the corporation shall submit to the custody of the state treasurer:
494 (a) all corporate monies; or
495 (b) other monies made available to the corporation from:
496 (i) any governmental agency; or
497 (ii) any person public or private.
498 (2) As necessary, the state treasurer may establish separate funds and accounts for the
499 monies submitted under Subsection (1).
500 (3) (a) The corporation shall use the monies described in Subsection (1) and all interest
501 earned on those funds in accordance with this chapter.
502 (b) Notwithstanding Subsection (3)(a), the corporation may use corporate monies only to:
503 (i) extend loans to qualified persons as provided in Section 9-13-303 ; and
504 (ii) to pay for:
505 (A) compensation and other benefits for officers and employees of the corporation;
506 (B) costs incurred by the board for per diem and expenses of trustees;
507 (C) debts of the corporation; and
508 (D) other corporation expenses.
509 Section 18. Section 9-13-403 is enacted to read:
510 9-13-403. Annual reports.
511 (1) Following the close of each fiscal year, the corporation shall submit an annual report
512 of its activities for the preceding year to the governor and the Legislature.
513 (2) A report required by Subsection (1) shall include:
514 (a) a complete operating report;
515 (b) a statement of loan delinquencies as of the end of the fiscal year; and
516 (c) a statement of net loan write-offs during the fiscal year.
517 Section 19. Section 9-13-404 is enacted to read:
518 9-13-404. Annual audit.
519 (1) The state auditor shall at least once in each year:
520 (a) audit the books and accounts of the corporation; or
521 (b) contract with a licensed independent certified public accountant to perform an audit

522 that shall be submitted for review to the state auditor within 90 calendar days after the end of the
523 fiscal year covered by the audit.
524 (2) The corporation shall reimburse the state auditor from available monies of the
525 corporation for the actual and necessary costs of the audit required by Subsection (1).
526 Section 20. Section 9-13-405 is enacted to read:
527 9-13-405. Exemptions from certain statutes.
528 The corporation is exempt from:
529 (1) Title 51, Chapter 5, Funds Consolidation Act;
530 (2) Title 51, Chapter 7, State Money Management Act;
531 (3) Title 63, Chapter 38, Budgetary Procedures Act;
532 (4) Title 63, Chapter 56, Utah Procurement Code;
533 (5) Title 63A, Department of Administrative Services; and
534 (6) Title 67, Chapter 19, Utah State Personnel Management Act.
535 Section 21. Section 9-13-406 is enacted to read:
536 9-13-406. Standing of attorney general to sue.
537 The attorney general has standing to sue the corporation and its trustees, officers, and
538 employees to enjoin any:
539 (1) violation of the Utah Constitution;
540 (2) any violation of any applicable law of this state or the United States; or
541 (3) breach of any duty or responsibility of a trustee, officer, or employee of the corporation.
542 Section 22. Section 11-37-101 is amended to read:
543 11-37-101. Definition -- Procurement -- Use of recycled goods.
544 (1) "Local government entity" means:
545 (a) municipalities, cities, and counties;
546 (b) entities created under Title 26A, Chapter 1, Local Health Department [Act]; and
547 (c) political subdivisions created by cities or counties, including entities created under:
548 (i) Title 11, Chapter 13, Interlocal Cooperation Act;
549 (ii) Title 9, Chapter 4, Part 9, Utah Housing Finance Agency Act; and
550 (iii) Title 9, Chapter [2, Part 7] 13, Utah Technology and Small Business Finance
551 [Corporation] Act.
552 (2) The procurement officer or other person responsible for purchasing supplies for each

553 local government entity shall:
554 (a) maintain for reference a copy of the current listing of recycled items available on state
555 contract as issued by the chief procurement officer under Section 63-56-9 ; and
556 (b) give recycled items consideration when inviting bids and purchasing supplies.
557 Section 23. Section 63-55-209 is amended to read:
558 63-55-209. Repeal dates, Title 9.
559 (1) Title 9, Chapter 1, Part 8, Commission on National and Community Service Act, is
560 repealed July 1, 1999.
561 (2) Title 9, Chapter 2, Part 3, Small Business Advisory Council, is repealed July 1, 1999.
562 (3) Title 9, Chapter 2, Part 4, Enterprise Zone Act, is repealed July 1, 2008.
563 (4) Title 9, Chapter [2, Part 7] 13, Utah Technology Finance [Corporation] and Small
564 Business Act, is repealed July 1, 2002.
565 (5) Section 9-2-1208 regarding waste tire recycling loans is repealed July 1, 2000.
566 (6) Title 9, Chapter 2, Part 16, Recycling Market Development Zone Act, is repealed July
567 1, 2000, Sections 59-7-608 and 59-10-108.7 are repealed for tax years beginning on or after
568 January 1, 2001.
569 (7) Title 9, Chapter 3, Part 3, Heber Valley Historic Railroad Authority, is repealed July
570 1, 1999.
571 (8) Title 9, Chapter 4, Part 4, Disaster Relief, is repealed July 1, 1999.
572 (9) Title 9, Chapter 4, Part 9, Utah Housing Finance Agency Act, is repealed July 1, 2006.
573 Section 24. Section 63-95-102 is amended to read:
574 63-95-102. Definitions.
575 For purposes of this chapter:
576 (1) "Asset" means property of all kind, real and personal, tangible and intangible, and
577 includes:
578 (a) cash, except reasonable compensation or salary for services rendered;
579 (b) stock or other investments;
580 (c) goodwill;
581 (d) real property;
582 (e) an ownership interest;
583 (f) a license;

584 (g) a cause of action; and
585 (h) any similar property.
586 (2) "Authorizing statutes" means the statutes creating an entity as a quasi-governmental
587 entity.
588 (3) "Business interest" means:
589 (a) holding the position of trustee, director, officer, or other similar position with a
590 business entity; or
591 (b) the ownership, either legally or equitably, of at least 10% of the outstanding shares of
592 a corporation or 10% interest in any other business entity, being held by:
593 (i) an individual;
594 (ii) the individual's spouse;
595 (iii) a minor child of the individual; or
596 (iv) any combination of [Subsection] Subsections (3)(b)(i) through (iii).
597 (4) "Interested party" means a person that held or holds the position of trustee, director,
598 officer, or other similar position with a quasi-governmental entity within:
599 (a) five years prior to the date of an action described in Subsection (6); or
600 (b) during the privatization of a quasi-governmental entity.
601 (5) "Lobbyist" is a person that provided or provides services as a lobbyist, as defined in
602 Section 36-11-102 , within:
603 (a) five years prior to the date of an action described in Subsection (6); or
604 (b) during the privatization of a quasi-governmental entity.
605 (6) (a) "Privatized" means an action described in Subsection (6)(b) taken under
606 circumstances in which the operations of the quasi-governmental entity are continued by a
607 successor entity that:
608 (i) is privately owned;
609 (ii) is unaffiliated to the state; and
610 (iii) receives any asset of the quasi-governmental entity.
611 (b) An action referred to in Subsection (6)(a) includes:
612 (i) the repeal of the authorizing statute of a quasi-governmental entity and the revision to
613 state laws to terminate the relationship between the state and the quasi-governmental entity;
614 (ii) the dissolution of the quasi-governmental entity;

615 (iii) the merger or consolidation of the quasi-governmental entity with another entity; or
616 (iv) the sale of all or substantially all of the assets of the quasi-governmental entity.
617 (7) "Quasi-governmental entity" means the:
618 (a) Dairy Commission created in Title 4, Chapter 22, Dairy Promotion Act;
619 (b) Utah Technology Finance Corporation created in Title 9, Chapter [2, Part 7] 13, Utah
620 Technology and Small Business Finance [Corporation] Act;
621 (c) Heber Valley Railroad Authority created in Title 9, Chapter 3, Part 3, Heber Valley
622 Historic Railroad Authority;
623 (d) Utah Science Center Authority created in Title 9, Chapter 3, Part 4, Utah Science
624 Center Authority;
625 (e) Utah Housing Finance Agency created in Title 9, Chapter 4, Part 9, Utah Housing
626 Finance Agency;
627 (f) Utah State Fair Corporation created in Title 9, Chapter 4, Part 11, Utah State Fair
628 Corporation Act;
629 (g) Workers' Compensation Fund of Utah created in Title 31A, Chapter 33, Workers'
630 Compensation Fund of Utah;
631 (h) Utah State Retirement Office created in Title 49, Chapter 1, Part 2, Retirement Office
632 and Board;
633 (i) School and Institutional Trust Lands Administration created in Title 53C, Chapter 1,
634 Part 2, School and Institutional Trust Lands Administration;
635 (j) Crime Victims' Reparations Office created in Title 63, Chapter 25a, Part 4, Crime
636 Victims' Reparations Act; and
637 (k) Utah Communications Agency Network created in Title 63C, Chapter 7, Utah
638 Communications Agency Network Act.
639 Section 25. Repealer.
640 This act repeals:
641 Section 9-2-701, Short title.
642 Section 9-2-702, Definitions.
643 Section 9-2-703, Declarations and purpose.
644 Section 9-2-704, Utah Technology Finance Corporation -- Nonprofit corporation --
645 Powers and duties -- Board of trustees -- Appointment of members by governor --

646 Rulemaking authority-- Employees -- Legal counsel -- Advisory board -- Expenses.
647 Section 9-2-705, Criteria governing operations -- Annual report -- Audits.
648 Section 9-2-706, Exemption from certain statutes.
649 Section 9-2-707, Confidentiality of information received by corporation -- Availability
650 of information.