Download Zipped Introduced WP 9 HB0162S14.ZIP
[Status][Bill Documents][Fiscal Note][Bills Directory]

Fourteenth Substitute H.B. 162

Senator Dan R. Eastman proposes the following substitute bill:


             1     
AMENDMENTS RELATED TO FINANCIAL

             2     
INSTITUTIONS

             3     
2003 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Jeff Alexander

             6      This act modifies the Financial Institutions title to address provisions related to credit
             7      unions and mutual associations and to make technical changes. The act addresses
             8      nonexempt credit unions establishing branches. This act addresses voting requirements
             9      for mutual associations. This act modifies definitions. The act addresses loan limitations.
             10      The act addresses credit union service organizations. The act addresses mergers
             11      involving credit unions. The act addresses operations of out-of-state credit unions. The
             12      act addresses provisions related to fields of membership and grandfathering. This act
             13      provides for credit unions becoming nonexempt credit unions. This act provides for a
             14      competitive equity assessment and penalties for failure to pay the competitive equity
             15      assessment. This act modifies provisions related to state corporate franchise and income
             16      taxes to address the taxation of nonexempt credit unions. This act establishes a two-year
             17      legislative task force to study issues related to credit unions and other financial
             18      institutions. The act establishes task force membership, duties, and salaries and
             19      designates staff for the task force. The act requires the task force to prepare a report.
             20      The act makes a one-time appropriation of $44,500 from the General Fund for fiscal year
             21      2002-2003 to pay for task force expenses. The act makes a one-time appropriation of
             22      $44,500 from the General Fund for fiscal year 2003-04 to pay for task force expenses.
             23      This act provides intent language. This act provides different effective dates for different
             24      provisions of the act. The act provides a repeal date for the task force.
             25      This act affects sections of Utah Code Annotated 1953 as follows:


             26      AMENDS:
             27          7-1-708, as last amended by Chapter 49, Laws of Utah 1995
             28          7-7-10, as last amended by Chapter 244, Laws of Utah 1985
             29          7-9-3, as last amended by Chapter 329, Laws of Utah 1999
             30          7-9-5, as last amended by Chapter 116, Laws of Utah 2001
             31          7-9-6, as last amended by Chapter 329, Laws of Utah 1999
             32          7-9-11, as last amended by Chapter 329, Laws of Utah 1999
             33          7-9-12, as last amended by Chapter 329, Laws of Utah 1999
             34          7-9-16, as last amended by Chapter 329, Laws of Utah 1999
             35          7-9-20, as last amended by Chapter 329, Laws of Utah 1999
             36          7-9-26, as last amended by Chapter 182, Laws of Utah 1996
             37          7-9-34, as last amended by Chapter 178, Laws of Utah 1994
             38          7-9-37, as last amended by Chapter 329, Laws of Utah 1999
             39          7-9-39, as last amended by Chapter 329, Laws of Utah 1999
             40          7-9-39.5, as enacted by Chapter 329, Laws of Utah 1999
             41          7-9-46, as last amended by Chapter 49, Laws of Utah 1995
             42          7-9-51, as enacted by Chapter 329, Laws of Utah 1999
             43          7-9-52, as enacted by Chapter 329, Laws of Utah 1999
             44          7-9-53, as enacted by Chapter 329, Laws of Utah 1999
             45          59-1-403, as last amended by Chapters 52 and 175, Laws of Utah 2002
             46          59-7-101, as last amended by Chapter 76, Laws of Utah 2002
             47          59-7-102, as last amended by Chapters 76 and 286, Laws of Utah 2002
             48      ENACTS:
             49          7-9-55, Utah Code Annotated 1953
             50          7-9-56, Utah Code Annotated 1953
             51          7-9-57, Utah Code Annotated 1953
             52          7-9-58, Utah Code Annotated 1953
             53      REPEALS:
             54          7-9-54, as enacted by Chapter 329, Laws of Utah 1999
             55      This act enacts uncodified material.
             56      Be it enacted by the Legislature of the state of Utah:


             57          Section 1. Section 7-1-708 is amended to read:
             58           7-1-708. Establishing branches and relocating offices -- Application and
             59      procedure for approval -- Nonexempt credit unions.
             60          (1) A Utah depository institution or an out-of-state depository institution with a Utah
             61      branch or seeking to acquire a branch in this state may establish one or more branches, or
             62      relocate a branch office or its main office in this state, subject to the prior approval of the
             63      commissioner.    
             64          (2) [Approval] The approval of the commissioner required by Subsection (1) may be
             65      obtained by:
             66          (a) filing an application with the department in a form the commissioner prescribes;
             67      and
             68          (b) supplementing the application with information the commissioner considers
             69      material to determining whether to approve the application.
             70          (3) (a) The commissioner shall approve or disapprove [the] an application within 30
             71      days after accepting [it] the application as complete.
             72          (b) If the commissioner does not approve or disapprove an application within [this] the
             73      time[, it] stated in Subsection (3)(a), the application is considered approved.
             74          (4) (a) The commissioner shall cause a supervisor to make an investigation of the facts
             75      relevant or material to [the] an application.
             76          (b) The supervisor that conducts the investigation required by Subsection (4)(a) shall
             77      submit written findings and recommendations to the commissioner.
             78          (5) [The] An application, any supplemental information furnished by the applicant, and
             79      the findings and recommendations of the supervisor may be inspected by any person at the
             80      department's office, except those portions of the application the commissioner declares to be
             81      confidential to prevent a clearly unwarranted invasion of privacy, pursuant to the applicant's
             82      request.
             83          (6) To protect the safety and soundness of the applicant, the commissioner may:
             84          (a) approve an application subject to the terms and conditions the commissioner
             85      considers necessary; or
             86          (b) disapprove an application.
             87          (7) (a) The commissioner's approval of any application under this section is considered


             88      revoked, unless the office is opened and operating within one year of the date approved by the
             89      commissioner for commencement of operations.
             90          (b) The commissioner may[, upon written application made before the expiration of
             91      that period and for good cause shown,] extend the date for activation for up to two additional
             92      periods of not more than six months each[.]:
             93          (i) upon written application made before the expiration of a period; and
             94          (ii) for good cause shown.
             95          (8) An out-of-state depository institution with a branch in Utah is not subject to the
             96      requirements of this section if the office or branch to be established or relocated is located
             97      outside of Utah.
             98          (9) (a) For purposes of determining whether a nonexempt credit union may establish a
             99      branch, a nonexempt credit union is considered to be establishing a branch if the nonexempt
             100      credit union establishes:
             101          (i) notwithstanding Section 7-1-103 , a loan production office; or
             102          (ii) any other office or facility that:
             103          (A) is owned or operated by:
             104          (I) the nonexempt credit union; or
             105          (II) a credit union service organization in which the nonexempt credit union holds an
             106      ownership interest;
             107          (B) is open to the public; and
             108          (C) provides any product or service of the nonexempt credit union to a member of the
             109      nonexempt credit union.
             110          (b) This section may not be interpreted as authorizing a loan production office to
             111      engage in any activity that a loan production office is not authorized to engage in under Section
             112      7-1-715 .
             113          Section 2. Section 7-7-10 is amended to read:
             114           7-7-10. Meetings of mutual association members -- Voting -- Notice.
             115          (1) (a) An annual meeting of the members of each mutual association shall be held at
             116      the time and place fixed in the bylaws of the association.
             117          (b) Special meetings may be called as provided in the bylaws.
             118          (2) (a) The members entitled to vote at any meeting of the members shall be those who


             119      are members of record at the end of the calendar month next preceding the date of the meeting
             120      of members, except those who have ceased to be members.
             121          (b) The number of votes [which members shall be] that a member is entitled to cast
             122      shall be determined in accordance with the books on the date determinative of entitlement to
             123      vote.
             124          (3) In the determination of all questions requiring action by the members, each member
             125      shall be entitled to cast:
             126          (a) one vote[, plus an additional vote for each $100 or fraction thereof of the
             127      withdrawal value of savings accounts, if any, held by the member. No member, however, may
             128      cast more than 50 votes.]; and
             129          (b) any additional vote that the member may cast under the bylaws of the association.
             130          (4) [At] (a) (i) Subject to Subsection (4)(a)(ii), at any meeting of the members, voting
             131      may be:
             132          (A) in person; or
             133          (B) by proxy[, but no].
             134          (ii) Notwithstanding Subsection (4)(a)(i), a proxy [shall be] is not eligible to be voted
             135      at any meeting unless the proxy has been filed with the secretary of the association, for
             136      verification, at least five days before the date of the meeting.
             137          (b) Every proxy shall:
             138          (i) be in writing [and];
             139          (ii) be signed by the member or [his] the member's duly authorized attorney in fact
             140      [and, when filed with the secretary, shall, if so specified in the proxy,]; and
             141          (iii) continue in force from year to year:
             142          (A) when filed with the secretary;
             143          (B) if so specified in the proxy; and
             144          (C) until:
             145          (I) revoked by a writing duly delivered to the secretary; or [until]
             146          (II) superseded by subsequent proxies.
             147          (5) (a) At an annual meeting or at any special meeting of the members, any number of
             148      members present in person or by proxy eligible to be voted constitutes a quorum.
             149          (b) A majority of all votes cast at any meeting of members shall determine any


             150      question unless this chapter specifically provides otherwise.
             151          (6) (a) No notice of annual meetings of members need be given to members. [Notice]
             152          (b) Subject to Subsection (6)(c), notice of each special meeting of members shall:
             153          (i) state:
             154          (A) the purpose for which the meeting is called[,];
             155          (B) the place of the meeting[,]; and
             156          (C) the time when [it] the meeting shall convene[,]; and [shall]
             157          (ii) (A) be published:
             158          (I) once a week for two consecutive calendar weeks (in each instance, on any day of the
             159      week) before the date on which the special meeting shall convene[,]; and
             160          (II) in a newspaper of general circulation in the county in which the home office of the
             161      association is located[. In addition to publication of the notice, a copy of the notice shall]; and
             162          (B) be posted in a conspicuous place in all offices of the association during the 30 days
             163      immediately preceding the date on which the special meeting convenes[; provided, however,
             164      that].
             165          (c) No notice need be given of a meeting if all the members entitled to vote, vote in
             166      favor of an action at [any] the meeting of the members[, no notice need be given].
             167          Section 3. Section 7-9-3 is amended to read:
             168           7-9-3. Definitions.
             169          As used in this chapter:
             170          (1) (a) "Association" means a group of persons that:
             171          [(a) has a similar:]
             172          [(i) interest;]
             173          (i) constitute the members of a formal association organized for:
             174          (A) an identifiable interest;
             175          (B) an identifiable purpose;
             176          [(ii)] (C) a specific profession; or
             177          [(iii)] (D) a specific occupation; or
             178          [(iv) formal association with an identifiable purpose; or]
             179          [(b) is] (ii) are employed by a common employer.
             180          (b) "Association" does not include a group of persons that is:


             181          (i) identified or created primarily on the basis of a relationship between any person
             182      and:
             183          (A) a consumer;
             184          (B) a customer; or
             185          (C) a client; or
             186          (ii) created primarily for the purpose of expanding the membership in a credit union.
             187          (2) "Capital and surplus" means:
             188          (a) shares;
             189          (b) deposits;
             190          (c) reserves; and
             191          (d) undivided earnings.
             192          (3) "Corporate credit union" means any credit union organized pursuant to any state or
             193      federal act for the purpose of serving other credit unions.
             194          (4) "Credit union service organization" means a service organization that provides
             195      services that are:
             196          (a) subject to Subsection (4)(b), permitted by rule made by the commissioner in
             197      accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act; and
             198          (b) (i) except for the extension of credit by the service organization, limited primarily
             199      to:
             200          (A) credit unions that hold an ownership interest in the service organization;
             201          (B) members of credit unions that hold an ownership interest in the service
             202      organization; or
             203          (C) members of credit unions that contract with the service organization; and
             204          (ii) for purposes of the extension of credit by the service organization, limited to
             205      members of a credit union that holds an ownership interest in the service organization.
             206          [(4)] (5) "Deposits" means that portion of the capital paid into the credit union by
             207      members on which a specified rate of interest will be paid.
             208          (6) "[limited field] Field of membership" means persons designated as eligible for
             209      credit union membership in accordance with:
             210          (a) Section 7-9-51 or 7-9-53 [.]; and
             211          (b) the bylaws of the credit union.


             212          [(5)] (7) "Immediate family" means parents, spouse, surviving spouse, children, and
             213      siblings of the member.
             214          [(7)] (8) (a) "Member-business loan" means any loan, line of credit, or letter of credit,
             215      the proceeds of which will be used for:
             216          (i) a commercial purpose;
             217          (ii) other business investment property or venture purpose; or
             218          (iii) an agricultural purpose.
             219          (b) "Member-business loan" does not include an extension of credit:
             220          (i) that is fully secured by a lien on a one- to four- family dwelling that is the primary
             221      residence of a member;
             222          (ii) that is fully secured by:
             223          (A) shares or deposits in the credit union making the extension of credit; or
             224          (B) deposits in other financial institutions;
             225          (iii) the repayment of which is fully insured or fully guaranteed by, or where there is an
             226      advance commitment to purchase in full by, an agency of:
             227          (A) the federal government;
             228          (B) a state; or
             229          (C) a political subdivision of a state; or
             230          (iv) that is granted by a corporate credit union to another credit union.
             231          (9) "Nonexempt credit union" means a credit union that is a nonexempt credit union
             232      under Section 7-9-55 .
             233          [(8)] (10) "Service center" means a single location at which multiple credit unions can
             234      provide products or services directly to their members.
             235          [(9)] (11) "Share drafts," "deposit drafts," and "transaction accounts" mean accounts
             236      from which owners are permitted to make withdrawals by negotiable or transferable
             237      instruments or other orders for the purpose of making transfers to other persons or to the
             238      owner.
             239          [(10)] (12) "Shares" means that portion of the capital paid into the credit union by
             240      members on which dividends may be paid.
             241          Section 4. Section 7-9-5 is amended to read:
             242           7-9-5. Powers of credit unions.


             243          In addition to the powers specified elsewhere in this chapter and subject to any
             244      limitations specified elsewhere in this chapter, a credit union may:
             245          (1) make contracts;
             246          (2) sue and be sued;
             247          (3) acquire, lease, or hold fixed assets, including real property, furniture, fixtures, and
             248      equipment as the directors consider necessary or incidental to the operation and business of the
             249      credit union, but the value of the real property may not exceed 7% of credit union assets, unless
             250      approved by the commissioner;
             251          (4) pledge, hypothecate, sell, or otherwise dispose of real or personal property, either in
             252      whole or in part, necessary or incidental to its operation;
             253          (5) incur and pay necessary and incidental operating expenses;
             254          (6) require an entrance or membership fee;
             255          (7) receive the funds of its members in payment for:
             256          (a) shares;
             257          (b) share certificates;
             258          (c) deposits;
             259          (d) deposit certificates;
             260          (e) share drafts;
             261          (f) NOW accounts; and
             262          (g) other instruments;
             263          (8) allow withdrawal of shares and deposits, as requested by a member orally to a third
             264      party with prior authorization in writing, including, but not limited to, drafts drawn on the
             265      credit union for payment to the member or any third party, in accordance with the procedures
             266      established by the board of directors, including, but not limited to, drafts, third-party
             267      instruments, and other transaction instruments, as provided in the bylaws;
             268          (9) charge fees for its services;
             269          (10) extend credit to its members, at rates established in accordance with the bylaws or
             270      by the board of directors;
             271          (11) extend credit secured by real estate;
             272          (12) (a) subject to Subsection (12)(b), make co-lending arrangements, including loan
             273      participation arrangements [with other credit unions, credit union organizations, or financial


             274      organizations], in accordance with written policies of the board of directors[, if] with one or
             275      more:
             276          (i) other credit unions;
             277          (ii) credit union service organizations; or
             278          (iii) other financial organizations; and
             279          (b) make co-lending arrangements, including loan participation arrangements, in
             280      accordance with Subsection (12)(a) subject to the following:
             281          (i) the credit union or credit union service organization that originates a loan for which
             282      [participation] co-lending arrangements are made [retains] shall retain an interest of at least
             283      10% of the loan;
             284          (ii) on or after May 5, 2003, the originating credit union or credit union service
             285      organization may sell to a credit union an interest in a co-lending arrangement that involves a
             286      member-business loan only if the person receiving the member-business loan is a member of
             287      the credit union to which the interest is sold;
             288          (iii) on or after May 5, 2003, the originating credit union or credit union service
             289      organization may sell to a credit union service organization an interest in a co-lending
             290      arrangement that involves a member-business loan only if the person receiving the
             291      member-business loan is a member of a credit union that holds an interest in the credit union
             292      service organization to which the interest is sold; and
             293          (iv) a nonexempt credit union may not originate, participate in, or obtain any interest in
             294      a co-lending arrangement, including a loan participation arrangement, in violation of Section
             295      7-9-58 .
             296          (13) sell and pledge eligible obligations in accordance with written policies of the
             297      board of directors;
             298          (14) engage in activities and programs of the federal government or this state or any
             299      agency or political subdivision of the state, when approved by the board of directors and not
             300      inconsistent with this chapter;
             301          (15) act as fiscal agent for and receive payments on shares and deposits from the
             302      federal government, this state, or its agencies or political subdivisions not inconsistent with the
             303      laws of this state;
             304          (16) borrow money and issue evidence of indebtedness for a loan or loans for


             305      temporary purposes in the usual course of its operations;
             306          (17) discount and sell notes and obligations;
             307          (18) sell all or any portion of its assets to another credit union or purchase all or any
             308      portion of the assets of another credit union;
             309          (19) invest funds as provided in this title and in its bylaws;
             310          (20) maintain deposits in insured depository institutions as provided in this title and in
             311      its bylaws;
             312          (21) (a) hold membership in corporate credit unions organized under this chapter or
             313      under other state or federal statutes; and
             314          (b) hold membership or equity interest in associations and organizations of credit
             315      unions, including credit union service organizations;
             316          (22) declare and pay dividends on shares, contract for and pay interest on deposits, and
             317      pay refunds of interest on loans as provided in this title and in its bylaws;
             318          (23) collect, receive, and disburse funds in connection with the sale of negotiable or
             319      nonnegotiable instruments and for other purposes that provide benefits or convenience to its
             320      members, as provided in this title and in its bylaws;
             321          (24) make donations for the members' welfare or for civic, charitable, scientific, or
             322      educational purposes as authorized by the board of directors or provided in its bylaws;
             323          (25) act as trustee of funds permitted by federal law to be deposited in a credit union as
             324      a deferred compensation or tax deferred device, including, but not limited to, individual
             325      retirement accounts as defined by Section 408, Internal Revenue Code;
             326          (26) purchase reasonable accident and health insurance, including accidental death
             327      benefits, for directors and committee members through insurance companies licensed in this
             328      state as provided in its bylaws;
             329          (27) provide reasonable protection through insurance or other means to protect board
             330      members, committee members, and employees from liability arising out of consumer
             331      legislation such as, but not limited to, truth-in-lending and equal credit laws and as provided in
             332      its bylaws;
             333          (28) reimburse directors and committee members for reasonable and necessary
             334      expenses incurred in the performance of their duties;
             335          (29) participate in systems which allow the transfer, withdrawal, or deposit of funds of


             336      credit unions or credit union members by automated or electronic means and hold membership
             337      in entities established to promote and effectuate these systems, if:
             338          (a) the participation is not inconsistent with the law and rules of the department; and
             339          (b) any credit union participating in any system notifies the department as provided by
             340      law;
             341          (30) issue credit cards and debit cards to allow members to obtain access to their
             342      shares, deposits, and extensions of credit;
             343          (31) provide any act necessary to obtain and maintain membership in the credit union;
             344          (32) exercise incidental powers necessary to carry out the purpose for which a credit
             345      union is organized;
             346          (33) undertake other activities relating to its purpose as its bylaws may provide;
             347          (34) engage in other activities, exercise other powers, and enjoy other rights,
             348      privileges, benefits, and immunities authorized by rules of the commissioner;
             349          (35) act as trustee, custodian, or administrator for Keogh plans, individual retirement
             350      accounts, credit union employee pension plans, and other employee benefit programs; and
             351          (36) advertise to the general public the products and services offered by the credit
             352      union if the advertisement prominently discloses that to use the products or services of the
             353      credit union a person is required to:
             354          (a) be eligible for membership in the credit union; and
             355          (b) become a member of the credit union.
             356          Section 5. Section 7-9-6 is amended to read:
             357           7-9-6. Formation of corporation to conduct credit union -- Approval of
             358      commissioner.
             359          (1) (a) Ten or more incorporators belonging to the same group of 200 persons or more
             360      having a [limited] field of membership may, with the approval of the commissioner, form a
             361      corporation to conduct a credit union under:
             362          (i) this chapter;
             363          (ii) Title 16, Chapter 10a, Utah Revised Business Corporation Act; and
             364          (iii) Chapter 1, General Provisions.
             365          (b) This chapter takes precedence over conflicting provisions of other state law
             366      governing:


             367          (i) the formation of the corporation; and
             368          (ii) the duties and obligations of:
             369          (A) the corporation;
             370          (B) the corporation's officers; and
             371          (C) the corporation's shareholders or members.
             372          (2) The commissioner may grant the approval referenced in Subsection (1) if the
             373      commissioner finds that:
             374          (a) the proposed [limited] field of membership is favorable to the success of the credit
             375      union;
             376          (b) the standing of the proposed membership will give assurance that its affairs will be
             377      administered in accordance with this chapter;
             378          (c) the proposed credit union has a reasonable promise of financial viability; and
             379          (d) formation of the credit union would not result in a substantial adverse financial
             380      impact on an existing credit union having the same or substantially the same [limited] field of
             381      membership.
             382          (3) (a) Except as provided in Subsection (3)(b) and in addition to the requirements of
             383      Subsections (1) and (2), Section 7-1-704 governs the formation of a credit union.
             384          (b) Notwithstanding Subsection (3)(a):
             385          (i) if the proposed credit union has a [limited] field of membership that does not base
             386      eligibility on residence in a county, the persons seeking formation of the proposed credit union
             387      are not required to provide the notice required under Subsection 7-1-704 (3); and
             388          (ii) a credit union may not be required to obtain federal insurance if the credit union
             389      complies with Subsection 7-9-45 (2).
             390          Section 6. Section 7-9-11 is amended to read:
             391           7-9-11. Bylaws and amendments to be approved.
             392          (1) A credit union may not receive payments on shares, deposits, or certificates, or
             393      make any loans or other transactions, until its bylaws have been approved in writing by the
             394      commissioner.
             395          (2) An amendment to a credit union's bylaws does not become operative until the
             396      amendment to the bylaws is approved by the commissioner.
             397          (3) (a) If the amendment to the bylaws of a credit union expands the [limited] field of


             398      membership of a credit union as described in Subsection 7-9-52 (1), the commissioner's
             399      approval of the amendment is subject to Section 7-9-52 .
             400          [(b) If the amendment to the bylaws of a credit union terminates the grandfathering of a
             401      limited field of membership under Section 7-9-54 , the commissioner's approval of the
             402      amendment is subject to Section 7-9-54 .]
             403          [(c)] (b) If the bylaws or an amendment to the bylaws of a credit union adds an
             404      association to the [limited] field of membership of the credit union, the commissioner may
             405      require that the credit union provide written confirmation from the association that the
             406      association has agreed to be served by the credit union.
             407          Section 7. Section 7-9-12 is amended to read:
             408           7-9-12. Contents of bylaws.
             409          The bylaws of a credit union shall specify at least the following:
             410          (1) the name of the credit union;
             411          (2) the purpose for which [it] the credit union was formed;
             412          (3) a [limited] field of membership of the credit union that complies with Section
             413      7-9-51 or 7-9-53 ;
             414          (4) the number of directors and procedures for their election;
             415          (5) the term of directors;
             416          (6) whether a credit manager, credit committee, or combination of both shall be
             417      responsible for credit functions of the credit union;
             418          (7) the duties of the officers;
             419          (8) the time of year of the annual meeting of members;
             420          (9) the manner in which members shall be notified of meetings;
             421          (10) the number of members which shall constitute a quorum at meetings;
             422          (11) the manner of amending;
             423          (12) the manner in which officers may act as surety; and
             424          (13) such other matters, rules, and regulations as the board of directors consider
             425      necessary.
             426          Section 8. Section 7-9-16 is amended to read:
             427           7-9-16. Members -- Eligibility -- Liability -- Grounds for closing account -- Denial
             428      of membership.


             429          (1) A person within the [limited] field of membership of a credit union may be admitted
             430      to membership, upon:
             431          (a) payment of any required entrance or membership fee;
             432          (b) payment for one or more shares; and
             433          (c) compliance with this chapter and the bylaws of the credit union.
             434          (2) A member who is eligible for membership in a credit union at the time the member
             435      is admitted as a member but who is no longer in the [limited] field of membership of the credit
             436      union may retain membership in the credit union unless otherwise provided in the bylaws of
             437      the credit union.
             438          (3) A member of the credit union may not be held personally or individually liable for
             439      payment of the credit union's debts.
             440          (4) The credit union may close the account of any member whose actions have resulted
             441      in any financial loss to the credit union.
             442          (5) Denial of membership is not considered a denial of credit.
             443          Section 9. Section 7-9-20 is amended to read:
             444           7-9-20. Board of directors -- Powers and duties -- Loan limitations.
             445          (1) At annual meetings the members shall elect from their number a board of directors
             446      consisting of an odd number of not less than five members.
             447          (2) The bylaws may provide balloting by:
             448          (a) mail;
             449          (b) ballot box; or
             450          (c) both mail and ballot box.
             451          (3) Voting may not be by proxy.
             452          (4) Members of the board of directors shall hold office for the terms prescribed in the
             453      bylaws.
             454          (5) The board of directors shall meet at least monthly.
             455          (6) The board of directors shall have the general management of the affairs, funds, and
             456      records of the credit union. In particular, the board of directors shall:
             457          (a) act upon applications for membership;
             458          (b) act upon expulsion of members;
             459          (c) fix the amount of surety bond required of each officer or employee having custody


             460      of funds;
             461          (d) determine the rate of interest or dividend allowed on shares and deposits;
             462          (e) determine the terms and conditions of credit granted to members;
             463          (f) lend money, borrow money, and pledge security for any borrowing;
             464          (g) fill vacancies in the board of directors or in the credit committee, if applicable, or in
             465      the supervisory committee until the election and qualification of officers to fill those vacancies;
             466          (h) appoint up to two alternate directors as provided in the bylaws;
             467          (i) fix the amount of the entrance fee;
             468          (j) declare dividends and their amount;
             469          (k) make recommendations to meetings of the members relative to amendments to the
             470      articles of incorporation, and transact any other business of the credit union; and
             471          (l) fix the maximum amount of credit, secured and unsecured, that may be extended to
             472      any one member, up to the limitations described in [Subsection] Subsections (7) and (8).
             473          (7) (a) The credit that may be outstanding or available by a credit union at any one time
             474      is subject to the limitations described in [Subsections] this Subsection (7)[(b) and (c)]:
             475          (i) except as provided in Subsection [(7)(d) through (7)(f)] (8); and
             476          (ii) except that the board of directors may:
             477          (A) set a lower limit than the limit in Subsection (7)(b)(i) or (7)(b)(ii)(B); or
             478          (B) require that a person described in Subsection (7)(b)(ii)(A) be a member of the
             479      credit union for more than six months before the date a member-business loan is extended.
             480          (b) (i) A credit union may not extend credit that is not a member-business loan to a
             481      member if as a result of that extension of credit the total credit that is not a member-business
             482      loan that the credit union has issued to that member exceeds at any one time:
             483          (A) for a credit union with less than $2,000,000 in capital and surplus, the greater of:
             484          (I) $1,000; or
             485          (II) 15% of capital and surplus up to a total of $25,000; or
             486          (B) for a credit union with $2,000,000 or more in capital and surplus, the greater of:
             487          (I) $25,000;
             488          (II) 1% of capital and surplus; or
             489          (III) 25% of the regular reserve.
             490          (ii) Beginning March 24, 1999, a credit union may not extend a member-business loan


             491      to a person:
             492          (A) (I) if the person is a business entity, unless at least one individual having a
             493      controlling interest in that business entity has been a member of the credit union for at least six
             494      months prior to the date of the extension of the member-business loan; or
             495          (II) if the person is an individual, unless the individual is a member of the credit union
             496      for at least six months prior to the date of the extension of the member-business loan; or
             497          (B) if as a result of the extension of the member-business loan, the total amount
             498      outstanding for all member-business loans that the credit union has extended to that person at
             499      any one time exceeds the lesser of:
             500          (I) 10% of the credit union's capital and surplus; or
             501          (II) $250,000.
             502          (c) (i) Beginning March 24, 1999, a credit union may not extend a member-business
             503      loan if as a result of that member-business loan the credit union's aggregate member-business
             504      loan amount calculated under Subsection (7)(c)(ii) at any one time exceeds 1.25 times the sum
             505      of:
             506          (A) the actual undivided earnings; and
             507          (B) the actual reserves other than the regular reserves.
             508          (ii) For purposes of Subsection (7)(c)(i), the aggregate member-business loan amount
             509      of a credit union equals:
             510          (A) the sum of the total amount financed under all member-business loans outstanding
             511      at the credit union; minus
             512          (B) the amount of the member-business loans described in Subsection (7)(c)(ii)(A):
             513          (I) that is secured by share or deposit savings in the credit union; or
             514          (II) for which the repayment is insured or guaranteed by, or there is an advance
             515      commitment to purchase by an agency of the federal government, a state, or a political
             516      subdivision of the state.
             517          (d) (i) A credit union service organization may extend credit to a member of a credit
             518      union holding an ownership interest in the credit union service organization only if the credit
             519      union in which the person is a member is not prohibited from extending that credit to that
             520      member under:
             521          (A) this Subsection (7) and Subsection (8); or


             522          (B) Section 7-9-57 .
             523          (ii) For purposes of determining whether under this Subsection (7) and Subsection (8) a
             524      credit union may extend credit, the total amount outstanding of credit extended by a credit
             525      union service organization to a person shall be treated as if the credit was extended by the
             526      credit union in which the person is a member.
             527          (iii) If a person seeking an extension of credit from a credit union service organization
             528      is a member of more than one credit union holding an ownership interest in the credit union
             529      service organization, the person shall specify the credit union to which the extension of credit
             530      is attributed under Subsection (7)(d)(ii).
             531          (iv) This Subsection (7)(d) effects only an extension of credit:
             532          (A) that is extended on or after May 5, 2003; and
             533          (B) by:
             534          (I) a credit union service organization; or
             535          (II) a credit union organized under this chapter.
             536          (e) Notwithstanding the other provisions of this section, a nonexempt credit union may
             537      not extend credit that the nonexempt credit union is prohibited from extending under Section
             538      7-9-58 .
             539          [(d)] (8) (a) A credit union may extend credit that is not a member-business loan in an
             540      amount that exceeds the limits described in Subsection (7)(b)(i) only if the excess portion is
             541      fully secured by share or deposit savings in the credit union.
             542          [(e)] (b) (i) Except as provided in Subsection [(7)(e)] (8)(b)(ii), a credit union may
             543      extend a member-business loan in an amount that exceeds the limits described in Subsection
             544      (7)(b)(ii)(B) only if:
             545          (A) that portion that is in excess of the limits described in Subsection (7)(b)(ii)(B) is
             546      secured by share or deposit savings in the credit union; or
             547          (B) the repayment of that portion that is in excess of the limits described in Subsection
             548      (7)(b)(ii)(B) is insured or guaranteed by, or there is an advance commitment to purchase that
             549      excess portion by, an agency of:
             550          (I) the federal government;
             551          (II) a state; or
             552          (III) a political subdivision of the state.


             553          (ii) Notwithstanding Subsection [(7)(e)] (8)(b)(i), a credit union may not extend a
             554      member-business loan if the total amount financed by the credit union exceeds $1,000,000.
             555          [(f)] (c) For a member-business loan that is extended through a loan participation
             556      arrangement in accordance with Subsection 7-9-5 (12):
             557          (i) in applying the limitation of Subsection [(7)(e)] (8)(b), each credit union
             558      participating in the member-business loan may extend up to $1,000,000 of the amount
             559      financed; and
             560          (ii) the requirement of Subsection (7)(b)(ii)(A) applies to membership in any credit
             561      union that participates in the loan participation arrangement for the member-business loan.
             562          [(8)] (9) As provided in this chapter or in the credit union bylaws, the board of
             563      directors:
             564          (a) within 30 days following the annual meeting of the members, shall appoint a
             565      supervisory committee consisting of not less than three members;
             566          (b) within 30 days after the annual meeting of the members, shall appoint:
             567          (i) a credit committee consisting of not less than three members; or
             568          (ii) a credit manager in lieu of a credit committee;
             569          (c) shall appoint a president to serve as general manager;
             570          (d) shall have an executive committee;
             571          (e) may appoint an investment officer;
             572          (f) shall elect a secretary;
             573          (g) may appoint other officers and committees that it considers necessary;
             574          (h) shall establish written credit policies, loan security requirements, loan investment,
             575      personnel, and collection policies; and
             576          (i) on or before January 31 of each year, shall provide for:
             577          (i) share insurance for the shares and deposits of the credit union from the National
             578      Credit Union Administration or successor federal agency; or
             579          (ii) security expressly pledged for the payment of the shares and deposits in accordance
             580      with Section 7-9-45 .
             581          [(9)] (10) A person may not be a member of more than one committee except as
             582      otherwise provided in this chapter or in the credit union bylaws.
             583          [(10)] (11) The president and secretary may not be the same person.


             584          Section 10. Section 7-9-26 is amended to read:
             585           7-9-26. Loans to members -- Investment officers -- Investments.
             586          (1) [The] Subject to Subsections 7-9-20 (7) and (8) and Section 7-9-58 , capital and
             587      surplus of the credit union shall be loaned to the members for the purposes and upon the
             588      endorsements or security and the terms as the bylaws provide.
             589          (2) Within 30 days after the annual meeting of the members the board of directors may
             590      appoint one or more investment officers who shall have responsibilities for the credit union
             591      investment portfolio based upon policy established by the board of directors and as provided in
             592      this chapter or in the bylaws.
             593          (3) The credit union by action of its board of directors may invest its funds as follows:
             594          (a) in securities, obligations, or other instruments of, or issued by, or fully guaranteed
             595      as to principal and interest by, the United States of America or any of its agencies, or in any
             596      trusts established by investing directly or collectively in these instruments;
             597          (b) in obligations of any state of the United States, the District of Columbia, the
             598      Commonwealth of Puerto Rico, and the territories organized by Congress, or any of their
             599      political subdivisions;
             600          (c) in certificates of deposit or accounts issued by a federally insured state or national
             601      depository institution;
             602          (d) in loans to, or in shares or deposits of, other federally insured credit unions, central
             603      credit unions, corporate credit unions, or a central liquidity facility established under state or
             604      federal law;
             605          (e) in shares, stocks, loans, or other obligations of any organization, corporation, or
             606      association, if the membership or ownership of the organization, corporation, or association is
             607      primarily confined or restricted to credit unions, and if the purpose for which it is organized is
             608      to strengthen or advance the development of credit unions or credit union organizations; and
             609          (f) in other investments that are reasonable and prudent.
             610          Section 11. Section 7-9-34 is amended to read:
             611           7-9-34. Tax exemption of credit unions.
             612          (1) Except as otherwise provided in this section, a credit [unions] union organized
             613      under this chapter [or prior law are] is exempt from taxation.
             614          (2) Any real property or any tangible personal property owned by the credit union shall


             615      be subject to taxation to the same extent as other similar property is taxed.
             616          (3) (a) [For purposes of the corporate tax, credit unions shall be governed by] Except as
             617      otherwise provided in Subsection (3)(b), a credit union organized under this chapter is exempt
             618      from Title 59, Chapter 7, Corporate Franchise and Income Taxes, as provided in Section
             619      59-7-102 .
             620          (b) In accordance with Section 59-7-102 , a nonexempt credit union is subject to Title
             621      59, Chapter 7, Corporate Franchise and Income Taxes, beginning on the date specified by the
             622      Legislature in the 2005 General Session if the Legislature affirmatively states that a nonexempt
             623      credit union is subject to Title 59, Chapter 7, Corporate Franchise and Income Taxes.
             624          (4) This section does not exempt credit unions from sales or use taxes, or fees owed to
             625      the department in accordance with this title and rules of the department.
             626          Section 12. Section 7-9-37 is amended to read:
             627           7-9-37. Transfer of members of dissolved, merged, consolidated, transferred, or
             628      acquired credit union.
             629          Members of a dissolved, merged, consolidated, transferred, or acquired credit union
             630      may become members of another existing credit union with a related [limited] field of
             631      membership as approved by the commissioner.
             632          Section 13. Section 7-9-39 is amended to read:
             633           7-9-39. Voluntary merger.
             634          (1) Any credit union may merge with another credit union under the existing charter of
             635      the other credit union when all of the following have occurred:
             636          (a) the majority of the directors of each merging credit union votes in favor of the
             637      merger plan;
             638          (b) the commissioner approves the merger plan;
             639          (c) the majority of the members of each merging credit union present at a meeting
             640      called for the purpose of considering the merger plan votes to approve the merger plan, but a
             641      vote of the membership of the surviving credit union is not required if its board of directors
             642      determines that the merger will not have any significant effect on the organization,
             643      membership, or financial condition of the credit union; and
             644          (d) (i) the National Credit Union Administration or its successor federal deposit
             645      insurance agency approves the merger plan and commits to insure deposits of the surviving


             646      credit union; or
             647          (ii) the commissioner approves the surviving credit union to operate without federal
             648      deposit insurance in accordance with Section 7-9-45 .
             649          (2) Upon merger, the chair of the board and secretary of each credit union shall
             650      execute, and file with the department, a certificate of merger setting forth:
             651          (a) the time and place of the meeting of the board of directors at which the plan was
             652      approved;
             653          (b) the vote by which the directors approved the plan;
             654          (c) a copy of the resolution or other action by which the plan was approved;
             655          (d) the time and place of the meeting of the members at which the plan was approved;
             656          (e) the vote by which the members approved the plan; and
             657          (f) the effective date of the merger, which shall be:
             658          (i) the date on which the last approval or vote required under Subsection (1) was
             659      obtained; or
             660          (ii) a later date specified in the merger plan.
             661          (3) On the effective date of any merger:
             662          (a) all property, property rights, and interests of the merged credit union shall vest in
             663      the surviving credit union without deed, endorsement, or other instrument of transfer; and
             664          (b) all debts, obligations, and liabilities of the merged credit union are considered to
             665      have been assumed by the surviving credit union.
             666          (4) Except as provided in Subsection (5)(b), if the surviving credit union is chartered
             667      under this chapter, the residents of a county in the [limited] field of membership of the merging
             668      credit union may not be added to the [limited] field of membership of the surviving credit
             669      union, except that the surviving credit union:
             670          (a) may admit as a member any member of the merging credit union that is not in the
             671      [limited] field of membership of the surviving credit union if the member of the merging credit
             672      union was a member of that credit union at the time of merger; and
             673          (b) may service any member-business loan of the merging credit union until the
             674      member-business loan is paid in full.
             675          (5) (a) This section shall be interpreted, whenever possible, to permit a credit union
             676      chartered under this chapter to merge with a credit union chartered under any other law if the


             677      preservation of membership interest is concerned.
             678          (b) The commissioner may under Subsection (1)(b) approve a merger plan that
             679      includes the addition of the residents of a county in the [limited] field of membership of the
             680      merging credit union to the [limited] field of membership of the surviving credit union if the
             681      commissioner finds that:
             682          (i) the expansion of the [limited] field of membership of the surviving credit union is
             683      necessary for that credit union's safety and soundness; and
             684          (ii) the expanded [limited] field of membership of the surviving credit union meets the
             685      criteria stated in Subsection 7-9-52 (3)(c).
             686          (6) If the commissioner approves a merger plan under Subsection (5)(b) under which
             687      the surviving credit union's [limited] field of membership after the merger will include
             688      residents of more than one county, Subsections (6)(a) through (e) apply to the surviving credit
             689      union.
             690          (a) The domicile-county of the surviving credit union is:
             691          (i) if the credit union does not have a [limited] field of membership under Subsection
             692      7-9-53 (2)(c) or (2)(d), the county in which the credit union has located the greatest number of
             693      branches as of the date the merger is effective; or
             694          (ii) if the credit union has a [limited] field of membership under Subsection
             695      7-9-53 (2)(c) or (2)(d), the county that is the domicile-county of the surviving credit union
             696      under Section 7-9-53 ;
             697          (b) Within the surviving credit union's domicile-county, the surviving credit union may
             698      establish, relocate, or otherwise change the physical location of the credit union's:
             699          (i) main office; or
             700          (ii) branch.
             701          (c) Within a county other than the domicile-county that is in the [limited] field of
             702      membership of the surviving credit union after the merger, the surviving credit union may not:
             703          (i) establish a main office or branch if the main office or branch was not located in the
             704      county as of the date that the merger is effective;
             705          (ii) participate in a service center in which it does not participate as of the date that the
             706      merger is effective; or
             707          (iii) relocate the surviving credit union's main office or a branch located in the county


             708      as of the date that the merger is effective unless the commissioner finds that the main office or
             709      branch is being relocated within a three-mile radius of the original location of the main office
             710      or branch.
             711          (d) After the merger, the surviving credit union may admit as a member:
             712          (i) a person in the surviving credit union's [limited] field of membership after the date
             713      that the merger is effective; or
             714          (ii) a person belonging to an association that:
             715          (A) is added to the [limited] field of membership of the credit union; and
             716          (B) resides in the domicile-county of the surviving credit union, as defined in Section
             717      7-9-53 .
             718          (e) In addition to any requirement under this Subsection (6), a surviving credit union
             719      shall comply with any requirement under this title for the establishment, relocation, or change
             720      in the physical location of a main office or branch of a credit union.
             721          Section 14. Section 7-9-39.5 is amended to read:
             722           7-9-39.5. Supervisory merger.
             723          If a credit union is merged with another credit union as a result of a supervisory action
             724      under Chapter 2 or 19, the commissioner may permit the surviving credit union to have a
             725      [limited] field of membership that is larger than a [limited] field of membership permitted
             726      under Section 7-9-51 .
             727          Section 15. Section 7-9-46 is amended to read:
             728           7-9-46. Out-of-state credit unions -- Authorization to do business in state --
             729      Supervision -- Examination.
             730          (1) As used in this section "out-of-state credit union" means any credit union whose
             731      home state is not Utah.
             732          (2) An out-of-state credit union may maintain a branch in this state only if:
             733          (a) maintaining the Utah branch is permissible under applicable law, including
             734      Sections 7-1-702 and 7-1-708 in the case of a state chartered credit union; [and]
             735          (b) the branch has been authorized by:
             736          (i) the department and the chartering authority of the credit union's home state in the
             737      case of a state chartered credit union; or
             738          (ii) the National Credit Union Administration or successor agency in the case of a


             739      federally chartered credit union[.]; and
             740          (c) the branch will not serve a member of the out-of-state credit union who is a
             741      member of the credit union based solely on the member residing in a geographic area located in
             742      whole or in part in Utah.
             743          (3) The commissioner may examine and supervise all out-of-state credit unions with a
             744      branch in the state, except federal credit unions, in the same manner as the commissioner
             745      examines and supervises credit unions in this state.
             746          Section 16. Section 7-9-51 is amended to read:
             747           7-9-51. Field of membership.
             748          (1) Except as provided in Subsection (3) or (5), the [limited ] field of membership of a
             749      credit union may include only the following:
             750          (a) the immediate family of a member of the credit union;
             751          (b) the employees of the credit union;
             752          (c) residents of a single county; [and]
             753          (d) one or more associations[.]; and
             754          (e) residents of a city of the third class or a town as classified in Section 10-2-301 if:
             755          (i) the city or town is located in a county of the fourth through sixth class a classified in
             756      Section 17-50-501 ;
             757          (ii) at the time the residents of the city or town are included in the field of membership
             758      of a credit union, the credit union has not become a nonexempt credit union under Section
             759      7-9-55 ; and
             760          (iii) approved by the commissioner in accordance with Subsection 7-9-52 (6).
             761          (2) A credit union may have a [limited] field of membership that is more restrictive
             762      than the [limited] field of membership described in Subsection (1).
             763          (3) A credit union may have a [limited] field of membership that is less restrictive than
             764      the [limited] field of membership described in Subsection (1) if the [limited] field of
             765      membership of the credit union:
             766          (a) is determined under Subsection 7-9-53 (2)(c) or (2)(d);
             767          (b) is approved by the commissioner after a merger under Subsection 7-9-39 (5); or
             768          (c) is permitted by the commissioner after a merger in accordance with Section
             769      7-9-39.5 .


             770          (4) If a credit union includes the residents of one county in its [limited] field of
             771      membership, the credit union may not change its [limited] field of membership to include a
             772      different county than the county that is first included in the [limited] field of membership of the
             773      credit union.
             774          (5) Notwithstanding the other provisions of this section or any restrictions of Section
             775      7-9-53 , a credit union may have a field of membership that is less restrictive than the field of
             776      membership described in Subsection (1), under the following conditions:
             777          (a) the field of membership of the credit union may include no more than all the
             778      residents of two counties in addition to any association included in the field of membership of
             779      the credit union; and
             780          (b) both counties described in Subsection (5)(a) must be a county of the third through
             781      sixth class, as classified in Section 17-50-501 .
             782          Section 17. Section 7-9-52 is amended to read:
             783           7-9-52. Expansion of a field of membership.
             784          (1) The commissioner shall comply with Subsection (2) if the commissioner receives a
             785      request to approve an amendment to the bylaws of a credit union that expands the credit union's
             786      [limited] field of membership to include:
             787          (a) residents of [one] a county; [or]
             788          (b) an association consisting of 50 or more persons[.]; or
             789          (c) subject to the requirements of Subsection (6), residents of a city of the third class or
             790      a town described in Subsection 7-9-51 (1)(e).
             791          (2) If the conditions of Subsection (1) are met, the commissioner shall:
             792          (a) give notice of the request in the manner and to the extent the commissioner
             793      considers appropriate to institutions subject to the jurisdiction of the department that:
             794          (i) are located in the county, if the [limited] field of membership is being expanded to
             795      include residents of a county; [or]
             796          (ii) serve or may serve the association described in Subsection (1)(b), if that association
             797      is being added to the [limited] field of membership; [and] or
             798          (iii) are located in the county in which a city or town described in Subsection (1)(c) is
             799      located, if the field of membership is being expanded to include residents of the city or town;
             800      and


             801          (b) cause a supervisor to examine and submit written findings and recommendations to
             802      the commissioner as to:
             803          (i) whether the credit union is adequately capitalized;
             804          (ii) whether the credit union has the financial capacity to serve the financial needs of
             805      the expanded [limited] field of membership in a safe and sound manner;
             806          (iii) whether the credit union has the managerial expertise to serve the financial needs
             807      of the expanded [limited] field of membership in a safe and sound manner;
             808          (iv) any potential harm the expansion of the [limited] field of membership may have on
             809      the institutions described in Subsection (2)(a); and
             810          (v) the probable beneficial effect of the expansion.
             811          (3) The commissioner may approve the amendment to the bylaws described in
             812      Subsection (1) if the commissioner:
             813          (a) has given the notice required under Subsection (2)(a);
             814          (b) received the written findings and recommendations of the supervisor under
             815      Subsection (2)(b); and
             816          (c) finds that:
             817          (i) the credit union is adequately capitalized;
             818          (ii) the credit union has the financial capacity to serve the financial needs of the
             819      expanded [limited] field of membership in a safe and sound manner;
             820          (iii) the credit union has the managerial expertise to serve the financial needs of the
             821      expanded [limited] field of membership in a safe and sound manner; and
             822          (iv) any potential harm the expansion of the [limited] field of membership may have on
             823      other institutions subject to the jurisdiction of the department does not clearly outweigh the
             824      probable beneficial effect of the expansion.
             825          (4) In accordance with Section 7-1-309 , the commissioner may hold a hearing on the
             826      expansion of a credit union's [limited] field of membership.
             827          (5) This section may not be interpreted to permit a credit union to:
             828          (a) expand its [limited] field of membership to include residents of more than one
             829      county except to the extent permitted by Subsection 7-9-51 (5); or
             830          (b) change the county included in the [limited] field of membership of a credit union, if
             831      any.


             832          (6) (a) If the commissioner receives a request to approve an amendment to the bylaws
             833      of a credit union that expands the credit union's field of membership to include residents of a
             834      city or town described in Subsection (1)(c), before approving the expanded field of
             835      membership, in addition to the requirements of Subsection (2), the commissioner shall:
             836          (i) require that a supervisor examine and submit written findings and recommendations
             837      to the commissioner as to whether but for the residents described in Subsection (1)(c) being
             838      included in the field of membership of the credit union, no depository institutions would likely
             839      be located within a reasonable distance from the city or town described in Subsection (1)(c);
             840      and
             841          (ii) find that but for the residents described in Subsection (1)(c) being included in the
             842      field of membership of the credit union, no depository institutions would likely be located
             843      within a reasonable distance from the city or town described in Subsection (1)(c).
             844          (b) A nonexempt credit union may not apply under this Subsection (6) to include a city
             845      or town described in Subsection (1)(c) in the nonexempt credit union's field of membership.
             846          Section 18. Section 7-9-53 is amended to read:
             847           7-9-53. Grandfathering.
             848          (1) As used in this section [and Section 7-9-54 ]:
             849          (a) "Association that resides in a domicile-county" means an association that:
             850          (i) operates a place of business or other physical location in the domicile-county; or
             851          (ii) has at least 100 members that are residents of the domicile-county.
             852          (b) "Domicile-county" means the county:
             853          (i) in the [limited] field of membership of the credit union as of January 1, 1999; and
             854          (ii) in which the credit union has located the greatest number of branches as of January
             855      1, 1999.
             856          (c) "Grandfathered [limited] field of membership" means the [limited] field of
             857      membership as of May 3, 1999, of a credit union described in Subsection (2)(d).
             858          (2) For each credit union formed before January 1, 1999, its [limited] field of
             859      membership as of May 3, 1999, is determined as follows:
             860          (a) if the [limited] field of membership stated in the bylaws of the credit union as of
             861      January 1, 1999, complies with Section 7-9-51 , the credit union's [limited] field of membership
             862      is the [limited] field of membership indicated in its bylaws;


             863          (b) (i) the [limited] field of membership of a credit union as of May 3, 1999, is as
             864      provided in Subsection (2)(b)(ii) if:
             865          (A) the [limited] field of membership stated in the bylaws of the credit union as of
             866      January 1, 1999, includes the residents of more than one county; and
             867          (B) as of January 1, 1999, the credit union's main office and any of its branches are
             868      located in only one county in its [limited] field of membership;
             869          (ii) as of May 3, 1999, the [limited] field of membership of a credit union described in
             870      Subsection (2)(b)(i) is:
             871          (A) the immediate family of a member of the credit union;
             872          (B) the employees of the credit union;
             873          (C) residents of the one county in which the credit union has its main office or
             874      branches as of January 1, 1999, and
             875          (D) any association that as of January 1, 1999, is in the [limited] field of membership
             876      of the credit union;
             877          (c) (i) the [limited] field of membership of a credit union as of May 3, 1999, is as
             878      provided in Subsection (2)(c)(ii) if:
             879          (A) the [limited] field of membership of a credit union stated in the bylaws of the
             880      credit union as of January 1, 1999, includes residents of more than one county;
             881          (B) as of January 1, 1999, the credit union has a main office or branch in more than one
             882      county; and
             883          (C) as a result of a merger pursuant to a supervisory action under Chapter 2 or 19 that
             884      is effective on or after January 1, 1983, but before January 1, 1994, the credit union acquired a
             885      branch in a county in the [limited] field of membership of the credit union and the credit union
             886      did not have a branch in the county before the merger;
             887          (ii) as of May 3, 1999, the [limited] field of membership of a credit union described in
             888      Subsection (2)(c)(i) is the same [limited] field of membership that the credit union would have
             889      had under Subsection (2)(d) except that the credit union:
             890          (A) is not subject to Subsection (3); and
             891          (B) is subject to Subsection (4)(b); and
             892          (d) (i) the [limited] field of membership of a credit union as of May 3, 1999, is as
             893      provided in Subsection (2)(d)(ii) if:


             894          (A) the [limited] field of membership stated in the bylaws of the credit union as of
             895      January 1, 1999, includes the residents of more than one county; and
             896          (B) as of January 1, 1999, the credit union has a main office or branch in more than one
             897      county;
             898          (ii) as of May 3, 1999, the [limited] field of membership of a credit union described in
             899      Subsection (2)(d)(i) is:
             900          (A) the immediate family of a member of the credit union;
             901          (B) the employees of the credit union;
             902          (C) residents of the credit union's domicile-county;
             903          (D) the residents of any county other than the domicile-county:
             904          (I) if, as of January 1, 1999, the county is in the [limited] field of membership of the
             905      credit union; and
             906          (II) in which, as of January 1, 1994, the credit union had located its main office or a
             907      branch; and
             908          (E) any association that as of January 1, 1999, is in the [limited] field of membership
             909      of the credit union.
             910          (3) If a credit union's [limited] field of membership is as described in Subsection
             911      (2)(d), beginning May 3, 1999, the credit union:
             912          (a) within the credit union's domicile-county, may establish, relocate, or otherwise
             913      change the physical location of the credit union's:
             914          (i) main office; or
             915          (ii) branch;
             916          (b) within a county other than a domicile-county that is in the credit union's
             917      grandfathered [limited] field of membership, may not:
             918          (i) establish a main office or branch that:
             919          (A) was not located in the county as of January 1, 1999; or
             920          (B) for which the credit union has not received by January 1, 1999, approval or
             921      conditional approval of a site plan for the main office or branch from the planning commission
             922      of the municipality where the main office or branch will be located;
             923          (ii) participate in a service center in which it does not participate as of January 1, 1999;
             924      [or]


             925          (iii) relocate the credit union's main office or a branch located in the county as of
             926      January 1, 1999, unless the commissioner finds that the main office or branch is relocated
             927      within a three-mile radius of where it was originally located; [and] or
             928          (iv) after a voluntary merger under Section 7-9-39 , operate a branch in the county if:
             929          (A) the effective date of the merger is on or after May 5, 2003;
             930          (B) the credit union with the field of membership described in Subsection (2)(d) is the
             931      surviving credit union after the merger; and
             932          (C) the credit union did not own and operate the branch before the effective date of the
             933      merger; and
             934          (c) may only admit as a member:
             935          (i) a person in the credit union's grandfathered [limited] field of membership; or
             936          (ii) a person belonging to an association that:
             937          (A) is added to the [limited] field of membership of the credit union; and
             938          (B) resides in the domicile-county of the credit union.
             939          (4) (a) If a credit union's [limited] field of membership is as described in Subsection
             940      (2)(b), as of May 3, 1999, the credit union may operate as a credit union having a [limited]
             941      field of membership under Section 7-9-51 .
             942          (b) If a credit union's [limited] field of membership is as described in Subsection (2)(c),
             943      as of May 3, 1999, the credit union:
             944          (i) within the credit union's domicile-county, may establish, relocate, or otherwise
             945      change the physical location of the credit union's:
             946          (A) main office; or
             947          (B) branch;
             948          (ii) within a county other than its domicile-county that is in the credit union's [limited]
             949      field of membership under Subsection (2)(c), may not:
             950          (A) establish a main office or branch that was not located in the county as of January 1,
             951      1999;
             952          (B) participate in a service center in which it does not participate as of January 1, 1999;
             953      or
             954          (C) relocate the credit union's main office or a branch located in the county as of
             955      January 1, 1999, unless the commissioner finds that the main office or branch is relocated


             956      within a three-mile radius of where it was originally located; and
             957          (iii) may only admit as a member:
             958          (A) a person in the credit union's [limited] field of membership under Subsection
             959      (2)(c); or
             960          (B) a person belonging to an association that is added to the [limited] field of
             961      membership of the credit union, regardless of whether the association resides in the
             962      domicile-county of the credit union.
             963          (5) (a) Notwithstanding Subsections (1) through (4), after May 3, 1999, a credit union
             964      described in Subsection (2)(c) or (2)(d) may:
             965          (i) operate an office or branch that is operated by the credit union on May 3, 1999, but
             966      that is not located in a county that is in the credit union's [limited] field of membership as of
             967      May 3, 1999; and
             968          (ii) serve a member who is not in a credit union's [limited] field of membership as of
             969      May 3, 1999, if the member is a member of the credit union as of March 15, 1999.
             970          (b) Subsection (5)(a) does not authorize a credit union to:
             971          (i) establish a branch in a county that is not in the credit union's [limited] field of
             972      membership as of May 3, 1999, unless the branch meets the requirements under this title for
             973      establishing a branch; or
             974          (ii) for a credit union described in Subsection (2)(d), include in its [limited] field of
             975      membership an association that:
             976          (A) as of January 1, 1999, is not included in the credit union's [limited] field of
             977      membership; and
             978          (B) does not reside within the credit union's domicile-county.
             979          (6) A credit union shall amend its bylaws in accordance with Section 7-9-11 by no later
             980      than August 3, 1999, to comply with this section.
             981          (7) In addition to any requirement under this section, a credit union shall comply with
             982      any requirement under this title for the establishment, relocation, or change in the physical
             983      location of a main office or branch of a credit union.
             984          Section 19. Section 7-9-55 is enacted to read:
             985          7-9-55. Nonexempt credit unions.
             986          (1) (a) A credit union organized under this chapter is a nonexempt credit union under


             987      this section on the day on which:
             988          (i) on or after May 5, 2003 the credit union has a field of membership as evidenced by
             989      the bylaws of the credit union that includes all residents of two or more counties; and
             990          (ii) at least two of the counties described in Subsection (1)(a)(i) are counties of the first
             991      or second class as classified by Section 17-50-501 .
             992          (b) For purposes of Subsection (1)(a) only:
             993          (i) residents of a county that are added to the field of membership of a credit union as a
             994      result of a supervisory action under Chapter 2 or 19 are not considered to be within the field of
             995      membership of that credit union; and
             996          (ii) residents of a city of the third class or town that are added to the field of
             997      membership of a credit union in accordance with Section 7-9-52 are not considered to be
             998      within the field of membership of that credit union unless all residents of the county in which
             999      that city or town are located are included in the field of membership of the credit union.
             1000          (2) If a credit union becomes a nonexempt credit union under this section, the
             1001      nonexempt credit union is a nonexempt credit union:
             1002          (a) for as long as the nonexempt credit union is organized under this chapter; and
             1003          (b) notwithstanding whether after the day on which the nonexempt credit union
             1004      becomes a nonexempt credit union the nonexempt credit union meets the requirements of
             1005      Subsection (1)(a).
             1006          (3) Regardless of whether or not a credit union has located branches in two or more
             1007      counties in this state, a credit union organized under this chapter does not become a nonexempt
             1008      credit union if the field of membership of the credit union as evidenced by the bylaws of the
             1009      credit union does not meet the requirements of Subsection (1).
             1010          Section 20. Section 7-9-56 is enacted to read:
             1011          7-9-56. Competitive equity assessment.
             1012          (1) For purposes of this section, "competitive equity assessment" means an equitable
             1013      amount calculated for each fiscal year in accordance with a formula adopted by the Legislature
             1014      during the 2005 General Session after consideration of the formula recommended by the
             1015      Financial Institutions Task Force created in this act.
             1016          (2) (a) A credit union may elect to pay a competitive equity assessment by filing a
             1017      notice of election to pay a competitive equity assessment with:


             1018          (i) the commissioner; and
             1019          (ii) the State Tax Commission.
             1020          (b) A notice of election to pay a competitive equity assessment is not considered filed
             1021      until the later of the day on which the notice of election to pay a competitive equity assessment
             1022      is filed with:
             1023          (i) the commissioner; or
             1024          (ii) the State Tax Commission.
             1025          (c) If a credit union files a notice of election to pay a competitive equity assessment,
             1026      the credit union shall pay the competitive equity assessment in accordance with Subsection (5).
             1027          (d) A credit union may not file a notice of election to pay a competitive equity
             1028      assessment before May 2, 2005.
             1029          (3) A credit union may not revoke an election to pay a competitive equity assessment
             1030      after the day on which the credit union files a notice of election to pay a competitive equity
             1031      assessment in accordance with Subsection (2).
             1032          (4) (a) In accordance with this Subsection (4), for a credit union that files a notice of
             1033      election to pay a competitive equity assessment under this title, notwithstanding the other
             1034      provisions of this section, the commissioner may issue an order waiving the requirement that
             1035      the credit union pay the competitive equity assessment if:
             1036          (i) the credit union files a request for waiver; and
             1037          (ii) the credit union is subject to supervisory action under:
             1038          (A) Chapter 2, Possession of Depository Institution by Commissioner; or
             1039          (B) Chapter 19, Acquisition of Failing Depository Institutions or Holding Companies.
             1040          (b) (i) The commissioner may waive payment of the competitive equity assessment for
             1041      the period:
             1042          (A) beginning on the first day of the calendar quarter immediately following the day on
             1043      which the request for waiver is filed in accordance with Subsection (4)(a); and
             1044          (B) ending the last day of the next calendar quarter following the calendar quarter
             1045      described in Subsection (4)(b)(i)(A).
             1046          (ii) The commissioner may waive payment of the competitive equity assessment for the
             1047      two calendar quarters immediately following the period described in Subsection (4)(b)(i) if for
             1048      those calendar quarters the conditions of Subsection (4)(a) are met.


             1049          (c) The commissioner shall notify the State Tax Commission of the waiver in writing:
             1050          (i) by no later than the last day of the calendar quarter described in Subsection
             1051      (4)(b)(i)(A); and
             1052          (ii) specifying the two calendar quarters for which payment of the competitive equity
             1053      assessment is waived.
             1054          (d) (i) The following are confidential under Section 7-1-802 :
             1055          (A) a request for waiver filed in accordance with Subsection (4)(a);
             1056          (B) an order of the commissioner issued under this section waiving the payment of the
             1057      competitive equity assessment; and
             1058          (C) the notice described in Subsection (4)(c), except that the notice may be provided
             1059      the State Tax Commission in accordance with Subsection (4)(c).
             1060          (ii) (A) A person listed in Subsection 59-1-403 (1) may not divulge or make known in
             1061      any manner any information gained by that person from the notice described in Subsection
             1062      (4)(c).
             1063          (B) A person who violates this Subsection (4)(d)(ii) is subject to the penalties
             1064      described in Subsection 59-1-403 (5).
             1065          (5) (a) A credit union required to pay the competitive equity assessment under
             1066      Subsection (2) shall pay the competitive equity assessment for each fiscal year:
             1067          (i) to the State Tax Commission; and
             1068          (ii) beginning on the first day of the month immediately following the day on which the
             1069      credit union files the notice of election to pay the competitive equity assessment.
             1070          (b) This Subsection (5) shall be administered by the State Tax Commission in
             1071      accordance with the procedures of Title 59, Chapter 7, Part 5, Procedures and Administration.
             1072          (6) (a) In addition to any penalties imposed by the State Tax Commission in
             1073      accordance with Subsection (5), the commissioner may take supervisory action under Chapter
             1074      2, Possession of Depository Institution by Commissioner, against a credit union that is subject
             1075      to a penalty imposed by the State Tax Commission for failure to:
             1076          (i) file an annual return for the competitive equity assessment that is required to be
             1077      filed in accordance with Section 59-7-505 ; or
             1078          (ii) pay the competitive equity assessment owed for a fiscal year.
             1079          (b) The State Tax Commission shall notify the commissioner of any credit union that


             1080      has filed a notice of election to pay a competitive equity assessment that has failed to take an
             1081      action described in Subsection (6)(a).
             1082          Section 21. Section 7-9-57 is enacted to read:
             1083          7-9-57. Waiver of limitations on member-business loans.
             1084          (1) If a credit union, including a nonexempt credit union, files a notice of election to
             1085      pay a competitive equity assessment in accordance with Section 7-9-56 , the credit union is not
             1086      subject to the following for a member-business loan extended by the credit union on or after
             1087      the day on which the credit union files the notice of election to pay the competitive equity
             1088      assessment:
             1089          (a) Subsection 7-9-5 (12)(b);
             1090          (b) Subsection 7-9-20 (7)(b)(ii), except that the credit union may extend a
             1091      member-business loan to:
             1092          (i) a person that is a business entity, only if at least one individual having a controlling
             1093      interest in that business entity is a member of the credit union at the time the member-business
             1094      loan is extended; or
             1095          (ii) a person who is an individual, only if the individual is a member of the credit union
             1096      at the time the member-business loan is extended;
             1097          (c) Subsection 7-9-20 (7)(c); and
             1098          (d) Subsection 7-9-20 (8)(b)(ii).
             1099          (2) (a) Notwithstanding Subsection (1), a credit union is subject to the more restrictive
             1100      of the following in extending a member- business loan:
             1101          (i) any requirement or limitation imposed on the extension of credit by a bank
             1102      chartered under Chapter 3, Banks, including:
             1103          (A) Section 7-3-19 ; and
             1104          (B) any rule made by the commissioner in accordance with Section 7-3-19 ; or
             1105          (ii) any requirement or limitation imposed by the National Credit Union
             1106      Administration or successor federal deposit insurance agency on a state-chartered credit union
             1107      insured by the National Credit Union Administration or successor federal deposit insurance
             1108      agency.
             1109          (b) The commissioner shall make rules in accordance with Title 63, Chapter 46a, Utah
             1110      Administrative Rulemaking Act, that apply the requirements or limitations described in


             1111      Subsection (2)(a) to a member-business loan extended by a credit union that files a notice of
             1112      election to pay a competitive equity assessment.
             1113          (3) This section does not modify any requirement or limitation under this chapter on
             1114      the extension by a credit union of credit that is not a member-business loan.
             1115          Section 22. Section 7-9-58 is enacted to read:
             1116          7-9-58. Limitations on credit extended by nonexempt credit unions.
             1117          (1) Notwithstanding the other provisions of this chapter, beginning on May 5, 2003, a
             1118      nonexempt credit union may not:
             1119          (a) (i) extend a member-business loan;
             1120          (ii) renew a member-business loan that is extended before May 5, 2003; or
             1121          (iii) extend the maturity date or increase the amount of a member-business loan that is
             1122      extended before May 5, 2003;
             1123          (b) originate, participate in, or obtain any interest in a co-lending arrangement,
             1124      including a loan participation arrangement; or
             1125          (c) subject to Subsection (2), extend credit that is not a member-business loan if as a
             1126      result of the extension of credit the total credit that is not a member-business loan that the
             1127      nonexempt credit union has issued to that member exceeds at any one time $250,000.
             1128          (2) Notwithstanding Subsection (1)(c), a nonexempt credit union may extend credit in
             1129      an amount that exceeds the limits provided in Subsection (1)(c) to a member if:
             1130          (a) the excess portion of the credit described in Subsection (1)(c) is fully secured by the
             1131      member's share or deposit savings in the nonexempt credit union; or
             1132          (b) the credit is extended to a member of the nonexempt credit union:
             1133          (i) for the purpose of:
             1134          (A) paying amounts owed by the member to purchase a one- to four-family dwelling
             1135      that is the primary residence of that member; or
             1136          (B) refinancing the balance of amounts owed by the member for the purchase of a one-
             1137      to four-family dwelling that is the primary residence of that member; and
             1138          (ii) the credit extended under this Subsection (2)(b) is less than or equals $1,000,000.
             1139          (3) In accordance with Subsection 7-9-20 (7)(d), a credit union service organization
             1140      may not extend credit to a member of a nonexempt credit union holding an ownership interest
             1141      in the credit union service organization if it would be a violation of this section for the


             1142      nonexempt credit union to extend the credit to the member.
             1143          (4) This section may not prevent a nonexempt credit union from servicing a loan
             1144      extended before May 5, 2003.
             1145          Section 23. Section 59-1-403 is amended to read:
             1146           59-1-403. Confidentiality -- Exceptions -- Penalty -- Application to property tax.
             1147          (1) (a) Except as provided in this section, any of the following may not divulge or make
             1148      known in any manner any information gained by that person from any return filed with the
             1149      commission:
             1150          (i) a tax commissioner;
             1151          (ii) an agent, clerk, or other officer or employee of the commission; or
             1152          (iii) a representative, agent, clerk, or other officer or employee of any county, city, or
             1153      town.
             1154          (b) Except as provided in Subsection (1)(c), an official charged with the custody of a
             1155      return filed with the commission is not required to produce the return or evidence of anything
             1156      contained in the return in any action or proceeding in any court, except:
             1157          (i) in accordance with judicial order;
             1158          (ii) on behalf of the commission in any action or proceeding under:
             1159          (A) this title; or
             1160          (B) other law under which persons are required to file returns with the commission;
             1161          (iii) on behalf of the commission in any action or proceeding to which the commission
             1162      is a party; or
             1163          (iv) on behalf of any party to any action or proceeding under this title if the report or
             1164      facts shown by the return are directly involved in the action or proceeding.
             1165          (c) Notwithstanding Subsection (1)(b), a court may require the production of, and may
             1166      admit in evidence, any portion of a return or of the facts shown by the return, as are specifically
             1167      pertinent to the action or proceeding.
             1168          (2) This section does not prohibit:
             1169          (a) a person or that person's duly authorized representative from receiving a copy of
             1170      any return or report filed in connection with that person's own tax;
             1171          (b) the publication of statistics as long as the statistics are classified to prevent the
             1172      identification of particular reports or returns; and


             1173          (c) the inspection by the attorney general or other legal representative of the state of the
             1174      report or return of any taxpayer:
             1175          (i) who brings action to set aside or review a tax based on the report or return;
             1176          (ii) against whom an action or proceeding is contemplated or has been instituted under
             1177      this title; or
             1178          (iii) against whom the state has an unsatisfied money judgment.
             1179          (3) (a) Notwithstanding Subsection (1) and for purposes of administration, the
             1180      commission may by rule, made in accordance with Title 63, Chapter 46a, Utah Administrative
             1181      Rulemaking Act, provide for a reciprocal exchange of information with:
             1182          (i) the United States Internal Revenue Service; or
             1183          (ii) the revenue service of any other state.
             1184          (b) Notwithstanding Subsection (1) and for all taxes except individual income tax and
             1185      corporate franchise tax, the commission may by rule, made in accordance with Title 63,
             1186      Chapter 46a, Utah Administrative Rulemaking Act, share information gathered from returns
             1187      and other written statements with the federal government, any other state, any of the political
             1188      subdivisions of another state, or any political subdivision of this state, except as limited by
             1189      Sections 59-12-209 and 59-12-210 , if these political subdivisions or the federal government
             1190      grant substantially similar privileges to this state.
             1191          (c) Notwithstanding Subsection (1) and for all taxes except individual income tax and
             1192      corporate franchise tax, the commission may by rule, in accordance with Title 63, Chapter 46a,
             1193      Utah Administrative Rulemaking Act, provide for the issuance of information concerning the
             1194      identity and other information of taxpayers who have failed to file tax returns or to pay any tax
             1195      due.
             1196          (d) Notwithstanding Subsection (1), the commission shall provide to the Solid and
             1197      Hazardous Waste Control Board executive secretary, as defined in Section 19-6-102 , as
             1198      requested by the executive secretary, any records, returns, or other information filed with the
             1199      commission under Chapter 13, Motor and Special Fuel Tax Act, or Section 19-6-410.5
             1200      regarding the environmental assurance program participation fee.
             1201          (e) Notwithstanding Subsection (1), at the request of any person the commission shall
             1202      provide that person sales and purchase volume data reported to the commission on a report,
             1203      return, or other information filed with the commission under:


             1204          (i) Chapter 13, Part 2, Motor Fuel; or
             1205          (ii) Chapter 13, Part 4, Aviation Fuel.
             1206          (f) Notwithstanding Subsection (1), upon request from a tobacco product manufacturer,
             1207      as defined in Section 59-22-202 , the commission shall report to the manufacturer:
             1208          (i) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the
             1209      manufacturer and reported to the commission for the previous calendar year under Section
             1210      59-14-407 ; and
             1211          (ii) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the
             1212      manufacturer for which a tax refund was granted during the previous calendar year under
             1213      Section 59-14-401 and reported to the commission under Subsection 59-14-401 (1)(a)(v).
             1214          (g) Notwithstanding Subsection (1), the commission shall notify manufacturers,
             1215      distributors, wholesalers, and retail dealers of a tobacco product manufacturer that is prohibited
             1216      from selling cigarettes to consumers within the state under Subsection 59-14-210 (2).
             1217          (h) Notwithstanding Subsection (1), the commission may:
             1218          (i) provide to the Division of Consumer Protection within the Department of
             1219      Commerce and the attorney general data:
             1220          (A) reported to the commission under Section 59-14-212 ; or
             1221          (B) related to a violation under Section 59-14-211 ; and
             1222          (ii) upon request provide to any person data reported to the commission under
             1223      Subsections 59-14-212 (1)(a) through(c) and Subsection 59-14-212 (1)(g).
             1224          (i) Notwithstanding Subsection (1), the commission shall, at the request of a committee
             1225      of the Legislature, Office of the Legislative Fiscal Analyst, or Governor's Office of Planning
             1226      and Budget, provide to the committee or office the total amount of revenues collected by the
             1227      commission under Chapter 24, Radioactive Waste Tax Act, for the time period specified by the
             1228      committee or office.
             1229          (j) Notwithstanding Subsection (1), the commission shall at the request of the
             1230      Legislature provide to the Legislature the total amount of sales or uses exempt under
             1231      Subsection 59-12-104 (52) reported to the commission in accordance with Section 59-12-105 .
             1232          (k) Notwithstanding Subsection (1), the commission shall make the list required by
             1233      Subsection 59-14-408 (3) available for public inspection.
             1234          (l) Notwithstanding Subsection (1), the commission shall provide the notice to the


             1235      commissioner of the Department of Financial Institutions required by Subsection 7-9-56 (6).
             1236          (4) (a) Reports and returns shall be preserved for at least three years.
             1237          (b) After the three-year period provided in Subsection (4)(a) the commission may
             1238      destroy a report or return.
             1239          (5) (a) Any person who violates this section is guilty of a class A misdemeanor.
             1240          (b) If the person described in Subsection (5)(a) is an officer or employee of the state,
             1241      the person shall be dismissed from office and be disqualified from holding public office in this
             1242      state for a period of five years thereafter.
             1243          (6) This part does not apply to the property tax.
             1244          Section 24. Section 59-7-101 is amended to read:
             1245           59-7-101. Definitions.
             1246          As used in this chapter:
             1247          (1) "Adjusted income" means unadjusted income as modified by Sections 59-7-105
             1248      and 59-7-106 .
             1249          (2) (a) "Affiliated group" means one or more chains of corporations that are connected
             1250      through stock ownership with a common parent corporation that meet the following
             1251      requirements:
             1252          (i) at least 80% of the stock of each of the corporations in the group, excluding the
             1253      common parent corporation, is owned by one or more of the other corporations in the group;
             1254      and
             1255          (ii) the common parent directly owns at least 80% of the stock of at least one of the
             1256      corporations in the group.
             1257          (b) "Affiliated group" does not include corporations that are qualified to do business
             1258      but are not otherwise doing business in this state.
             1259          (c) For purposes of this Subsection (2), "stock" does not include nonvoting stock which
             1260      is limited and preferred as to dividends.
             1261          (3) "Apportionable income" means adjusted income less nonbusiness income net of
             1262      related expenses, to the extent included in adjusted income.
             1263          (4) "Apportioned income" means apportionable income multiplied by the
             1264      apportionment fraction as determined in Section 59-7-311 .
             1265          (5) "Business income" means income as defined in Section 59-7-302 .


             1266          (6) "Corporate return" or "return" includes a combined report.
             1267          (7) (a) "Common ownership" means the direct or indirect control or ownership of more
             1268      than 50% of the outstanding voting stock of:
             1269          (i) a parent-subsidiary controlled group as defined in Section 1563, Internal Revenue
             1270      Code, except that 50% shall be substituted for 80%;
             1271          (ii) a brother-sister controlled group as defined in Section 1563, Internal Revenue
             1272      Code, except that 50% shall be substituted for 80%; or
             1273          (iii) three or more corporations each of which is a member of a group of corporations
             1274      described in Subsection (2)(a)(i) or (2)(a)(ii), and one of which is:
             1275          (A) a common parent corporation included in a group of corporations described in
             1276      Subsection (2)(a)(i); and
             1277          (B) included in a group of corporations described in Subsection (2)(a)(ii).
             1278          (b) Ownership of outstanding voting stock shall be determined by Section 1563,
             1279      Internal Revenue Code.
             1280          (8) "Corporation" includes:
             1281          (a) entities defined as corporations under Sections 7701(a) and 7704, Internal Revenue
             1282      Code; and
             1283          (b) other organizations that are taxed as corporations for federal income tax purposes
             1284      under the Internal Revenue Code.
             1285          (9) "Dividend" means any distribution, including money or other type of property,
             1286      made by a corporation to its shareholders out of its earnings or profits accumulated after
             1287      December 31, 1930.
             1288          (10) (a) "Doing business" includes any transaction in the course of its business by a
             1289      domestic corporation, or by a foreign corporation qualified to do or doing intrastate business in
             1290      this state.
             1291          (b) Except as provided in Subsection 59-7-102 (2), "doing business" includes:
             1292          (i) the right to do business through incorporation or qualification;
             1293          (ii) the owning, renting, or leasing of real or personal property within this state; and
             1294          (iii) the participation in joint ventures, working and operating agreements, the
             1295      performance of which takes place in this state.
             1296          (11) "Domestic corporation" means a corporation that is incorporated or organized


             1297      under the laws of this state.
             1298          (12) (a) "Farmers' cooperative" means an association, corporation, or other
             1299      organization that is:
             1300          (i) (A) an association, corporation, or other organization of:
             1301          (I) farmers; or
             1302          (II) fruit growers; or
             1303          (B) an association, corporation, or other organization that is similar to an association,
             1304      corporation, or organization described in Subsection (12)(a)(i)(A); and
             1305          (ii) organized and operated on a cooperative basis to:
             1306          (A) (I) market the products of members of the cooperative or the products of other
             1307      producers; and
             1308          (II) return to the members of the cooperative or other producers the proceeds of sales
             1309      less necessary marketing expenses on the basis of the quantity of the products of a member or
             1310      producer or the value of the products of a member or producer; or
             1311          (B) (I) purchase supplies and equipment for the use of members of the cooperative or
             1312      other persons; and
             1313          (II) turn over the supplies and equipment described in Subsection (12)(a)(ii)(B)(I) at
             1314      actual costs plus necessary expenses to the members of the cooperative or other persons.
             1315          (b) (i) Subject to Subsection (12)(b)(ii), for purposes of this Subsection (12), the
             1316      commission by rule, made in accordance with Title 63, Chapter 46a, Utah Administrative
             1317      Rulemaking Act, shall define:
             1318          (A) the terms:
             1319          (I) "member"; and
             1320          (II) "producer"; and
             1321          (B) what constitutes an association, corporation, or other organization that is similar to
             1322      an association, corporation, or organization described in Subsection (12)(a)(i)(A).
             1323          (ii) The rules made under this Subsection (12)(b) shall be consistent with the filing
             1324      requirements under federal law for a farmers' cooperative.
             1325          (13) "Foreign corporation" means a corporation that is not incorporated or organized
             1326      under the laws of this state.
             1327          (14) (a) "Foreign operating company" means a corporation that:


             1328          (i) is incorporated in the United States; and
             1329          (ii) 80% or more of whose business activity, as determined under Section 59-7-401 , is
             1330      conducted outside the United States.
             1331          (b) "Foreign operating company" does not include a corporation that qualifies for the
             1332      Puerto Rico and Possession Tax Credit as provided in Section 936, Internal Revenue Code.
             1333          (15) "Foreign sales corporation" means a corporation as defined in Section 922,
             1334      Internal Revenue Code.
             1335          (16) "Income" includes losses.
             1336          (17) "Internal Revenue Code" means Title 26 of the United States Code as effective
             1337      during the year in which Utah taxable income is determined.
             1338          (18) "Nonbusiness income" means income as defined in Section 59-7-302 .
             1339          (19) "Nonresident shareholder" means any shareholder of an S corporation who on the
             1340      last day of the taxable year of the S corporation, is:
             1341          (a) an individual not domiciled in Utah; or
             1342          (b) a nonresident trust or nonresident estate, as defined in Section 59-10-103 .
             1343          (20) "Related expenses" means:
             1344          (a) expenses directly attributable to nonbusiness income; and
             1345          (b) the portion of interest or other expense indirectly attributable to both nonbusiness
             1346      and business income which bears the same ratio to the aggregate amount of such interest or
             1347      other expense, determined without regard to this Subsection (20), as the average amount of the
             1348      asset producing the nonbusiness income bears to the average amount of all assets of the
             1349      taxpayer within the taxable year.
             1350          (21) "Resident shareholder" means any shareholder of an S corporation who is not a
             1351      nonresident shareholder.
             1352          (22) "S corporation" means a small business corporation as defined in Section 1361,
             1353      Internal Revenue Code.
             1354          (23) "Safe harbor lease" means a lease that qualified as a safe harbor lease under
             1355      Section 168, Internal Revenue Code.
             1356          (24) "State of the United States" includes any of the 50 states or the District of
             1357      Columbia and "United States" includes the 50 states and the District of Columbia.
             1358          (25) (a) "Taxable year" means the calendar year or the fiscal year ending during such


             1359      calendar year upon the basis of which the adjusted income is computed.
             1360          (b) In the case of a return made for a fractional part of a year under this chapter or
             1361      under rules prescribed by the commission, "taxable year" includes the period for which such
             1362      return is made.
             1363          (26) "Taxpayer" means any corporation subject to the tax imposed by this chapter.
             1364          (27) "Threshold level of business activity" means business activity in the United States
             1365      equal to or greater than 20% of the corporation's total business activity as determined under
             1366      Section 59-7-401 .
             1367          (28) Except as provided in Section 59-7-102 , "unadjusted income" means federal
             1368      taxable income as determined on a separate return basis before intercompany eliminations as
             1369      determined by the Internal Revenue Code, before the net operating loss deduction and special
             1370      deductions for dividends received.
             1371          (29) (a) "Unitary group" means a group of corporations that:
             1372          (i) are related through common ownership; and
             1373          (ii) by a preponderance of the evidence as determined by a court of competent
             1374      jurisdiction or the commission, are economically interdependent with one another as
             1375      demonstrated by the following factors:
             1376          (A) centralized management;
             1377          (B) functional integration;
             1378          (C) economies of scale.
             1379          (b) "Unitary group" does not include S corporations.
             1380          (30) "Utah net loss" means the current year Utah taxable income before Utah net loss
             1381      deduction, if determined to be less than zero.
             1382          (31) "Utah net loss deduction" means the amount of Utah net losses from other taxable
             1383      years that may be carried back or carried forward to the current taxable year in accordance with
             1384      Section 59-7-110 .
             1385          (32) (a) "Utah taxable income" means Utah taxable income before net loss deduction
             1386      less Utah net loss deduction.
             1387          (b) "Utah taxable income" includes income from tangible or intangible property located
             1388      or having situs in this state, regardless of whether carried on in intrastate, interstate, or foreign
             1389      commerce.


             1390          (33) "Utah taxable income before net loss deduction" means apportioned income plus
             1391      nonbusiness income allocable to Utah net of related expenses.
             1392          (34) (a) "Water's edge combined report" means a report combining the income and
             1393      activities of:
             1394          (i) all members of a unitary group that are:
             1395          (A) corporations organized or incorporated in the United States, including those
             1396      corporations qualifying for the Puerto Rico and Possession Tax Credit as provided in Section
             1397      936, Internal Revenue Code, in accordance with Subsection (34)(b); and
             1398          (B) corporations organized or incorporated outside of the United States meeting the
             1399      threshold level of business activity; and
             1400          (ii) an affiliated group electing to file a water's edge combined report under Subsection
             1401      59-7-402 (2).
             1402          (b) There is a rebuttable presumption that a corporation which qualifies for the Puerto
             1403      Rico and Possession Tax Credit provided in Section 936, Internal Revenue Code, is part of a
             1404      unitary group.
             1405          (35) "Worldwide combined report" means the combination of the income and activities
             1406      of all members of a unitary group irrespective of the country in which the corporations are
             1407      incorporated or conduct business activity.
             1408          Section 25. Section 59-7-102 is amended to read:
             1409           59-7-102. Exemptions.
             1410          (1) Except as provided in this section, the following are exempt from this chapter:
             1411          (a) an organization exempt under Section 501, Internal Revenue Code;
             1412          (b) an organization exempt under Section 528, Internal Revenue Code;
             1413          (c) an insurance company that is otherwise taxed on the insurance company's premiums
             1414      under Chapter 9, Taxation of Admitted Insurers;
             1415          (d) a building authority as defined in Section 17A-3-902 ;
             1416          (e) a farmers' cooperative; or
             1417          (f) a public agency, as defined in Section 11-13-103 , with respect to or as a result of an
             1418      ownership interest in:
             1419          (i) a project, as defined in Section 11-13-103 ; or
             1420          (ii) facilities providing additional project capacity, as defined in Section 11-13-103 .


             1421          (2) Notwithstanding any other provision in this chapter or Chapter 8, Gross Receipts
             1422      Tax on Certain Corporations Not Required to Pay Corporate Franchise or Income Tax Act, a
             1423      person not otherwise subject to the tax imposed by this chapter or Chapter 8 is not subject to
             1424      the tax imposed by Sections 59-7-104 , 59-7-201 , 59-7-701 , and 59-8-104 , because of:
             1425          (a) that person's ownership of tangible personal property located at the premises of a
             1426      printer's facility in this state with which the person has contracted for printing; or
             1427          (b) the activities of the person's employees or agents who are:
             1428          (i) located solely at the premises of a printer's facility; and
             1429          (ii) performing services:
             1430          (A) related to:
             1431          (I) quality control;
             1432          (II) distribution; or
             1433          (III) printing services; and
             1434          (B) performed by the printer's facility in this state with which the person has contracted
             1435      for printing.
             1436          (3) Notwithstanding Subsection (1), an organization, company, authority, farmers'
             1437      cooperative, or public agency exempt from this chapter under Subsection (1) is subject to Part
             1438      8, Unrelated Business Income, to the extent provided in Part 8.
             1439          (4) Notwithstanding Subsection (1)(b), to the extent the income of an organization
             1440      described in Subsection (1)(b) is taxable for federal tax purposes under Section 528, Internal
             1441      Revenue Code, the organization's income is also taxable under this chapter.
             1442          (5) (a) Notwithstanding Subsection (1)(a), a nonexempt credit union, as defined in
             1443      Section 7-9-3 , is not exempt from this chapter beginning on the date specified by the
             1444      Legislature in the 2005 General Session if the Legislature affirmatively states that a nonexempt
             1445      credit union is subject to Title 59, Chapter 7, Corporate Franchise and Income Taxes.
             1446          (b) Notwithstanding Section 59-7-101 , the unadjusted income of a nonexempt credit
             1447      union that is subject to this chapter in accordance with Subsection (5)(a) is an amount equal to
             1448      the federal taxable income the nonexempt credit union would have if the nonexempt credit
             1449      union were subject to a federal income tax:
             1450          (i) determined on a separate return basis before intercompany eliminations as
             1451      determined by the Internal Revenue Code; and


             1452          (ii) before:
             1453          (A) the net operating loss deduction; and
             1454          (B) special deductions for dividends received.
             1455          Section 26. Repealer.
             1456          This act repeals:
             1457          Section 7-9-54, Electing to terminate grandfathering.
             1458          Section 27. Financial Institutions Task Force.
             1459          (1) There is created the Financial Institutions Task Force consisting of the following 12
             1460      members:
             1461          (a) five members of the Senate appointed by the president of the Senate, no more than
             1462      four of whom may be from the same political party; and
             1463          (b) seven members of the House of Representatives appointed by the speaker of the
             1464      House of Representatives, no more than five of whom may be from the same political party.
             1465          (2) (a) The president of the Senate shall designate a member of the Senate appointed
             1466      under Subsection (1)(a) as a cochair of the task force.
             1467          (b) The speaker of the House of Representatives shall designate a member of the House
             1468      of Representatives appointed under Subsection (1)(b) as a cochair of the task force.
             1469          (3) In conducting its business, the task force shall comply with the rules of legislative
             1470      interim committees.
             1471          (4) Salaries and expenses of the members of the task force shall be paid in accordance
             1472      with Section 36-2-2 and Legislative Joint Rule 15.03.
             1473          (5) The Office of Legislative Research and General Counsel shall provide staff support
             1474      to the task force.
             1475          (6) The task force shall study:
             1476          (a) the structural differences between credit unions and other financial institutions;
             1477          (b) whether to clarify the language defining the appropriate purposes and operations of
             1478      credit unions chartered in this state including what are the appropriate eligibility standards for
             1479      members of a credit union that should be imposed by statute;
             1480          (c) what should be the appropriate field of membership requirements for a credit union;
             1481          (d) the policies that should govern all questions applicable to taxing or not taxing
             1482      nonexempt credit unions;


             1483          (e) the policies underlying whether or not to tax or assess other fees on banks and
             1484      nonexempt credit unions;
             1485          (f) (i) whether or not any credit union should be allowed to pay a competitive equity
             1486      assessment;
             1487          (ii) if a credit union is allowed to pay a competitive equity assessment, which credit
             1488      unions should be allowed to pay a competitive equity assessment; and
             1489          (iii) how any competitive equity assessment to be paid by a credit union should be
             1490      calculated including whether required reserves should be subtracted from any of a credit
             1491      union's annual cash retained earnings of a credit union that may be subject to a competitive
             1492      equity assessment;
             1493          (g) if a competitive equity assessment is allowed to be paid by a credit union or if state
             1494      corporate franchise and income taxes are imposed on nonexempt credit unions, the benefits or
             1495      restrictions that should be conditioned on the payment of the competitive equity assessment or
             1496      state corporate franchise and income taxes including:
             1497          (i) whether or not, to the extent that a bank could extend the credit or to the extent that
             1498      the extension of credit is not inconsistent with the requirements of National Credit Union
             1499      Administration, a credit union that pays a competitive equity assessment should be exempted
             1500      from certain restrictions on extending member-business loans such as the restrictions under:
             1501          (A) Subsection 7-9-5 (12)(b);
             1502          (B) Subsection 7-9-20 (7)(b)(ii), except that certain membership requirements may
             1503      always need to be required for member-business loans;
             1504          (C) Subsection 7-9-20 (7)(c); and
             1505          (D) Subsection 7-9-20 (8)(b)(ii);
             1506          (ii) whether or not without payment of a competitive equity assessment a nonexempt
             1507      credit union should be able to establish a branch that is to be located outside of the county in
             1508      which the nonexempt credit union has the greatest number of branches;
             1509          (iii) whether or not, except in supervisory actions, a nonexempt credit union could
             1510      merge with another credit union without payment of the competitive equity assessment; and
             1511          (iv) whether or not limitations related to the grandfathering under Section 7-9-53
             1512      should be modified or removed;
             1513          (h) whether the judicial review process of decisions of the Commissioner of Financial


             1514      Institutions should be modified;
             1515          (i) (i) the powers and duties of the Commissioner of Financial Institutions to regulate
             1516      the activities of credit unions and banks; and
             1517          (ii) whether additional powers or duties should be given to the Commissioner of
             1518      Financial Institutions;
             1519          (j) the effect of a credit union chartered in this state converting to a federal credit union
             1520      charter including any:
             1521          (i) loss of sales and uses taxes;
             1522          (ii) loss of fees paid to the Department of Financial Institutions; and
             1523          (iii) loss of taxes and fees paid to political subdivisions of the state;
             1524          (k) the methods by which financial institutions in this state may obtain capital;
             1525          (l) the appropriate lending practices of credit unions including:
             1526          (i) extension of member-business loans;
             1527          (ii) extension of credit that does not constitute a member-business loan; and
             1528          (iii) participation in co-lending arrangements including loan participation
             1529      arrangements; and
             1530          (m) any other issues related to financial institutions and credit unions that the task
             1531      force determines to be appropriate.
             1532          (7) The task force shall:
             1533          (a) make an interim report to the Business and Labor Interim Committee by no later
             1534      than November 30, 2003; and
             1535          (b) make a final report to the Business and Labor Interim Committee, including any
             1536      proposed legislation, by no later than November 30, 2004.
             1537          Section 28. Intent language.
             1538          In passing this legislation, it is the intent of the Legislature that:
             1539          (1) the restrictions in Section 7-1-708 and Title 7, Chapter 9, Utah Credit Union Act, in
             1540      effect on May 5, 2003, including restrictions on fields of membership, branching, mergers, and
             1541      other restrictions on activities of credit unions and credit union service organizations, should
             1542      remain in effect until such time as the Legislature is able to study whether or not to impose
             1543      state corporate franchise and income taxes, a competitive equity assessment, or any similar
             1544      charge on credit unions the size and activities of which require that measures be taken to ensure


             1545      competitive equity within Utah's financial market; and
             1546          (2) regardless of whether the Legislature adopts a formula for the competitive equity
             1547      assessment or imposes state corporate franchise and income taxes on a nonexempt credit union
             1548      in the 2005 General Session as provided in this act, this act may not be interpreted to constitute
             1549      an action by the Legislature to facilitate credit unions expanding membership or engaging in
             1550      activities that are not permitted by Section 7-1-708 or Title 7, Chapter 9, Utah Credit Union
             1551      Act, in effect on May 5, 2003.
             1552          Section 29. Appropriation.
             1553          (1) There is appropriated from the General Fund for fiscal year 2002-03, a one-time
             1554      appropriation of:
             1555          (a) $6,000 to the Senate to pay for the compensation and expenses of senators on the
             1556      task force;
             1557          (b) $8,500 to the House of Representatives to pay for the compensation and expenses
             1558      of representatives on the task force; and
             1559          (c) $30,000 to the Office of Legislative Research and General Counsel to pay for
             1560      staffing the task force.
             1561          (2) There is appropriated from the General Fund for fiscal year 2003-04, a one-time
             1562      appropriation of:
             1563          (a) $6,000 to the Senate to pay for compensation and expenses of senators on the task
             1564      force;
             1565          (b) $8,500 to the House of Representatives to pay for the compensation and expenses
             1566      of representatives on the task force; and
             1567          (c) $30,000 to the Office of Legislative Research and General Counsel to pay for
             1568      staffing the task force.
             1569          Section 30. Contingent effective and repeal dates.
             1570          This act takes effect May 5, 2003 except that:
             1571          (1) (a) (i) Section 7-9-56 does not take effect on May 5, 2003;
             1572          (ii) Section 7-9-57 does not take effect on May 5, 2003;
             1573          (iii) the amendments in this act to Section 59-1-403 do not take effect on May 5, 2003;
             1574      and
             1575          (b) if the Legislature adopts a formula to calculate the competitive equity assessment in


             1576      the 2005 General Session as provided in Section 7-9-56 , then on May 2, 2005 the following
             1577      changes take effect:
             1578          (i) delete Subsection 7-1-708 (9) and insert:
             1579          "(9)(a) Notwithstanding the other provisions of this section, an application of a
             1580      nonexempt credit union to establish a branch that is to be located outside of the county in
             1581      which the nonexempt credit union has the greatest number of branches may not be approved
             1582      unless prior to the approval of the application the nonexempt credit union files a notice of
             1583      election to pay a competitive equity assessment as provided in Section 7-9-56 .
             1584          (b) For purposes of this Subsection (9), a nonexempt credit union is considered to be
             1585      establishing a branch if the nonexempt credit union establishes:
             1586          (i) notwithstanding Section 7-1-103 , a loan production office; or
             1587          (ii) any other office or facility that:
             1588          (A) is owned or operated by:
             1589          (I) the nonexempt credit union; or
             1590          (II) a credit union service organization in which the nonexempt credit union holds an
             1591      ownership interest;
             1592          (B) is open to the public; and
             1593          (C) provides any product or service of the nonexempt credit union to a member of the
             1594      nonexempt credit union.
             1595          (c) This section may not be interpreted as authorizing a loan production office to
             1596      engage in any activity that a loan production office is not authorized to engage in under Section
             1597      7-1-715 ."
             1598          (ii) (A) in Subsection 7-9-3 (6) bracket "or 7-9-53 "; and
             1599          (B) bracket Subsection 7-9-3 (10) defining "Service center" and renumber the
             1600      remaining subsections of Section 7-9-3 accordingly;
             1601          (iii) in Subsection 7-9-5 (12)(b) after "(b)" insert "except as provided in Section
             1602      7-9-57 ,";
             1603          (iv) in Subsection 7-9-12 (3) bracket "or 7-9-53" ;
             1604          (v) amend Subsection 7-9-20 (7)(a)(i) to read: "(i) except as provided in: (A)
             1605      Subsection (8); or (B) Section 7-9-57 ; and";
             1606          (vi) (A) bracket:


             1607          (I) all of Subsection 7-9-39 (4);
             1608          (II) all of Subsection 7-9-39 (5)(b); and
             1609          (III) all of Subsection 7-9-39 (6);
             1610          (B) renumber Subsection 7-9-39 (5)(a) as Subsection 7-9-39 (4); and
             1611          (C) insert the following: "(5) Except as provided in Section 7-9-39.5 , the commissioner
             1612      may not approve a merger plan under which a nonexempt credit union merges with another
             1613      credit union before the day on which the nonexempt credit union files a notice of election to
             1614      pay the competitive equity assessment as provided in Section 7-9-56."
             1615          (vii) in Section 7-9-39.5 , bracket "If a credit union is merged" and insert
             1616      "Notwithstanding Subsection 7-9-39 (5), a nonexempt credit union may merge" and after "19"
             1617      delete the remainder of the section except for the ".";
             1618          (viii) (A) in Subsection 7-9-51 (1) bracket "Except as provided in Subsection (3) or (5),
             1619      the" and insert "The";
             1620          (B) in Subsection 7-9-51 (1)(c) bracket "a single county" and insert "one or more
             1621      counties"; and
             1622          (C) bracket Subsections 7-9-51 (3), (4), and (5);
             1623          (ix) (A) bracket Subsection 7-9-52 (5);
             1624          (B) renumber remaining subsections accordingly; and
             1625          (C) change all cross references to Subsection 7-9-52 (6) in this bill to Subsection
             1626      7-9-52 (5);
             1627          (x) Section 7-9-53 is repealed;
             1628          (xi) Section 7-9-56 as enacted by this act takes effect;
             1629          (xii) Section 7-9-57 as enacted by this act takes effect; and
             1630          (xiii) the amendments in this act to Section 59-1-403 take effect.
             1631          (2) (a) The amendments in this act to the following do not take effect on May 5, 2003:
             1632          (i) Section 7-9-34 ;
             1633          (ii) Section 59-7-101 ; and
             1634          (iii) Section 59-7-102 ; and
             1635          (b) if the Legislature affirmatively states in the 2005 General Session that state
             1636      corporate franchise and income taxes are to be imposed on nonexempt credit unions, the
             1637      amendments in this act to the following take effect on May 2, 2005:


             1638          (i) Section 7-9-34 ;
             1639          (ii) Section 59-7-101 ; and
             1640          (iii) Section 59-7-102 .
             1641          (3) If the Legislature affirmatively repeals Section 7-9-58 in the 2005 General Session,
             1642      Section 7-9-58 is repealed effective May 2, 2005.
             1643          Section 31. Repeal date for task force.
             1644          The uncodified material that creates the Financial Institutions Task Force is repealed
             1645      November 30, 2004.


[Bill Documents][Bills Directory]