First Substitute S.B. 250

Senator John L. Valentine proposes the following substitute bill:

1 CLASS ACTIONS RELATING TO TAXES OR FEES
2 ADMINISTERED BY THE STATE TAX
3 COMMISSION
4 2004 GENERAL SESSION
5 STATE OF UTAH
6 Sponsor: John L. Valentine
7
8 LONG TITLE
9 General Description:
10 This bill addresses class actions that relate to a tax or fee administered by the State Tax
11 Commission.
12 Highlighted Provisions:
13 This bill:
14 . provides a definition;
15 . provides limitations on maintaining a class action that relates to a tax or fee
16 administered by the State Tax Commission;
17 . establishes requirements for a person to be included as a member of a class in a
18 class action;
19 . provides limitations on the amount that may be recovered by members of a class;
20 and
21 . provides a severability clause.
22 Monies Appropriated in this Bill:
23 None
24 Other Special Clauses:
25 This bill provides an effective date.

26 Utah Code Sections Affected:
27 ENACTS:
28 59-1-304, Utah Code Annotated 1953
29
30 Be it enacted by the Legislature of the state of Utah:
31 Section 1. Section 59-1-304 is enacted to read:
32 59-1-304. Definition -- Limitations on maintaining a class action that relates to a
33 tax or fee -- Requirements for a person to be included as a member of a class in a class
34 action -- Limitations on recovery by members of a class -- Severability.
35 (1) As used in this section, "tax or fee" means a tax or fee administered by the
36 commission.
37 (2) A class action that relates to a tax or fee may not be maintained in any court if a
38 claim sought by a representative party seeking to maintain the class action arises as a result of:
39 (a) a person collecting a tax or fee from the representative party if the representative
40 party is not required by law to pay the tax or fee; or
41 (b) any of the following that requires a change in the manner in which a tax or fee is
42 required to be collected or paid:
43 (i) an administrative rule made by the commission;
44 (ii) a private letter ruling issued by the commission; or
45 (iii) a decision issued by:
46 (A) the commission; or
47 (B) a court of competent jurisdiction.
48 (3) A person may be included as a member of a class in a class action relating to a tax
49 or fee only if:
50 (a) the person exhausts all administrative remedies with the commission; and
51 (b) requests in writing to be included as a member of the class.
52 (4) Subject to Subsection (5), in a class action against the state or its political
53 subdivisions in which members of the class are awarded a refund or credit of a tax or fee by a
54 court of competent jurisdiction, the total amount that may be recovered by members of the
55 class may not exceed the difference between:
56 (a) the sum of:

57 (i) the amount of the refund or credit awarded to members of the class; and
58 (ii) interest as provided in Section 59-1-402 ; and
59 (b) if awarded in accordance with Subsection (5), the sum of:
60 (i) reasonable costs; and
61 (ii) reasonable attorneys' fees.
62 (5) (a) For purposes of Subsection (4), at the discretion of the court, the court may
63 award:
64 (i) reasonable costs as determined by the court; and
65 (ii) reasonable attorneys' fees determined under Subsection (5)(b).
66 (b) Reasonable attorneys' fees awarded in a class action may not exceed a reasonable
67 hourly rate for work actually performed:
68 (i) as determined by the court; and
69 (ii) taking into account all facts and circumstances that the court considers reasonable.
70 (6) If any provision of this section, or the application of any provision of this section to
71 any person or circumstance is held unconstitutional or invalid by a court of competent
72 jurisdiction, the remainder of the section shall be given effect without the invalid provision or
73 application.
74 Section 2. Effective date.
75 (1) Subject to Subsection (2), if approved by two-thirds of all the members elected to
76 each house, this bill takes effect upon approval by the governor, or the day following the
77 constitutional time limit of Utah Constitution Article VII, Section 8, without the governor's
78 signature, or in the case of a veto, the date of veto override.
79 (2) This bill applies to an action for which a court of competent jurisdiction has not
80 issued an order as of the effective date of this bill certifying the action as a class action in
81 accordance with Utah Rules of Civil Procedure, Rule 23.