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MINUTES OF THE HOUSE
BUSINESS AND LABOR
STANDING COMMITTEE
Room 405 State Capitol
February 24, 2004


Members Present:    Rep. Katherine M. Bryson, Chair
            Rep. Michael Morley, Vice Chair            
            Rep. J. Stuart Adams
            Rep. Jackie Biskupski
            Rep. Craig W. Buttars
            Rep. David Clark
            Rep. Stephen D. Clark
            Rep. Carl W. Duckworth
            Rep. Jim Dunnigan
            Rep. Ben C. Ferry
            Rep. Neil A Hansen
            Rep. Todd E. Kiser
            Rep. R. Curt Webb
    
Staff Present:    Mark Steinagel, Policy Analyst            
            Linda Error, Committee Secretary

Note:        List of visitors and a copy of handouts are filed with committee minutes .


Rep. Bryson called the meeting to order at 7:05 a.m.

MOTION:    Rep. Hansen moved to approve the minutes of the February 19, 2004 meeting. The motion passed unanimously, with Rep. Biskupski, Rep. Buttars, Rep. S. Clark, Rep. Duckworth, and Rep. Ferry absent for the vote.

H.B. 148    Optometry Amendments (Rep. B. Last)
    
Rep. Last explained the bill, assisted by Jay Magure, 1-800-Contacts Inc.

Spoke to the bill:    Dale Woodfield, optometrist, Ogden, Utah

MOTION:    Rep. Adams moved to pass the bill out favorably. The motion passed unanimously, with Rep. S. Clark, Rep. Duckworth, and Rep. Ferry absent for the vote.

MOTION:    Rep. Morley moved that H.B. 148 be placed on the Consent Calendar. The motion failed, with Rep. Ferry voting in opposition and Rep. Duckworth absent for the vote.




1st Sub. S.B. 106    Dishonored Checks - Motor Vehicle Repair Facilities (Sen. D. C. Buttars)

MOTION:    Rep. D. Clark moved to delete in title and body 1st Substitute S.B. 106 and replace it with 2nd Substitute S.B. 106. The motion passed unanimously, with Rep. Duckworth and Rep. Ferry absent for the vote.

Sen. Buttars explained the bill.

Spoke for the bill:    Wayne Jones, Executive Director, Independent Auto Dealers Association             
MOTION:    Rep. Dunnigan moved to amend the bill as follows:

1.    Page 2, Lines 48 through 50 :    

             48          (2) A holder of a check that has been dishonored may take possession of a motor
             49      vehicle to recover the amounts owed under Subsection 7-15-1 (7) if:
             50          (a) the check amount equals or exceeds
[[   $250   ]]        $1000       ;


SUBSTITUTE
MOTION:    Rep. Kiser moved to amend the bill as follows:

1.    Page 2, Lines 48 through 50 :    

             48          (2) A holder of a check that has been dishonored may take possession of a motor
             49      vehicle to recover the amounts owed under Subsection 7-15-1 (7) if:
             50          (a) the check amount equals or exceeds
[[   $250   ]]        $750       ;


After committee discussion, Rep. Kiser withdrew the motion.

SUBSTITUTE
MOTION:    Rep. Morley moved to amend the bill as follows:

1.    Page 2, Lines 48 through 50 :    

             48          (2) A holder of a check that has been dishonored may take possession of a motor
             49      vehicle to recover the amounts owed under Subsection 7-15-1 (7) if:
             50          (a) the check amount equals or exceeds
[[   $250   ]]        $500       ;


The substitute motion to amend passed unanimously, with Rep. Duckworth absent for the vote.


MOTION:    Rep. Dunnigan called previous question. The motion passed unanimously, with Rep. Duckworth absent for the vote.

MOTION:    Rep. Buttars moved to pass the bill out favorably as amended. The motion passed, with Rep. Ferry and Rep. Hansen voting in opposition and Rep. Duckworth absent for the vote.

H.B. 279    Counterfeit Tobacco Products (Rep. E. Hutchings)

MOTION:    Rep. Buttars moved to amend the bill as follows:

1.    Page 3, Lines 59 through 62 :    

             59      that
[[   :

             60          (a)  
]]
evidences payment of the tax on cigarettes required by Section 59-14-204
[[   ; or

             61          (b) indicates that the cigarettes are intended for a sale or distribution in Utah that is
             62      exempt from state tax under Subsection 59-14-204.5 (1)  
]]
.

2.    Page 9, Lines 266 through 268 :    

             266          (1) A person who ships unstamped cigarette packages into the state, other than to a
             267      licensed manufacturer, importer, distributor, or retailer
  who is authorized to affix stamps       , shall first file with the commission a

             268      notice of shipment.

3.    Page 10, Lines 287 through 289 :    

             287          (2)
[[   Notwithstanding   ]]        In addition to       any other provision of law, the sale or possession for sale of

             288      counterfeit cigarettes, as they are defined in Section 59-14-102 , by a manufacturer, importer,
             289      distributor, or retailer shall result:

4.    Page 10, Lines 290 through 291 :    

             290          (a) in the seizure by the commission or law enforcement agency of the
[[   manufacturer   ]]        manufacturer's       ,

             291      importer's, distributor's, or retailer's:


5.    Page 11, Lines 326 through 327 :    

             326          (4) (a) The sale or possession for sale of counterfeit cigarettes by a manufacturer,
             327      importer, distributor, or retailer is punishable
  by a court of law       as follows:


The motion to amend passed unanimously, with Rep. Duckworth absent for the vote.

MOTION:    Rep. Dunnigan moved to pass the bill out favorably as amended. The motion passed unanimously, with Rep. Duckworth absent for the vote.

H.B. 298    Residence Lien Recovery Fund Amendments (Rep. S. Clark)

Rep. Clark explained the bill, assisted by Earl Webster, Division of Occupational and Professional Licensing and Ray Walker, Compliance Officer, Division of Occupational and Professional Licensing.

Spoke against the bill:    Taz Biesinger, Home Builder's Association

MOTION:    Rep. Adams moved to amend the bill as follows:

1.    Page 3, Lines 75 through 79 :    

             75          (1) A person licensed or applying for licensure or renewal as a contractor in license
             76      classifications that regularly engage in providing qualified services shall be exempt from
             77      registration as a qualified beneficiary under Section 38-11-301 if the person signs an affidavit
             78      at the time of licensure or renewal attesting that the person
[[   does not engage in providing

             79      qualified services  
]]
  will not file or cause a claim against the Residence Lien Recovery Fund       .


SUBSTITUTE
MOTION:    Rep. Biskupski moved to proceed to the next item on the agenda.

Rep. Adams withdrew his motion to amend.

The motion to proceed to the next item on the agenda passed, with Rep. Adams, Rep. Bryson, Rep. S. Clark, Rep. Dunnigan, Rep. Ferry, and Rep Morley voting in opposition.

1st Sub. S.B. 47    Uniform Trust Code (Sen. L. Hillyard)


MOTION:    Rep. D. Clark moved to amend the bill as follows:

1.    Page 10, Lines 284 through 300 :    

             284          (c) A restriction provided under Subsection (1) does not prevent a creditor or person
             285      described in Subsection (2)(a) from satisfying a claim or liability out of the settlor's beneficial
             286      interest in or transfer into trust if:
* * * Some lines not shown * * *

             300          (vi) the transfer
  is made when the settlor is insolvent or       renders the settlor insolvent;


2.    Page 11, Line 322 :    

             322      beneficial interest in or transfer into trust under Subsections (2)(c)
[[   (i)   ]] , (ii), (v), (vii), (viii), (ix),


3.    Page 27, Lines 809 through 811 :    

             809          (1) Before distributing to a trustee, the personal representative may require that the trust
             810      be registered if the state in which it is to be administered provides for registration and that the
             811      trustee inform the
  qualified       beneficiaries as provided in Section [ 75-7-303 ] 75-7-811 .


4.    Page 29, Lines 875 through 877 :    

             875          (h) "Qualified beneficiary" means a beneficiary who, on the date the beneficiary's
             876      qualification is determined:
             877          (i) is a
  current       distributee or permissible distributee of trust income or principal; or


5.    Page 30, Line 922 through Page 31, Line 942 :    

             922          (2)
  Except as specifically provided in this chapter, the            [[   The   ]] terms of a trust prevail over any provision of this chapter except:

* * * Some lines not shown * * *

             929          (e) the effect of a spendthrift provision
  , Section 26-6-14,       and the rights of certain creditors and assignees

             930      to reach a trust as provided in Part 5, Creditor's Claims-Spendthrift and Discretionary

Trusts;
             931          (f) the power of the court under Section 75-7-702 to require, dispense with, or modify
             932      or terminate a bond;
             933          

[[   (g) the power of the court under Subsection 75-7-708 (2) to adjust a trustee's

             934      compensation specified in the terms of the trust which is unreasonably low or high;  
]]

             935          
[[   (h)   ]]        (g)       the effect of an exculpatory term under Section 75-7-1008 ;

             936          
[[   (i)   ]]        (h)       the rights under Sections 75-7-1010 through 75-7-1013 of a person other than a

             937      trustee or beneficiary;
             938          
[[   (j)   ]]        (i)       periods of limitation for commencing a judicial proceeding;

             939          
[[   (k) the power of the court to take such action and exercise such jurisdiction as may be

             940      necessary in the interests of justice;  
]]
and
             941          
[[   (l)   ]]        (j)       the subject-matter jurisdiction of the court and venue for commencing a proceeding

             942      as provided in Sections 75-7-203 and 75-7-205 .

6.    Page 34, Lines 1020 through 1030 :     Delete lines 1020 through 1030 and renumber the remaining Sections accordingly.
7.    Page 43, Lines 1317 through 1318 :    

             1317          To the extent a beneficiary's interest is not protected by a spendthrift provision
  or Section 26-6-14       , the

             1318      court may authorize a creditor or assignee of the beneficiary to reach the beneficiary's interest

8.    Page 59, Lines 1800 through 1808 :    

             1800          75-7-708. Compensation of trustee.
             1801          
[[   (1)   ]] If the terms of a trust do not specify the trustee's compensation, a trustee is entitled

             1802      to compensation that is reasonable under the circumstances.
             1803          
[[   (2) If the terms of a trust specify the trustee's compensation, the trustee is entitled to be

             1804      compensated as specified, but the court may allow more or less compensation if:
             1805          (a) the duties of the trustee are substantially different from those contemplated

when
             1806      the trust was created; or
             1807          (b) the compensation specified by the terms of the trust would be unreasonably low or
             1808      high.  
]]


9.    Page 61, Lines 1860 through 1864 :    

             1860      investment complies with the prudent investor rule of Section 75-7-901 . The trustee may be
             1861      compensated by the investment company or investment trust for providing those services out of
             1862      fees charged to the trust

[[   if the trustee at least annually notifies the persons entitled under

             1863      Section 75-7-811 to receive a copy of the trustee's annual report, disclosing the existence of the
             1864      compensation, the reasons for the compensation, and how the amount was calculated  
]]
.

10.    Page 61, Lines 1870 through 1879 :    

             1870          (8) This section does not preclude the following transactions
  by the trustee            [[   , if fair to the

             1871      beneficiaries  
]]
:
* * * Some lines not shown * * *

             1879          (e) an advance by the trustee of money for the protection of the trust
  ;

     (f) collect, hold, and retain trust assets received from a trustor until, in the judgment of the trustee, disposition of the assets should be made. The assets may be retained even though they include an asset in which the trustee is personally interested;
    (g) acquire an undivided interest in a trust asset in which the trustee, in any trust capacity, holds an undivided interest;
    (h) borrow money to be repaid from trust assets or otherwise;
    (i) advance money to be repaid from trust assets or otherwise; or
    (j) employ persons, including attorneys, auditors, investment advisers, or agents, even if they are associated with the trustee, to advise or assist the trustee in the performance of his administrative duties; or


    (ii) act without independent investigation upon their recommendations; and
    (iii) instead of acting personally, employ one or more agents to perform any act of administration, whether or not discretionary;
    (k) if a governing instrument or order requires or authorizes investment in United States government obligations, a trustee may invest in those obligations, either directly or in the form of securities or other interests, in any open-end or closed-end management type investment company or investment trust registered under the provisions of the Investment Company Act of 1940, 15 U.S.C. Sections 80a-1 through 80a-64 if:
    (i) the portfolio of the investment company or investment trust is limited to United States government obligations, and repurchase agreements are fully collateralized by United States government obligations; and
    (ii) the investment company or investment trust takes delivery of the collateral for any repurchase agreement either directly or through an authorized custodian  
.     


11.    Page 63, Lines 1942 through 1944 :    

             1942          (3) A trustee shall send to the
[[   distributees or permissible distributees of trust income or

             1943      principal, and, except to the extent the terms of the trust provide otherwise, to other  
]]
qualified
             1944      beneficiaries who request it, at least annually and at the termination of the trust, a report of the

12.    Page 64, Line 1952 :    

             1952          (4) A
  qualified       beneficiary may waive the right to a trustee's report or other information


13.    Page 65, Line 1995 through Page 68, Line 2089 :    

             1995          75-7-814. Specific powers of trustee.
             1996          Without limiting the authority conferred by Section 75-7-813 , a trustee may:
* * * Some lines not shown * * *

             2086          (25) sign and deliver contracts and other instruments that are useful to achieve or
             2087      facilitate the exercise of the trustee's powers;
[[   and   ]]

             2088          (26) on termination of the trust, exercise the powers appropriate to finalize the
             2089      administration of the trust and distribute the trust property to the persons entitled to it
  ;

and


     (27) (a) delegate investment and management functions that a prudent trustee of comparable skills could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in:
    (i) selecting the agent;
    (ii) establishing the scope and terms of the delegation consistent with the purposes of the trust; and
    (iii) periodically reviewing the agent's actions to monitor the agent's performance and compliance with the terms of the delegation.
    (b) In performing a delegated function, an agent has a duty to the trust to exercise reasonable care to comply with the terms of the delegation.
    (c) A trustee who complies with the requirements of this Subsection (27)(a) is not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.  
.


14.    Page 70, Lines 2137 through 2139 :    

             2137          (1) Except as otherwise provided in Subsection (2), a trustee who invests and manages
             2138      trust assets owes a duty to the beneficiaries of the trust to comply with the prudent investor rule
             2139      set forth in this chapter.
  If a trustee is named on the basis of a trustee's representations of special skills or expertise, the trustee has a duty to use those special skills or expertise.      


15.    Page 74, Lines 2281 through 2284 :    

             2281          75-7-1004. Attorney's fees and costs.
             2282          
  (1)       In a judicial proceeding involving the administration of a trust, the court may, as justice

             2283      and equity may require, award costs and expenses, including reasonable attorney's fees, to any
             2284      party, to be paid by another party or from the trust that is the subject of the controversy.
    
  (2) If a trustee defends or prosecutes any proceeding in good faith, whether successful or not, the trustee is entitled to receive from the trust the necessary expenses and disbursements, including reasonable attorney's fees incurred.      


16.    Page 75, Line 2314 through Page 76, Line 2323 :    



             2314          
[[   (1)   ]] A term of a trust relieving a trustee of liability for breach of trust is unenforceable

             2315      to the extent that it:
             2316          
[[   (a)   ]]        (1)       relieves the trustee of liability for breach of trust committed in bad faith or with

             2317      reckless indifference to the purposes of the trust or the interests of the beneficiaries; or
             2318          
[[   (b)   ]]        (2)       was inserted        by the trustee or fiduciary without disclosure of its existence and contents            [[   as the result of an abuse by the trustee of a fiduciary or confidential

             2319      relationship to the settlor  
]]
.
             2320          
[[   (2) An exculpatory term drafted or caused to be drafted by the trustee is invalid as an

             2321      abuse of a fiduciary or confidential relationship unless the settlor is or was represented by
             2322      independent counsel or the trustee proves that the exculpatory term is fair under the
             2323      circumstances and that its existence and contents were adequately communicated to the settlor.  
]]


17.    Page 76, Lines 2328 through 2333 :    

             2328      the breach, or ratified the transaction constituting the breach, unless
[[   :

             2329          (1) the consent, release, or ratification of the beneficiary was induced by improper
             2330      conduct of the trustee;
             2331          (2)  
]]
at the time of the consent, release, or ratification, the beneficiary did not know of
             2332      the beneficiary's rights or of the material facts relating to the breach
[[   ; or

             2333          (3) the beneficiary was not represented by independent counsel  
]]
.

1.    Page 79, Line 2442 through Page 80, Line 2457 :    

             2442          75-7-1103. Application to existing relationships.
             2443          (1) Except as otherwise provided, this chapter applies to:
             2444          (a) all trusts created before, on, or after
[[   May   ]]        July       1, 2004;

             2445          (b) all judicial proceedings concerning trusts commenced on or after
[[   May   ]]        July       1, 2004; and

             2446          (c) judicial proceedings concerning trusts commenced before
[[   May   ]]        July      

1, 2004 unless the


             2447      court finds that application of a particular provision of this chapter would substantially interfere
             2448      with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in
             2449      which case the particular provision of this chapter does not apply and the superseded section
             2450      will apply.
             2451          (2) Any rule of construction or presumption provided in this chapter applies to trust
             2452      instruments executed before
[[   May   ]]        July       1, 2004 unless there is a clear indication of a contrary intent

             2453      in the terms of the trust.
             2454          (3) An act done before
[[   May   ]]        July       1, 2004 is not affected by this chapter.

             2455          (4) If a right is acquired, extinguished, or barred upon the expiration of a prescribed
             2456      period that has commenced to run under any other statute before
[[   May   ]]        July       1, 2004, that statute

             2457      continues to apply to the right even if it has been repealed or superseded.

The motion to amend passed unanimously.

Sen. Hillyard explained the bill, assisted by Tom Christensen, chairman of the committee to study the Uniform Trust Act, and George Sutton, Association of Financial Services.

MOTION:    Rep. D. Clark moved to pass the bill out favorably as amended. The motion passed unanimously, with Rep. Biskupski absent for the vote.

MOTION:    Rep. Webb moved to adjourn the meeting. The motion passed unanimously, with Rep. Biskupski absent for the vote.

Rep. Bryson adjourned the meeting at 8:45 a.m.






                    ____________________________
                     Rep. Katherine Bryson, Chair