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S.B. 101 Enrolled

                 

UTAH ADMINISTRATIVE RULEMAKING ACT

                 
REVISION

                 
2005 GENERAL SESSION

                 
STATE OF UTAH

                 
Sponsor: Howard A. Stephenson

                 
                  LONG TITLE
                  General Description:
                      This bill amends rulemaking terms in the Utah Code to conform with the
                  Administrative Rulemaking Act and clarifies state agency authority to amend and repeal
                  rules. This bill also makes technical corrections.
                  Highlighted Provisions:
                      This bill:
                      .    amends the Utah Code by replacing the word "revoke" with "repeal" in the context
                  of a state agency's rulemaking authority; and
                      .    clarifies that an agency authorized to make administrative rules is also authorized to
                  amend or repeal those rules.
                  Monies Appropriated in this Bill:
                      None
                  Other Special Clauses:
                      None
                  Utah Code Sections Affected:
                  AMENDS:
                      9-2-204, as last amended by Chapter 50, Laws of Utah 2000
                      9-2-1906, as last amended by Chapter 4, Laws of Utah 2003, Second Special Session
                      9-2-2007, as enacted by Chapter 247, Laws of Utah 2003
                      9-6-205, as renumbered and amended by Chapter 241, Laws of Utah 1992
                      9-7-405, as renumbered and amended by Chapter 241, Laws of Utah 1992
                      53C-1-201, as last amended by Chapters 41 and 63, Laws of Utah 2004


                      63-46a-4, as last amended by Chapter 138, Laws of Utah 2001
                      63-46a-7, as last amended by Chapter 138, Laws of Utah 2001
                      63-46a-10.5, as last amended by Chapter 138, Laws of Utah 2001
                 
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 9-2-204 is amended to read:
                       9-2-204. Board duties and powers.
                      (1) The board shall:
                      (a) promote and encourage the economic, commercial, financial, industrial, agricultural,
                  and civic welfare of the state;
                      (b) do all lawful acts for the development, attraction, and retention of businesses,
                  industries, and commerce within the state;
                      (c) promote and encourage the expansion and retention of businesses, industries, and
                  commerce located in the state;
                      (d) support the efforts of local government and regional nonprofit economic development
                  organizations to encourage expansion or retention of businesses, industries, and commerce
                  located in the state;
                      (e) do other acts not specifically enumerated in this part, if the acts are for the betterment
                  of the economy of the state;
                      (f) work in conjunction with companies and individuals located or doing business within
                  the state to secure favorable rates, fares, tolls, charges, and classification for transportation of
                  persons or property by:
                      (i) railroad;
                      (ii) motor carrier; or
                      (iii) other common carriers;
                      (g) recommend policies, priorities, and objectives to the division regarding the
                  assistance, retention, or recruitment of business, industries, and commerce in the state; and
                      (h) ensure that any money or program administered by the department or its divisions for


                  the assistance, retention, or recruitment of businesses, industries, and commerce in the state be
                  administered so that the money or program is equitably available to all areas of the state unless
                  federal or state law requires or authorizes the geographic location of a recipient of the money or
                  program be considered in the distribution of the money or administration of the program.
                      (2) The board may:
                      (a) in furtherance of the authority granted under Subsection (1)(f), appear as a party
                  litigant on behalf of individuals or companies located or doing business within the state in
                  proceedings before regulatory commissions of the state, other states, or the federal government
                  having jurisdiction over such matters; and
                      (b) make, amend, or [revoke] repeal rules for the conduct of its business not inconsistent
                  with this part and in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
                  Act.
                      Section 2. Section 9-2-1906 is amended to read:
                       9-2-1906. Board duties and powers.
                      (1) The board shall:
                      (a) establish criteria and procedures for the allocation and issuance of contingent tax
                  credits to designated investors by means of certificates issued by the board, provided that a
                  contingent tax credit may not be issued unless the Utah fund of funds:
                      (i) first agrees to treat the amount of the tax credit redeemed by the state as a loan from
                  the state to the Utah fund of funds; and
                      (ii) agrees to repay the loan upon terms and conditions established by the board;
                      (b) establish criteria and procedures for assessing the likelihood of future certificate
                  redemptions by designated investors, including:
                      (i) criteria and procedures for evaluating the value of investments made by the Utah fund
                  of funds; and
                      (ii) the returns from the Utah fund of funds;
                      (c) establish criteria and procedures for registering and redeeming contingent tax credits
                  by designated investors holding certificates issued by the board;


                      (d) establish a target rate of return or range of returns on venture capital investments of
                  the Utah fund of funds;
                      (e) establish criteria and procedures governing commitments obtained by the board from
                  designated purchasers including:
                      (i) entering into commitments with designated purchasers; and
                      (ii) drawing on commitments to redeem certificates from designated investors;
                      (f) have power to:
                      (i) expend funds;
                      (ii) invest funds;
                      (iii) enter into contracts;
                      (iv) insure against loss; and
                      (v) perform any other act necessary to carry out its purpose; and
                      (g) (i) make, amend, and [revoke] repeal rules for the conduct of its affairs, consistent
                  with this part and in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking
                  Act;
                      (ii) all rules made by the board under Subsection (1)(g)(i) are subject to review by the
                  Legislative Management Committee:
                      (A) whenever made, modified, or revoked; and
                      (B) in each even-numbered year; and
                      (iii) Subsection (1)(g)(ii) does not preclude the Legislature's Administrative Rules
                  Review Committee from reviewing and taking appropriate action on any rule made, amended, or
                  revoked by the board.
                      (2) (a) The criteria and procedures established by the board for the allocation and
                  issuance of contingent tax credits shall:
                      (i) include the contingencies that must be met for a certificate and its related tax credits
                  to be:
                      (A) issued by the board;
                      (B) transferred by a designated investor; and


                      (C) redeemed by a designated investor in order to receive a contingent tax credit; and
                      (ii) tie the contingencies for redemption of certificates to the targeted rates of return and
                  scheduled redemptions of equity interests purchased by designated investors in the Utah fund of
                  funds.
                      (b) The board may not issue contingent tax credits under this part prior to July 1, 2004.
                      (3) (a) The board may charge a placement fee to the Utah fund of funds for the issuance
                  of a certificate and related contingent tax credit to a designated investor.
                      (b) The fee shall:
                      (i) be charged only to pay for reasonable and necessary costs of the board; and
                      (ii) not exceed .5% of the equity investment of the designated investor.
                      (4) The board's criteria and procedures for redeeming certificates:
                      (a) shall give priority to the redemption amount from the available funds in the
                  redemption reserve; and
                      (b) to the extent there are insufficient funds in the redemption reserve to redeem
                  certificates, shall grant the board the option to redeem certificates:
                      (i) by certifying a contingent tax credit to the designated investor; or
                      (ii) by making demand on designated purchasers consistent with the requirements of
                  Section 9-2-1921 .
                      (5) (a) The board shall, in consultation with the corporation, publish an annual report of
                  the activities conducted by the Utah fund of funds, and present the report to the governor and the
                  Executive Appropriations Committee of the Legislature.
                      (b) The annual report shall:
                      (i) include a copy of the audit of the Utah fund of funds and a valuation of the assets of
                  the Utah fund of funds;
                      (ii) review the progress of the investment fund allocation manager in implementing its
                  investment plan; and
                      (iii) describe any redemption or transfer of a certificate issued under this part.
                      (c) The annual report may not identify any specific designated investor who has


                  redeemed or transferred a certificate.
                      (d) (i) Beginning July 1, 2005, and thereafter every two years, the board shall publish a
                  progress report which shall evaluate the progress of the state in accomplishing the purposes
                  stated in Section 9-2-1902 .
                      (ii) The board shall give a copy of the report to the Legislature.
                      Section 3. Section 9-2-2007 is amended to read:
                       9-2-2007. Department's authority.
                      (1) The department, with approval of the board and within the limitations of this part,
                  may determine:
                      (a) the structure and amount of any partial rebates offered under this part;
                      (b) the economic impacts and job creation necessary to qualify for the incentive; and
                      (c) the other terms and conditions of any agreement entered into under this part.
                      (2) In reviewing claims for partial rebates of new state revenues, the department may
                  accept:
                      (a) as the amount of employee income taxes paid, the amount of employee income taxes
                  withheld and transmitted to the Utah State Tax Commission as evidenced by payroll records
                  rather than adjusting for the difference between taxes withheld and taxes actually paid through
                  filing by employees' annual income tax statements; and
                      (b) as the amount of company income taxes paid, the amount of corporate franchise and
                  income taxes estimated and transmitted to the Utah State Tax Commission as evidenced by
                  quarterly payment records rather than adjusting for the difference between estimated taxes paid
                  quarterly and taxes actually paid through the filing of the corporation's annual income tax
                  statement.
                      (3) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
                  board may make, amend, and [revoke] repeal rules regarding the development zone and partial
                  rebates offered within it, provided the rules are consistent with state and federal law.
                      (4) (a) The department shall make a report to the Legislature's Workforce and
                  Community and Economic Development Interim Committee on:


                      (i) the success of attracting new commercial projects to development zones under this
                  part and the corresponding increase in new, incremental jobs;
                      (ii) the period of time over which partial rebates of new state revenues shall be granted
                  under this part; and
                      (iii) the economic impact on the state related to generating new state revenues and
                  rebating a portion of those revenues under this part.
                      (b) The department shall make the reports prior to the 2005 General Session of the
                  Legislature to enable the committee to determine whether this part should be modified during the
                  2005 General Session.
                      Section 4. Section 9-6-205 is amended to read:
                       9-6-205. Board powers and duties.
                      (1) The board may:
                      (a) make, amend, or [revoke] repeal rules for the conduct of its business in governing the
                  institute and the division in accordance with Title 63, Chapter 46a, Utah Administrative
                  Rulemaking Act;
                      (b) receive gifts, bequests, and property; and
                      (c) issue certificates and offer and confer prizes, certificates, and awards for works of art
                  and achievement in the arts.
                      (2) The board shall make policy for the institute and for the division.
                      Section 5. Section 9-7-405 is amended to read:
                       9-7-405. Rules -- Use of library.
                      (1) The library board of directors shall make, amend, and [revoke] repeal rules, not
                  inconsistent with law, for the governing of the library.
                      (2) Each library established under this part shall be free to the use of the inhabitants of
                  the city where located, subject to the rules adopted by the board. The board may exclude from
                  the use of the library any person who willfully violates these rules. The board may extend the
                  privileges and use of the library to persons residing outside of the city upon terms and conditions
                  it may prescribe by rule.


                      Section 6. Section 53C-1-201 is amended to read:
                       53C-1-201. Creation of administration -- Purpose -- Director.
                      (1) (a) There is established within state government the School and Institutional Trust
                  Lands Administration.
                      (b) The administration shall manage all school and institutional trust lands and assets
                  within the state, except as otherwise provided in Title 53C, Chapter 3, Deposit and Allocation of
                  Revenue from Trust Lands, and Section 51-7-12 .
                      (2) The administration is an independent state agency and not a division of any other
                  department.
                      (3) (a) It is subject to the usual legislative and executive department controls except as
                  provided in this Subsection (3).
                      (b) (i) The director may make rules as approved by the board that allow the
                  administration to classify a business proposal submitted to the administration as protected under
                  Section 63-2-304 , for as long as is necessary to evaluate the proposal.
                      (ii) The administration shall return the proposal to the party who submitted the proposal,
                  and incur no further duties under Title 63, Chapter 2, Government Records Access and
                  Management Act, if the administration determines not to proceed with the proposal.
                      (iii) The administration shall classify the proposal pursuant to law if it decides to proceed
                  with the proposal.
                      (iv) Section 63-2-403 does not apply during the review period.
                      (c) The director shall make rules in compliance with Title 63, Chapter 46a, Utah
                  Administrative Rulemaking Act, except that the director, with the board's approval, may
                  establish a procedure for the expedited approval of rules, based on written findings by the
                  director showing:
                      (i) the changes in business opportunities affecting the assets of the trust;
                      (ii) the specific business opportunity arising out of those changes which may be lost
                  without the rule or changes to the rule;
                      (iii) the reasons the normal procedures under Section 63-46a-4 cannot be met without


                  causing the loss of the specific opportunity;
                      (iv) approval by at least five board members; and
                      (v) that the director has filed a copy of the rule and a rule analysis, stating the specific
                  reasons and justifications for its findings, with the Division of Administrative Rules and notified
                  interested parties as provided in Subsection 63-46a-4 [(7)](8).
                      (d) (i) The administration shall comply with Title 67, Chapter 19, Utah State Personnel
                  Management Act, except as provided in this Subsection (3)(d).
                      (ii) The board may approve, upon recommendation of the director, that exemption for
                  specific positions under Subsections 67-19-12 (2) and 67-19-15 (1) is required in order to enable
                  the administration to efficiently fulfill its responsibilities under the law. The director shall
                  consult with the director of the Department of Human Resource Management prior to making
                  such a recommendation.
                      (iii) The positions of director, deputy director, associate director, assistant director, legal
                  counsel appointed under Section 53C-1-305 , administrative assistant, and public affairs officer
                  are exempt under Subsections 67-19-12 (2) and 67-19-15 (1).
                      (iv) Salaries for exempted positions, except for the director, shall be set by the director,
                  after consultation with the director of the Department of Human Resource Management, within
                  ranges approved by the board. The board and director shall consider salaries for similar positions
                  in private enterprise and other public employment when setting salary ranges.
                      (v) The board may create an annual incentive and bonus plan for the director and other
                  administration employees designated by the board, based upon the attainment of financial
                  performance goals and other measurable criteria defined and budgeted in advance by the board.
                      (e) The administration shall comply with Title 63, Chapter 56, Utah Procurement Code,
                  except where the board approves, upon recommendation of the director, exemption from the
                  Utah Procurement Code, and simultaneous adoption of rules under Title 63, Chapter 46a, Utah
                  Administrative Rulemaking Act, for procurement, which enable the administration to efficiently
                  fulfill its responsibilities under the law.
                      (f) (i) The board and director shall review the exceptions under this Subsection (3) and


                  make recommendations for any modification, if required, which the Legislature would be asked
                  to consider during its annual general session.
                      (ii) The board and director may include in their recommendations any other proposed
                  exceptions from the usual executive and legislative controls the board and director consider
                  necessary to accomplish the purpose of this title.
                      (4) The administration is managed by a director of school and institutional trust lands
                  appointed by a majority vote of the board of trustees with the consent of the governor.
                      (5) (a) The board of trustees shall provide policies for the management of the
                  administration and for the management of trust lands and assets.
                      (b) The board shall provide policies for the ownership and control of Native American
                  remains that are discovered or excavated on school and institutional trust lands in consultation
                  with the Division of Indian Affairs and giving due consideration to Title 9, Chapter 9, Part 4,
                  Native American Grave Protection and Repatriation Act. The director may make rules in
                  accordance with Title 63, Chapter 46a, Administrative Rulemaking Act, to implement policies
                  provided by the board regarding Native American remains.
                      (6) In connection with joint ventures for the development of trust lands and minerals
                  approved by the board under Sections 53C-1-303 and 53C-2-401 , the administration may become
                  a member of a limited liability company under Title 48, Chapter 2c, Utah Revised Limited
                  Liability Company Act, and is considered a person under Section 48-2c-102 .
                      Section 7. Section 63-46a-4 is amended to read:
                       63-46a-4. Rulemaking procedure.
                       (1) An agency authorized to make rules is also authorized to amend or repeal those
                  rules.
                      [(1)] (2) Except as provided in Sections 63-46a-6 and 63-46a-7 , when making,
                  amending, or repealing a rule agencies shall comply with:
                      (a) the requirements of this section;
                      (b) consistent procedures required by other statutes;
                      (c) applicable federal mandates; and


                      (d) rules made by the division to implement this chapter.
                      [(2)] (3) Subject to the requirements of this chapter, each agency shall develop and use
                  flexible approaches in drafting rules that meet the needs of the agency and that involve persons
                  affected by the agency's rules.
                      [(3)] (4) (a) Each agency shall file its proposed rule and rule analysis with the division.
                      (b) Rule amendments shall be marked with new language underlined and deleted
                  language struck out.
                      (c) (i) The division shall publish the information required under this Subsection [(3)] (4)
                  on the rule analysis and the text of the proposed rule in the next issue of the bulletin.
                      (ii) For rule amendments, only the section or subsection of the rule being amended need
                  be printed.
                      (iii) If the director determines that the rule is too long to publish, the director shall
                  publish the rule analysis and shall publish the rule by reference to a copy on file with the
                  division.
                      [(4)] (5) Prior to filing a rule with the division, the department head shall consider and
                  comment on the fiscal impact a rule may have on businesses.
                      [(5)] (6) The rule analysis shall contain:
                      (a) a summary of the rule or change;
                      (b) the purpose of the rule or reason for the change;
                      (c) the statutory authority or federal requirement for the rule;
                      (d) the anticipated cost or savings to:
                      (i) the state budget;
                      (ii) local governments; and
                      (iii) other persons;
                      (e) the compliance cost for affected persons;
                      (f) how interested persons may review the full text of the rule;
                      (g) how interested persons may present their views on the rule;
                      (h) the time and place of any scheduled public hearing;


                      (i) the name and telephone number of an agency employee who may be contacted about
                  the rule;
                      (j) the name of the agency head or designee who authorized the rule;
                      (k) the date on which the rule may become effective following the public comment
                  period; and
                      (l) comments by the department head on the fiscal impact the rule may have on
                  businesses.
                      [(6)] (7) (a) For a rule being repealed and reenacted, the rule analysis shall contain a
                  summary that generally includes the following:
                      (i) a summary of substantive provisions in the repealed rule which are eliminated from
                  the enacted rule; and
                      (ii) a summary of new substantive provisions appearing only in the enacted rule.
                      (b) The summary required under this Subsection [(6)] (7) is to aid in review and may not
                  be used to contest any rule on the ground of noncompliance with the procedural requirements of
                  this chapter.
                      [(7)] (8) A copy of the rule analysis shall be mailed to all persons who have made timely
                  request of the agency for advance notice of its rulemaking proceedings and to any other person
                  who, by statutory or federal mandate or in the judgment of the agency, should also receive notice.
                      [(8)] (9) Following the publication date, the agency shall allow at least 30 days for public
                  comment on the rule.
                      [(9)] (10) (a) Except as provided in Sections 63-46a-6 and 63-46a-7 , a proposed rule
                  becomes effective on any date specified by the agency that is no fewer than 30 nor more than 120
                  days after the publication date.
                      (b) The agency shall provide notice of the rule's effective date to the division in the form
                  required by the division.
                      (c) The notice of effective date may not provide for an effective date prior to the date it is
                  received by the division.
                      (d) The division shall publish notice of the effective date of the rule in the next issue of


                  the bulletin.
                      (e) A proposed rule lapses if a notice of effective date or a change to a proposed rule is
                  not filed with the division within 120 days of publication.
                      Section 8. Section 63-46a-7 is amended to read:
                       63-46a-7. Emergency rulemaking procedure.
                      (1) All agencies shall comply with the rulemaking procedures of Section 63-46a-4 unless
                  an agency finds that these procedures would:
                      (a) cause an imminent peril to the public health, safety, or welfare;
                      (b) cause an imminent budget reduction because of budget restraints or federal
                  requirements; or
                      (c) place the agency in violation of federal or state law.
                      (2) (a) When finding that its rule is excepted from regular rulemaking procedures by this
                  section, the agency shall file with the division:
                      (i) the text of the rule; and
                      (ii) a rule analysis that includes the specific reasons and justifications for its findings.
                      (b) The division shall publish the rule in the bulletin as provided in Subsection
                  63-46a-4 [(3)] (4).
                      (c) The agency shall notify interested persons as provided in Subsection
                  63-46a-4 [(7)](8).
                      (d) The rule becomes effective for a period not exceeding 120 days on the date of filing
                  or any later date designated in the rule.
                      (3) If the agency intends the rule to be effective beyond 120 days, the agency shall also
                  comply with the procedures of Section 63-46a-4 .
                      Section 9. Section 63-46a-10.5 is amended to read:
                       63-46a-10.5. Repeal and reenactment of Utah Administrative Code.
                      (1) When the director determines that the Utah Administrative Code requires extensive
                  revision and reorganization, the division may repeal the code and reenact a new code according
                  to the requirements of this section.


                      (2) The division may:
                      (a) reorganize, reformat, and renumber the code;
                      (b) require each agency to review its rules and make any organizational or substantive
                  changes according to the requirements of Section 63-46a-6 ; and
                      (c) require each agency to prepare a brief summary of all substantive changes made by
                  the agency.
                      (3) The division may make nonsubstantive changes in the code by:
                      (a) adopting a uniform system of punctuation, capitalization, numbering, and wording;
                      (b) eliminating duplication;
                      (c) correcting defective or inconsistent section and paragraph structure in arrangement of
                  the subject matter of rules;
                      (d) eliminating all obsolete or redundant words;
                      (e) correcting obvious errors and inconsistencies in punctuation, capitalization,
                  numbering, referencing, and wording;
                      (f) changing a catchline to more accurately reflect the substance of each section, part,
                  rule, or title;
                      (g) updating or correcting annotations associated with a section, part, rule, or title; and
                      (h) merging or determining priority of any amendment, enactment, or repeal to the same
                  rule or section made effective by an agency.
                      (4) (a) To inform the public about the proposed code reenactment, the division shall
                  publish in the bulletin:
                      (i) notice of the code reenactment;
                      (ii) the date, time, and place of a public hearing where members of the public may
                  comment on the proposed reenactment of the code;
                      (iii) locations where the proposed reenactment of the code may be reviewed; and
                      (iv) agency summaries of substantive changes in the reenacted code.
                      (b) To inform the public about substantive changes in agency rules contained in the
                  proposed reenactment, each agency shall:


                      (i) make the text of their reenacted rules available:
                      (A) for public review during regular business hours; and
                      (B) in an electronic version; and
                      (ii) comply with the requirements of Subsection 63-46a-4 [(7)](8).
                      (5) The division shall hold a public hearing on the proposed code reenactment no fewer
                  than 30 days nor more than 45 days after the publication required by Subsection [(3)] (4)(a).
                      (6) The division shall distribute complete text of the proposed code reenactment without
                  charge to:
                      (a) state-designated repositories in Utah;
                      (b) the Administrative Rules Review Committee; and
                      (c) the Office of Legislative Research and General Counsel.
                      (7) The former code is repealed and the reenacted code is effective at noon on a date
                  designated by the division that is not fewer than 45 days nor more than 90 days after the
                  publication date required by this section.
                      (8) Repeal and reenactment of the code meets the requirements of Section 63-46a-9 for a
                  review of all agency rules.


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