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S.B. 189 Enrolled





Chief Sponsor: Dan R. Eastman

House Sponsor: Todd E. Kiser

             7      LONG TITLE
             8      General Description:
             9          This bill modifies provisions related to commerce to provide for the creation of a
             10      database related to independent contractors.
             11      Highlighted Provisions:
             12          This bill:
             13          .    enacts the Independent Contractor Database Act, including:
             14              .    defining terms;
             15              .    limiting the scope of the chapter;
             16              .    creating an Independent Contractor Enforcement Council and establishing its
             17      duties;
             18              .    discussing study items including coordination with the Uninsured Motorist
             19      Identification Database;
             20              .    requiring reporting;
             21              .    requiring the creation of a database;
             22              .    addressing confidentiality of the information in the database; and
             23              .    limiting liability;
             24          .    provides a repeal date for the Independent Contractor Database Act; and
             25          .    makes technical amendments.
             26      Monies Appropriated in this Bill:
             27          None
             28      Other Special Clauses:
             29          None

             30      Utah Code Sections Affected:
             31      AMENDS:
             32          63-55-213, as last amended by Laws of Utah 2007, Chapter 216
             33      ENACTS:
             34          13-46-101, Utah Code Annotated 1953
             35          13-46-102, Utah Code Annotated 1953
             36          13-46-103, Utah Code Annotated 1953
             37          13-46-201, Utah Code Annotated 1953
             38          13-46-202, Utah Code Annotated 1953
             39          13-46-301, Utah Code Annotated 1953
             40          13-46-302, Utah Code Annotated 1953
             41          13-46-303, Utah Code Annotated 1953
             43      Be it enacted by the Legislature of the state of Utah:
             44          Section 1. Section 13-46-101 is enacted to read:

Part 1. General Provisions

             47          13-46-101. Title.
             48          This chapter is known as the "Independent Contractor Database Act."
             49          Section 2. Section 13-46-102 is enacted to read:
             50          13-46-102. Definitions.
             51          As used in this chapter:
             52          (1) "Accessing agency" means:
             53          (a) the department;
             54          (b) the Department of Workforce Services;
             55          (c) the Labor Commission; and
             56          (d) the State Tax Commission.
             57          (2) "Council" means the Independent Contractor Enforcement Council created in

             58      Section 13-46-201 .
             59          (3) "Database" means the Independent Contractor Database created under this chapter.
             60          (4) "Department" means the Department of Commerce.
             61          Section 3. Section 13-46-103 is enacted to read:
             62          13-46-103. Scope.
             63          Nothing in this chapter may be construed as limiting or modifying the ability of an
             64      accessing agency or the attorney general to share information that is not part of the database,
             65      but is allowed to be shared by a law other than this chapter.
             66          Section 4. Section 13-46-201 is enacted to read:
Part 2. Independent Contractor Enforcement Council

             68          13-46-201. Creation.
             69          (1) (a) There is created within the department the Independent Contractor Enforcement
             70      Council consisting of the following four members:
             71          (i) the executive director of the department or the executive director's designee;
             72          (ii) the executive director of the Department of Workforce Services or the executive
             73      director's designee;
             74          (iii) the commissioner of the Labor Commission or the commissioner's designee; and
             75          (iv) the chief information officer of the Department of Technology Services.
             76          (b) The following shall work cooperatively with the council:
             77          (i) the Department of Public Safety; and
             78          (ii) the State Tax Commission.
             79          (2) The executive director of the department is chair of the council.
             80          (3) (a) A majority of the council members constitutes a quorum.
             81          (b) A vote of the majority of the council members present when a quorum is present is
             82      an action of the council.
             83          (4) The council shall meet at the call of the chair, except that the chair shall call a
             84      meeting at least quarterly.
             85          (5) The department shall staff the council.

             86          Section 5. Section 13-46-202 is enacted to read:
             87          13-46-202. Duties of the council.
             88          (1) The council shall:
             89          (a) direct the design of a database described in Part 3, Independent Contractor
             90      Database, so that the database may be accessed by one or more accessing agencies by no later
             91      than July 1, 2009;
             92          (b) beginning July 1, 2009, meet quarterly:
             93          (i) with:
             94          (A) the attorney general or a designee of the attorney general;
             95          (B) the chair of the State Tax Commission or a designee of the chair; and
             96          (C) the commissioner of the Department of Public Safety or the commissioner's
             97      designee; and
             98          (ii) (A) to review the most recent results from the database; and
             99          (B) to coordinate regulatory and law enforcement efforts; and
             100          (c) subject to Subsection (2), report by no later than November 30 of each year
             101      concerning the effectiveness of the database to:
             102          (i) the governor; and
             103          (ii) the Business and Labor Interim Committee.
             104          (2) The council may study how to do the following:
             105          (a) reduce costs to the state resulting from the misclassification of workers as
             106      independent contractors;
             107          (b) extend outreach and education efforts regarding the nature and requirements of
             108      independent contractor status;
             109          (c) promote efficient and effective information sharing amongst the member agencies;
             110      and
             111          (d) coordinate with the Uninsured Motorist Identification Database.
             112          (3) (a) The council shall make a report required by this Subsection (3) to the Business
             113      and Labor Interim Committee by no later than November 30 of 2008, 2009, 2010, and 2011.

             114          (b) As part of the report required by this Subsection (3), the chairs of the Business and
             115      Labor Interim Committee shall provide an opportunity to the following to report to the Business
             116      and Labor Interim Committee on the usefulness of the database:
             117          (i) each accessing agency;
             118          (ii) the attorney general; and
             119          (iii) the Department of Public Safety.
             120          (c) The council shall include in the report required by this Subsection (3):
             121          (i) an update on the design, implementation, and operation of the database;
             122          (ii) findings regarding the nature and extent of the misclassification of workers as
             123      independent contractors in this state;
             124          (iii) the results of regulatory and enforcement activities related to the database; and
             125          (iv) recommended legislative changes, if any, related to Subsection (2) or this
             126      Subsection (3).
             127          Section 6. Section 13-46-301 is enacted to read:
Part 3. Independent Contractor Database

             129          13-46-301. Creation.
             130          (1) (a) By no later than July 1, 2009, the department shall administer a database:
             131          (i) designed by the council to share data amongst accessing agencies, the attorney
             132      general, and the Department of Public Safety; and
             133          (ii) to be used by an accessing agency to identify when a person:
             134          (A) holds that person out as an independent contractor; or
             135          (B) engages in the performance of work as an independent contractor not subject to an
             136      employer's right to control the person.
             137          (b) Notwithstanding Subsection (1)(a), the department may contract in accordance with
             138      this chapter with a person other than the department:
             139          (i) to the extent necessary to design, implement, or operate the database; and
             140          (ii) in a manner consistent with Title 63, Chapter 56, Utah Procurement Code.
             141          (c) If the department contracts with a person who is not a government agency to

             142      operate the database, the department:
             143          (i) shall monitor the operations under the contract; and
             144          (ii) ensure that the contract allows for termination of the contract if the person fails to
             145      operate the database in accordance with the contract and this chapter.
             146          (2) An accessing agency shall cooperate with the department to provide information:
             147          (a) to be included in the database; and
             148          (b) to the extent that disclosure of the information is otherwise permitted by law other
             149      than this chapter.
             150          (3) The database shall include a process to compare the information in the database at
             151      least monthly to:
             152          (a) identify a worker who may be misclassified as an independent contractor;
             153          (b) promote employer compliance with state and federal laws related to:
             154          (i) withholding taxes;
             155          (ii) making payments for Social Security, Medicare, and unemployment insurance;
             156          (iii) providing the proper level of workers' compensation insurance;
             157          (iv) preventing insurance fraud;
             158          (v) paying overtime and minimum wages; and
             159          (vi) including a worker in an employee benefit program;
             160          (c) reduce employer intentional misclassification of a worker as an independent
             161      contractor; and
             162          (d) identify identity theft.
             163          Section 7. Section 13-46-302 is enacted to read:
             164          13-46-302. Confidentiality of information in the database.
             165          (1) An accessing agency shall designate who within that accessing agency may access
             166      the database.
             167          (2) (a) A person not designated under Subsection (1) may not use the database.
             168          (b) An individual designated under Subsection (1) may access the database only for a
             169      purpose provided for in Section 13-46-301 .

             170          (3) The database, and the information in the database, is considered a protected record
             171      under Title 63, Chapter 2, Government Records Access and Management Act, except that an
             172      accessing agency may disclose the information to a person who is not a person designated under
             173      Subsection (1):
             174          (a) to the extent necessary to take an administrative action by an accessing agency;
             175          (b) to the extent necessary to prosecute a criminal act; or
             176          (c) to the extent that the information is:
             177          (i) obtainable from a source other than the database; and
             178          (ii) permitted to be disclosed by a law other than this chapter.
             179          Section 8. Section 13-46-303 is enacted to read:
             180          13-46-303. Liability.
             181          The state and a person with whom the department contracts under Section 13-46-301 is
             182      not liable to any person for:
             183          (1) the design, implementation, or operation of the database as provided in this chapter;
             184      or
             185          (2) the collection and disclosure of information in the database as provided in this
             186      chapter.
             187          Section 9. Section 63-55-213 is amended to read:
             188           63-55-213. Repeal dates, Title 13.
             189          (1) Title 13, Chapter 16, Motor Fuel Marketing Act, is repealed July 1, 2012.
             190          (2) Title 13, Chapter 46, Independent Contractor Database Act, is repealed July 1,
             191      2013.

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