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H.B. 274

             1     

STATUTORY CONSTRUCTION COMPLIANCE

             2     
AMENDMENTS

             3     
2010 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Rebecca D. Lockhart

             6     
Senate Sponsor: Stephen H. Urquhart

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill amends provisions of Titles 1 through 16 of the Utah Code by correcting terms
             11      to comply with rules of statutory construction applicable to the Utah Code.
             12      Highlighted Provisions:
             13          This bill:
             14          .    amends provisions of Titles 1 through 16 of the Utah Code by correcting terms to
             15      comply with rules of statutory construction applicable to the Utah Code; and
             16          .    makes technical changes.
             17      Monies Appropriated in this Bill:
             18          None
             19      Other Special Clauses:
             20          None
             21      Utah Code Sections Affected:
             22      AMENDS:
             23          3-1-1, Utah Code Annotated 1953
             24          3-1-9, as last amended by Laws of Utah 2007, Chapter 306
             25          3-1-11, as last amended by Laws of Utah 2005, Chapter 110
             26          3-1-13.8, as enacted by Laws of Utah 1994, Chapter 204
             27          3-1-14, Utah Code Annotated 1953


             28          3-1-15, Utah Code Annotated 1953
             29          3-1-15.1, as enacted by Laws of Utah 1994, Chapter 204
             30          3-1-17, as last amended by Laws of Utah 2007, Chapter 306
             31          3-1-22, Utah Code Annotated 1953
             32          3-1-26, Utah Code Annotated 1953
             33          3-1-35, as last amended by Laws of Utah 1994, Chapter 203
             34          3-1-37, as last amended by Laws of Utah 1994, Chapter 203
             35          4-1-7, as enacted by Laws of Utah 1979, Chapter 2
             36          4-2-8.7, as last amended by Laws of Utah 2009, Chapter 368
             37          4-2-15, as enacted by Laws of Utah 1985, Chapter 104
             38          4-5-5, as last amended by Laws of Utah 1990, Chapter 157
             39          4-5-7, as last amended by Laws of Utah 2007, Chapter 179
             40          4-5-8, as last amended by Laws of Utah 1990, Chapter 157
             41          4-5-9, as last amended by Laws of Utah 2008, Chapter 382
             42          4-5-15, as last amended by Laws of Utah 2007, Chapter 179
             43          4-5-18, as last amended by Laws of Utah 1990, Chapter 157
             44          4-7-8, as last amended by Laws of Utah 2003, Chapter 84
             45          4-7-11, as last amended by Laws of Utah 1995, Chapter 41
             46          4-9-15, as last amended by Laws of Utah 2008, Chapter 382
             47          4-14-3, as last amended by Laws of Utah 2009, Chapter 183
             48          4-15-2, as enacted by Laws of Utah 1981, Chapter 126
             49          4-15-10, as enacted by Laws of Utah 1981, Chapter 126
             50          4-17-7, as last amended by Laws of Utah 2009, Chapter 388
             51          4-22-3, as last amended by Laws of Utah 1996, Chapter 243
             52          4-22-6, as last amended by Laws of Utah 1999, Chapter 301
             53          4-23-5, as last amended by Laws of Utah 2008, Chapter 382
             54          4-23-6, as enacted by Laws of Utah 1979, Chapter 2
             55          4-23-8, as last amended by Laws of Utah 2004, Chapter 128
             56          4-24-2, as last amended by Laws of Utah 1997, Chapter 302
             57          4-24-12, as last amended by Laws of Utah 2007, Chapter 240
             58          4-24-20, as last amended by Laws of Utah 1997, Chapter 302


             59          4-26-5, as enacted by Laws of Utah 1979, Chapter 2
             60          4-29-2, as enacted by Laws of Utah 1979, Chapter 2
             61          4-30-7.6, as enacted by Laws of Utah 1999, Chapter 298
             62          4-31-16, as last amended by Laws of Utah 2007, Chapter 179
             63          4-31-16.5, as last amended by Laws of Utah 2008, Chapter 382
             64          4-32-3, as last amended by Laws of Utah 2007, Chapter 179
             65          4-32-7, as last amended by Laws of Utah 2008, Chapter 382
             66          4-32-16, as enacted by Laws of Utah 1979, Chapter 2
             67          4-32-22, as last amended by Laws of Utah 2007, Chapter 179
             68          4-35-7, as last amended by Laws of Utah 1990, Chapter 157
             69          4-37-102, as renumbered and amended by Laws of Utah 1994, Chapter 153
             70          4-37-109, as last amended by Laws of Utah 2008, Chapter 382
             71          4-37-110, as enacted by Laws of Utah 1994, Chapter 153
             72          4-37-202, as enacted by Laws of Utah 1994, Chapter 153
             73          4-37-203, as enacted by Laws of Utah 1994, Chapter 153
             74          4-37-204, as last amended by Laws of Utah 2008, Chapter 69
             75          4-37-302, as enacted by Laws of Utah 1994, Chapter 153
             76          4-37-303, as enacted by Laws of Utah 1994, Chapter 153
             77          4-37-305, as enacted by Laws of Utah 1994, Chapter 153
             78          4-37-402, as enacted by Laws of Utah 1994, Chapter 153
             79          4-37-502, as last amended by Laws of Utah 2007, Chapter 191
             80          4-37-503, as last amended by Laws of Utah 2008, Chapter 69
             81          4-39-201, as enacted by Laws of Utah 1997, Chapter 302
             82          4-39-205, as enacted by Laws of Utah 1997, Chapter 302
             83          4-39-206, as enacted by Laws of Utah 1997, Chapter 302
             84          4-39-302, as enacted by Laws of Utah 1997, Chapter 302
             85          4-39-304, as enacted by Laws of Utah 1997, Chapter 302
             86          4-39-305, as enacted by Laws of Utah 1997, Chapter 302
             87          4-39-306, as enacted by Laws of Utah 1997, Chapter 302
             88          6-1-3, Utah Code Annotated 1953
             89          6-1-9, Utah Code Annotated 1953


             90          6-1-15, Utah Code Annotated 1953
             91          7-1-303, as enacted by Laws of Utah 1981, Chapter 16
             92          7-1-309, as enacted by Laws of Utah 1981, Chapter 16
             93          7-1-607, as enacted by Laws of Utah 1981, Chapter 16
             94          7-1-612, as enacted by Laws of Utah 1981, Chapter 16
             95          7-1-806, as enacted by Laws of Utah 1981, Chapter 16
             96          7-2-9, as last amended by Laws of Utah 2008, Chapter 382
             97          7-2-10, as last amended by Laws of Utah 1989, Chapter 267
             98          7-2-12, as last amended by Laws of Utah 1989, Chapter 267
             99          7-5-2, as last amended by Laws of Utah 2000, Chapter 300
             100          7-5-4, as last amended by Laws of Utah 1982, Chapter 6
             101          7-5-7, as last amended by Laws of Utah 2004, Chapter 89
             102          7-5-8, as last amended by Laws of Utah 1982, Chapter 6
             103          7-5-11, as last amended by Laws of Utah 1982, Chapter 6
             104          7-7-2, as last amended by Laws of Utah 1995, Chapter 49
             105          7-7-4, as last amended by Laws of Utah 1994, Chapter 200
             106          7-7-7, as last amended by Laws of Utah 1994, Chapter 200
             107          7-7-14, as last amended by Laws of Utah 1994, Chapter 200
             108          7-7-15, as last amended by Laws of Utah 1989, Chapter 267
             109          7-7-17, as enacted by Laws of Utah 1981, Chapter 16
             110          7-7-19, as last amended by Laws of Utah 1994, Chapter 200
             111          7-7-21, as last amended by Laws of Utah 1997, Chapter 111
             112          7-7-26, as last amended by Laws of Utah 1995, Chapters 20 and 198
             113          7-7-29, as last amended by Laws of Utah 1983, Chapter 8
             114          7-7-30, as last amended by Laws of Utah 1983, Chapter 8
             115          7-7-32, as last amended by Laws of Utah 1994, Chapter 200
             116          7-7-33, as last amended by Laws of Utah 1994, Chapter 200
             117          7-7-43, as enacted by Laws of Utah 1981, Chapter 16
             118          7-9-5, as last amended by Laws of Utah 2003, Chapter 327
             119          7-9-19, as enacted by Laws of Utah 1981, Chapter 16
             120          7-9-32, as enacted by Laws of Utah 1981, Chapter 16


             121          7-14-5, as enacted by Laws of Utah 1981, Chapter 16
             122          7-17-4, as last amended by Laws of Utah 2002, Chapter 264
             123          7-17-6, as enacted by Laws of Utah 1979, Chapter 124
             124          7-17-8, as enacted by Laws of Utah 1979, Chapter 124
             125          7-17-9, as enacted by Laws of Utah 1979, Chapter 124
             126          7-18a-301, as enacted by Laws of Utah 1996, Chapter 63
             127          8-3-1, Utah Code Annotated 1953
             128          9-3-407, as last amended by Laws of Utah 2001, Chapter 151
             129          9-4-301, as renumbered and amended by Laws of Utah 1992, Chapter 241
             130          9-4-602, as last amended by Laws of Utah 2002, Chapter 185
             131          9-4-703, as last amended by Laws of Utah 2006, Chapter 14
             132          9-4-914, as last amended by Laws of Utah 2001, Chapter 319
             133          9-4-924, as last amended by Laws of Utah 2001, Chapter 319
             134          9-6-203, as renumbered and amended by Laws of Utah 1992, Chapter 241
             135          9-6-405, as renumbered and amended by Laws of Utah 1992, Chapter 241
             136          9-6-504, as last amended by Laws of Utah 2008, Chapter 382
             137          9-7-213, as last amended by Laws of Utah 2008, Chapter 382
             138          9-7-504, as last amended by Laws of Utah 2003, Chapter 47
             139          9-12-103, as last amended by Laws of Utah 2008, Chapter 382
             140          9-12-201, as renumbered and amended by Laws of Utah 1998, Chapter 336
             141          10-1-105, as enacted by Laws of Utah 1977, Chapter 48
             142          10-1-108, as last amended by Laws of Utah 1993, Chapter 4
             143          10-1-109, as enacted by Laws of Utah 1977, Chapter 48
             144          10-1-112, as enacted by Laws of Utah 1977, Chapter 48
             145          10-1-113, as enacted by Laws of Utah 1977, Chapter 48
             146          10-2-109, as last amended by Laws of Utah 2008, Chapter 16
             147          10-2-303, as last amended by Laws of Utah 2008, Chapter 19
             148          10-2-403, as last amended by Laws of Utah 2009, Chapters 205 and 273
             149          10-2-510, as last amended by Laws of Utah 1997, Chapter 389
             150          10-2-614, as enacted by Laws of Utah 1977, Chapter 48
             151          10-3-508, as enacted by Laws of Utah 1977, Chapter 48


             152          10-3-608, as last amended by Laws of Utah 1993, Chapter 4
             153          10-3-702, as enacted by Laws of Utah 1977, Chapter 48
             154          10-3-704, as enacted by Laws of Utah 1977, Chapter 48
             155          10-3-717, as enacted by Laws of Utah 1977, Chapter 48
             156          10-3-905, as enacted by Laws of Utah 1977, Chapter 48
             157          10-3-907, as enacted by Laws of Utah 1977, Chapter 48
             158          10-3-912, as last amended by Laws of Utah 1991, Chapter 221
             159          10-3-1004, as last amended by Laws of Utah 1977, Chapter 39
             160          10-3-1011, as enacted by Laws of Utah 1977, Chapter 48
             161          10-3-1012.5, as enacted by Laws of Utah 1991, Chapter 221
             162          10-3-1306, as last amended by Laws of Utah 1989, Chapter 147
             163          10-5-103, as enacted by Laws of Utah 1983, Chapter 34
             164          10-5-107, as last amended by Laws of Utah 2006, Chapter 178
             165          10-5-114, as enacted by Laws of Utah 1983, Chapter 34
             166          10-5-115, as enacted by Laws of Utah 1983, Chapter 34
             167          10-6-111, as last amended by Laws of Utah 2009, Chapter 350
             168          10-6-116, as last amended by Laws of Utah 1999, Chapter 300
             169          10-6-123, as enacted by Laws of Utah 1979, Chapter 26
             170          10-6-159, as last amended by Laws of Utah 1993, Chapter 4
             171          10-7-4, as last amended by Laws of Utah 2004, Chapter 207
             172          10-7-5, Utah Code Annotated 1953
             173          10-7-18, as last amended by Laws of Utah 2002, Chapter 90
             174          10-7-32, Utah Code Annotated 1953
             175          10-7-71, Utah Code Annotated 1953
             176          10-7-72, Utah Code Annotated 1953
             177          10-7-73, Utah Code Annotated 1953
             178          10-7-85, as enacted by Laws of Utah 1977, Chapter 36
             179          10-8-15, Utah Code Annotated 1953
             180          10-8-16, Utah Code Annotated 1953
             181          10-8-17, Utah Code Annotated 1953
             182          10-8-33, Utah Code Annotated 1953


             183          10-8-36, Utah Code Annotated 1953
             184          10-8-58.5, as last amended by Laws of Utah 2008, Chapter 382
             185          10-9a-403, as last amended by Laws of Utah 2008, Chapter 168
             186          10-9a-509.5, as last amended by Laws of Utah 2008, Chapter 112
             187          10-9a-514, as renumbered and amended by Laws of Utah 2005, Chapter 254
             188          10-9a-519, as renumbered and amended by Laws of Utah 2005, Chapter 254
             189          10-11-2, Utah Code Annotated 1953
             190          10-15-4, as last amended by Laws of Utah 2008, Chapter 360
             191          11-8-1, as enacted by Laws of Utah 1957, Chapter 30
             192          11-13-309, as renumbered and amended by Laws of Utah 2002, Chapter 286
             193          11-13-311, as last amended by Laws of Utah 2003, Chapter 21
             194          11-14-302, as last amended by Laws of Utah 2006, Chapter 83
             195          11-14-308, as last amended by Laws of Utah 2007, Chapter 303
             196          11-14-313, as last amended by Laws of Utah 2006, Chapter 83
             197          11-14-315, as last amended by Laws of Utah 2009, Chapter 388
             198          11-17-1.5, as last amended by Laws of Utah 2005, Chapter 148
             199          11-17-2, as last amended by Laws of Utah 2009, Chapter 92
             200          11-17-4, as last amended by Laws of Utah 1986, Chapter 206
             201          11-17-5, as last amended by Laws of Utah 1986, Chapter 206
             202          11-17-7, as last amended by Laws of Utah 1986, Chapter 206
             203          11-17-10, as last amended by Laws of Utah 1987, Chapter 2
             204          11-25-9, as enacted by Laws of Utah 1977, Chapter 276
             205          11-25-11, as last amended by Laws of Utah 2006, Chapter 359
             206          11-27-5, as last amended by Laws of Utah 2009, Chapter 388
             207          11-30-2, as last amended by Laws of Utah 2007, Chapter 329
             208          11-31-2, as last amended by Laws of Utah 2007, Chapter 329
             209          11-32-7, as enacted by Laws of Utah 1987, Chapter 143
             210          11-34-1, as last amended by Laws of Utah 2007, Chapter 329
             211          11-34-2, as enacted by Laws of Utah 1987, Chapter 200
             212          11-36-401, as last amended by Laws of Utah 2009, Chapter 181
             213          13-1-1, as enacted by Laws of Utah 1983, Chapter 322


             214          13-1a-6, as last amended by Laws of Utah 2008, Chapter 382
             215          13-2-6, as last amended by Laws of Utah 2008, Chapter 382
             216          13-5-3, as last amended by Laws of Utah 1993, Chapter 4
             217          13-5-12, as last amended by Laws of Utah 1997, Chapter 10
             218          13-5-16, Utah Code Annotated 1953
             219          13-7-1, as last amended by Laws of Utah 1973, Chapter 18
             220          13-7-2, as last amended by Laws of Utah 1987, Chapter 92
             221          13-11-6, as last amended by Laws of Utah 1991, Chapter 268
             222          13-11-19, as last amended by Laws of Utah 1995, Chapter 198
             223          13-11-20, as last amended by Laws of Utah 1992, Chapter 30
             224          13-11a-3, as last amended by Laws of Utah 2009, Chapter 133
             225          13-12-3, as enacted by Laws of Utah 1975, First Special Session, Chapter 6
             226          13-12-4, as enacted by Laws of Utah 1975, First Special Session, Chapter 6
             227          13-12-7, as enacted by Laws of Utah 1975, First Special Session, Chapter 6
             228          13-13-4, as enacted by Laws of Utah 1979, Chapter 147
             229          13-14b-103, as enacted by Laws of Utah 2003, Chapter 225
             230          13-15-4, as last amended by Laws of Utah 2009, Chapter 183
             231          13-15-5, as last amended by Laws of Utah 1987, Chapter 92
             232          13-32-103, as enacted by Laws of Utah 1999, Chapter 68
             233          13-32-104, as enacted by Laws of Utah 1999, Chapter 68
             234          13-32-107, as enacted by Laws of Utah 1999, Chapter 68
             235          13-32a-109.8, as last amended by Laws of Utah 2009, Chapter 272
             236          13-34-104, as last amended by Laws of Utah 2008, Chapter 382
             237          13-34-105, as last amended by Laws of Utah 2009, Chapter 372
             238          13-34-107, as last amended by Laws of Utah 2009, Chapter 183
             239          13-41-102, as last amended by Laws of Utah 2008, Chapter 382
             240          13-42-105, as last amended by Laws of Utah 2009, Chapters 183 and 229
             241          13-42-106, as enacted by Laws of Utah 2006, Chapter 154
             242          13-42-111, as last amended by Laws of Utah 2009, Chapters 183 and 229
             243          13-42-113, as enacted by Laws of Utah 2006, Chapter 154
             244          13-42-117, as last amended by Laws of Utah 2009, Chapter 229


             245          13-42-118, as last amended by Laws of Utah 2009, Chapter 229
             246          13-42-119, as last amended by Laws of Utah 2009, Chapter 229
             247          13-42-120, as last amended by Laws of Utah 2009, Chapter 229
             248          13-42-121, as enacted by Laws of Utah 2006, Chapter 154
             249          13-42-122, as last amended by Laws of Utah 2009, Chapter 229
             250          13-42-132, as last amended by Laws of Utah 2009, Chapter 183
             251          13-42-137, as enacted by Laws of Utah 2006, Chapter 154
             252          13-42-138, as enacted by Laws of Utah 2006, Chapter 154
             253          14-1-20, as last amended by Laws of Utah 2005, Chapter 64
             254          14-2-5, as last amended by Laws of Utah 2005, Chapter 64
             255          15-2-5, as enacted by Laws of Utah 1971, Chapter 20
             256          15-3-4, Utah Code Annotated 1953
             257          15-4-2, Utah Code Annotated 1953
             258          15-4-4, Utah Code Annotated 1953
             259          15-4-7, Utah Code Annotated 1953
             260          15-9-105, as last amended by Laws of Utah 2008, Chapter 382
             261          15-9-106, as last amended by Laws of Utah 2008, Chapter 382
             262          15-9-109, as last amended by Laws of Utah 2009, Chapter 183
             263          15-9-110, as enacted by Laws of Utah 2001, Chapter 237
             264          15-9-118, as enacted by Laws of Utah 2001, Chapter 237
             265          16-6a-709, as last amended by Laws of Utah 2007, Chapter 315
             266          16-6a-808, as last amended by Laws of Utah 2001, Chapter 127
             267          16-6a-1419, as enacted by Laws of Utah 2000, Chapter 300
             268          16-7-10, Utah Code Annotated 1953
             269          16-10a-103, as last amended by Laws of Utah 2009, Chapter 388
             270          16-10a-120, as last amended by Laws of Utah 2008, Chapter 364
             271          16-10a-201, as enacted by Laws of Utah 1992, Chapter 277
             272          16-10a-202, as last amended by Laws of Utah 2008, Chapter 364
             273          16-10a-401, as last amended by Laws of Utah 2002, Chapter 222
             274          16-10a-601, as enacted by Laws of Utah 1992, Chapter 277
             275          16-10a-602, as enacted by Laws of Utah 1992, Chapter 277


             276          16-10a-603, as enacted by Laws of Utah 1992, Chapter 277
             277          16-10a-604, as enacted by Laws of Utah 1992, Chapter 277
             278          16-10a-620, as enacted by Laws of Utah 1992, Chapter 277
             279          16-10a-621, as enacted by Laws of Utah 1992, Chapter 277
             280          16-10a-625, as enacted by Laws of Utah 1992, Chapter 277
             281          16-10a-704, as last amended by Laws of Utah 1993, Chapter 184
             282          16-10a-705, as enacted by Laws of Utah 1992, Chapter 277
             283          16-10a-706, as enacted by Laws of Utah 1992, Chapter 277
             284          16-10a-707, as enacted by Laws of Utah 1992, Chapter 277
             285          16-10a-720, as last amended by Laws of Utah 2008, Chapter 364
             286          16-10a-722, as last amended by Laws of Utah 2001, Chapter 218
             287          16-10a-723, as enacted by Laws of Utah 1992, Chapter 277
             288          16-10a-725, as enacted by Laws of Utah 1992, Chapter 277
             289          16-10a-727, as enacted by Laws of Utah 1992, Chapter 277
             290          16-10a-730, as enacted by Laws of Utah 1992, Chapter 277
             291          16-10a-732, as enacted by Laws of Utah 1992, Chapter 277
             292          16-10a-801, as enacted by Laws of Utah 1992, Chapter 277
             293          16-10a-803, as enacted by Laws of Utah 1992, Chapter 277
             294          16-10a-808, as enacted by Laws of Utah 1992, Chapter 277
             295          16-10a-822, as enacted by Laws of Utah 1992, Chapter 277
             296          16-10a-823, as enacted by Laws of Utah 1992, Chapter 277
             297          16-10a-825, as enacted by Laws of Utah 1992, Chapter 277
             298          16-10a-904, as enacted by Laws of Utah 1992, Chapter 277
             299          16-10a-1003, as enacted by Laws of Utah 1992, Chapter 277
             300          16-10a-1007, as enacted by Laws of Utah 1992, Chapter 277
             301          16-10a-1022, as enacted by Laws of Utah 1992, Chapter 277
             302          16-10a-1023, as enacted by Laws of Utah 2007, Chapter 85
             303          16-10a-1101, as enacted by Laws of Utah 1992, Chapter 277
             304          16-10a-1102, as enacted by Laws of Utah 1992, Chapter 277
             305          16-10a-1103, as last amended by Laws of Utah 1993, Chapter 184
             306          16-10a-1202, as enacted by Laws of Utah 1992, Chapter 277


             307          16-10a-1303, as enacted by Laws of Utah 1992, Chapter 277
             308          16-10a-1320, as enacted by Laws of Utah 1992, Chapter 277
             309          16-10a-1321, as enacted by Laws of Utah 1992, Chapter 277
             310          16-10a-1322, as enacted by Laws of Utah 1992, Chapter 277
             311          16-10a-1323, as enacted by Laws of Utah 1992, Chapter 277
             312          16-10a-1325, as enacted by Laws of Utah 1992, Chapter 277
             313          16-10a-1330, as last amended by Laws of Utah 2008, Chapter 364
             314          16-10a-1402, as enacted by Laws of Utah 1992, Chapter 277
             315          16-10a-1404, as enacted by Laws of Utah 1992, Chapter 277
             316          16-10a-1406, as enacted by Laws of Utah 1992, Chapter 277
             317          16-10a-1407, as last amended by Laws of Utah 2009, Chapter 388
             318          16-10a-1434, as enacted by Laws of Utah 1992, Chapter 277
             319          16-10a-1506, as enacted by Laws of Utah 1992, Chapter 277
             320          16-10a-1507, as enacted by Laws of Utah 1992, Chapter 277
             321          16-10a-1510, as enacted by Laws of Utah 1992, Chapter 277
             322          16-10a-1533, as enacted by Laws of Utah 1994, Chapter 31
             323          16-10a-1607, as last amended by Laws of Utah 2008, Chapter 364
             324          16-11-6, as enacted by Laws of Utah 1963, Chapter 20
             325          16-11-8, as last amended by Laws of Utah 2000, Chapters 71 and 261
             326          16-11-15, as last amended by Laws of Utah 1992, Third Special Session, Chapter 6
             327          16-11-16, as last amended by Laws of Utah 2002, Chapter 222
             328          16-12-5, as enacted by Laws of Utah 1965, Chapter 114
             329          16-12-6, as enacted by Laws of Utah 1965, Chapter 114
             330          16-13-4, as last amended by Laws of Utah 1992, Third Special Session, Chapter 6
             331          16-13-5, as last amended by Laws of Utah 1979, Chapter 55
             332          16-13-9, as last amended by Laws of Utah 1979, Chapter 55
             333          16-13-11, as enacted by Laws of Utah 1965, Chapter 27
             334          16-16-111, as enacted by Laws of Utah 2008, Chapter 363
             335          16-16-112, as enacted by Laws of Utah 2008, Chapter 363
             336          16-16-113, as enacted by Laws of Utah 2008, Chapter 363
             337          16-16-114, as enacted by Laws of Utah 2008, Chapter 363


             338          16-16-117, as enacted by Laws of Utah 2008, Chapter 363
             339          16-16-118, as enacted by Laws of Utah 2008, Chapter 363
             340          16-16-119, as enacted by Laws of Utah 2008, Chapter 363
             341          16-16-201, as enacted by Laws of Utah 2008, Chapter 363
             342          16-16-203, as enacted by Laws of Utah 2008, Chapter 363
             343          16-16-204, as enacted by Laws of Utah 2008, Chapter 363
             344          16-16-207, as enacted by Laws of Utah 2008, Chapter 363
             345          16-16-301, as enacted by Laws of Utah 2008, Chapter 363
             346          16-16-302, as enacted by Laws of Utah 2008, Chapter 363
             347          16-16-304, as enacted by Laws of Utah 2008, Chapter 363
             348          16-16-402, as enacted by Laws of Utah 2008, Chapter 363
             349          16-16-403, as enacted by Laws of Utah 2008, Chapter 363
             350          16-16-404, as enacted by Laws of Utah 2008, Chapter 363
             351          16-16-405, as enacted by Laws of Utah 2008, Chapter 363
             352          16-16-407, as enacted by Laws of Utah 2008, Chapter 363
             353          16-16-501, as enacted by Laws of Utah 2008, Chapter 363
             354          16-16-507, as enacted by Laws of Utah 2008, Chapter 363
             355          16-16-508, as enacted by Laws of Utah 2008, Chapter 363
             356          16-16-603, as enacted by Laws of Utah 2008, Chapter 363
             357          16-16-801, as enacted by Laws of Utah 2008, Chapter 363
             358          16-16-803, as enacted by Laws of Utah 2008, Chapter 363
             359          16-16-804, as enacted by Laws of Utah 2008, Chapter 363
             360          16-16-809, as enacted by Laws of Utah 2008, Chapter 363
             361          16-16-813, as enacted by Laws of Utah 2008, Chapter 363
             362          16-16-1001, as enacted by Laws of Utah 2008, Chapter 363
             363          16-16-1002, as enacted by Laws of Utah 2008, Chapter 363
             364          16-16-1004, as enacted by Laws of Utah 2008, Chapter 363
             365          16-16-1202, as enacted by Laws of Utah 2008, Chapter 363
             366          16-16-1205, as enacted by Laws of Utah 2008, Chapter 363
             367          16-16-1208, as enacted by Laws of Utah 2008, Chapter 363
             368          16-16-1209, as last amended by Laws of Utah 2009, Chapter 388


             369          16-16-1212, as enacted by Laws of Utah 2008, Chapter 363
             370          16-16-1213, as enacted by Laws of Utah 2008, Chapter 363
             371          16-16-1303, as enacted by Laws of Utah 2008, Chapter 363
             372          16-16-1402, as enacted by Laws of Utah 2008, Chapter 363
             373          16-16-1405, as enacted by Laws of Utah 2008, Chapter 363
             374          16-16-1406, as enacted by Laws of Utah 2008, Chapter 363
             375          16-16-1407, as enacted by Laws of Utah 2008, Chapter 363
             376          16-16-1503, as enacted by Laws of Utah 2008, Chapter 363
             377          16-16-1504, as enacted by Laws of Utah 2008, Chapter 363
             378          16-16-1602, as enacted by Laws of Utah 2008, Chapter 363
             379          16-16-1603, as enacted by Laws of Utah 2008, Chapter 363
             380          16-16-1604, as enacted by Laws of Utah 2008, Chapter 363
             381          16-16-1606, as enacted by Laws of Utah 2008, Chapter 363
             382          16-16-1607, as enacted by Laws of Utah 2008, Chapter 363
             383          16-16-1608, as enacted by Laws of Utah 2008, Chapter 363
             384          16-16-1609, as enacted by Laws of Utah 2008, Chapter 363
             385          16-16-1701, as enacted by Laws of Utah 2008, Chapter 363
             386          16-17-202, as enacted by Laws of Utah 2008, Chapter 364
             387          16-17-203, as enacted by Laws of Utah 2008, Chapter 364
             388          16-17-204, as enacted by Laws of Utah 2008, Chapter 364
             389          16-17-210, as enacted by Laws of Utah 2008, Chapter 364
             390          16-17-301, as enacted by Laws of Utah 2008, Chapter 364
             391          16-17-402, as enacted by Laws of Utah 2008, Chapter 364
             392     
             393      Be it enacted by the Legislature of the state of Utah:
             394          Section 1. Section 3-1-1 is amended to read:
             395           3-1-1. Declaration of policy.
             396          It is the declared policy of this state, as one means of improving the economic position
             397      of agriculture, to encourage the organization of producers of agricultural products into effective
             398      associations under the control of such producers, and to that end this act [should] shall be
             399      liberally construed.


             400          Section 2. Section 3-1-9 is amended to read:
             401           3-1-9. Powers.
             402          (1) An association formed under this act, or an association which might be formed
             403      under this act and which existed at the time this act took effect, shall have power and capacity
             404      to act possessed by natural persons and may do each and everything necessary, suitable, or
             405      proper for the accomplishment of any one or more of the purposes, or the attainment of any one
             406      or more of the objects herein enumerated or conducive to or expedient for the interests or
             407      benefit of the association, and may exercise all powers, rights, and privileges necessary or
             408      incident thereto, including the exercise of any rights, powers, and privileges granted by the
             409      laws of this state to corporations generally, excepting such as are inconsistent with the express
             410      provisions of this act.
             411          (2) Without limiting or enlarging the grant of authority contained in Subsection (1), it
             412      is hereby specifically provided that every such association shall have authority:
             413          (a) to act as agent, broker, or attorney in fact for its members and other producers, and
             414      for any subsidiary or affiliated association, and otherwise to assist or join with associations
             415      engaged in any one or more of the activities authorized by its articles, and to hold title for its
             416      members and other producers, and for subsidiary and affiliated association to property handled
             417      or managed by the association on their behalf;
             418          (b) to make contracts and to exercise by its board or duly authorized officers or agents,
             419      all such incidental powers as may be necessary, suitable or proper for the accomplishment of
             420      the purposes of the association and not inconsistent with law or its articles, and that may be
             421      conducive to or expedient for the interest or benefit of the association;
             422          (c) to make loans or advances to members or producer-patrons or to the members of an
             423      association which is itself a member or subsidiary thereof; to purchase, or otherwise acquire,
             424      endorse, discount, or sell any evidence of debt, obligation or security;
             425          (d) to establish and accumulate reasonable reserves and surplus funds and to abolish
             426      the same; also to create, maintain, and terminate revolving funds or other similar funds which
             427      may be provided for in the bylaws of the association;
             428          (e) to own and hold membership in or shares of the stock of other associations and
             429      corporations and the bonds or other obligations thereof, engaged in any related activity; or, in
             430      producing, warehousing or marketing any of the products handled by the association; or, in


             431      financing its activities; and while the owner thereof, to exercise all the rights of ownership,
             432      including the right to vote thereon;
             433          (f) to acquire, hold, sell, dispose of, pledge, or mortgage, any property which its
             434      purposes may require;
             435          (g) to borrow money without limitation as to amount, and to give its notes, bonds, or
             436      other obligations therefor and secure the payment thereof by mortgage or pledge;
             437          (h) to deal in products of, and handle machinery, equipment, supplies and perform
             438      services for nonmembers to an amount not greater in annual value than such as are dealt in,
             439      handled or performed for or on behalf of its members, but the value of the annual purchases
             440      made for persons who are neither members nor producers [shall not] may not exceed 15 per
             441      centum of the value of all its purchases. Business transacted by an association for or on behalf
             442      of the United States or any agency or instrumentality thereof, shall be disregarded in
             443      determining the volume or value of member and nonmember business transacted by such
             444      association;
             445          (i) if engaged in marketing the products of its members, to hedge its operations;
             446          (j) to have a corporate seal and to alter the same at pleasure;
             447          (k) to continue as a corporation for the time limited in its articles, and if no time limit
             448      is specified then perpetually;
             449          (l) to sue and be sued in its corporate name;
             450          (m) to conduct business in this state and elsewhere as may be permitted by law; and
             451          (n) to dissolve and wind up.
             452          Section 3. Section 3-1-11 is amended to read:
             453           3-1-11. Certificates of and termination of membership -- Dividends and
             454      distribution of reserves -- Preferred stock -- Certificates of interest -- Unclaimed credits.
             455          (1) No certificate for membership or stock shall be issued until fully paid for, but
             456      bylaws may provide that a member may vote and hold office prior to payment in full for his
             457      membership or stock.
             458          (2) Dividends in excess of eight per centum per annum on the actual cash value of the
             459      consideration received by the association [shall not] may not be paid on common stock or
             460      membership capital, but dividends may be cumulative if so provided in the articles or bylaws.
             461          (3) (a) Savings in excess of dividends and additions to reserves and surplus shall be


             462      distributed on the basis of patronage.
             463          (b) The bylaws may provide that any distribution to a nonmember, who is eligible for
             464      membership, may be credited to that nonmember until the amount of the distribution equals the
             465      value of a membership certificate, or a share of the association's common stock.
             466          (c) The distribution credited to the account of the nonmember may be transferred to the
             467      membership fund at the option of the board, if, after two years, the amount is less than the
             468      value of the membership certificate or a share of common stock.
             469          (4) (a) The bylaws shall provide the time and manner of settlement of membership
             470      interests with members who withdraw from the association or whose membership is otherwise
             471      terminated.
             472          (b) Provisions for forfeiture of membership interests may be made in the bylaws.
             473          (c) After the termination of the membership, for whatever cause, the withdrawing
             474      member shall exercise no further control over the facilities, assets, or activities of the
             475      association. The withdrawing member may not claim or receive any assets of the association
             476      except as follows:
             477          (i) undistributed patronage allocated to the withdrawing member may be paid to the
             478      withdrawing member pursuant to the association's bylaws;
             479          (ii) the withdrawing member may be reimbursed for the par value of membership or
             480      stock in the association pursuant to the association's articles, bylaws, and membership
             481      agreement; and
             482          (iii) the withdrawing member shall receive any distributions to which the member is
             483      entitled pursuant to Subsection 3-1-20 (3)(d).
             484          (5) (a) An association may issue preferred stock to members and nonmembers.
             485          (b) Preferred stock may be redeemed or retired by the association on the terms and
             486      conditions as are provided in the articles or bylaws and printed on the stock certificates.
             487          (c) Preferred stockholders [shall not be entitled to] may not vote, but no change in their
             488      priority or preference rights shall be effective until the written consent of the holders of a
             489      majority of the preferred stock has been obtained.
             490          (d) Payment for preferred stock may be made in cash, services, or property on the basis
             491      of the fair value of the stock, services, and property, as determined by the board.
             492          (6) (a) The association may issue to each member a certificate of interest evidencing


             493      the member's interest in any fund, capital investment, or other assets of the association.
             494          (b) Those certificates may be transferred only to the association, or to other purchasers,
             495      as approved by the board of directors, under the terms and conditions provided for in the
             496      bylaws.
             497          (7) (a) As used in this Subsection (7), "reasonable effort" means:
             498          (i) a letter to a member's or former member's last-known address, a listing of
             499      unclaimed credits in an association publication, and the posting of a list of unclaimed credits at
             500      the association's principal place of business; and
             501          (ii) publishing a list of the unclaimed credits exceeding $25 each, or greater, in a
             502      newspaper of general circulation in the area where the association's principal offices are
             503      located.
             504          (b) The association may retain revolving certificates of interest described in this
             505      Subsection (7) as an exception to the provisions of Title 67, Chapter 4a, Unclaimed Property
             506      Act, if:
             507          (i) the board of directors of the association determines to revolve the certificates and
             508      the certificates remain unclaimed by the association's members or former members for five
             509      years after the credit is declared;
             510          (ii) the association is authorized to retain those credits by its bylaws;
             511          (iii) the board of directors of the association approves the retention; and
             512          (iv) before retaining the credits, the association makes a reasonable effort to locate and
             513      communicate the issuance of the credits to the members or former members.
             514          (c) (i) The board of directors may either add the unclaimed credits as a contribution to
             515      the capital fund, or use them to establish an agricultural educational program as described in
             516      Subsection (7)(c)(ii).
             517          (ii) If the board of directors chooses to use the unclaimed credits to establish an
             518      agricultural educational program, it shall establish an agricultural educational program to:
             519          (A) provide scholarships for low income and worthy students to colleges and
             520      universities;
             521          (B) provide funding for director training and education;
             522          (C) provide funds for cooperative education programs in secondary or higher education
             523      institutions; or


             524          (D) provide other educational opportunities.
             525          (iii) The board of directors may not distribute unclaimed credits to current patrons of
             526      the association.
             527          (iv) Upon dissolution of an association, the board of directors shall report and remit
             528      unclaimed credits to the Division of Unclaimed Property.
             529          (d) (i) Each association that applies credits under Subsection (7)(c) during a calendar
             530      year shall file an annual report with the State Treasurer by April 15 of the following year.
             531          (ii) The report shall specify:
             532          (A) the dollar amount of credits applied during the year;
             533          (B) the dollar amount of credit paid to claimants during the year; and
             534          (C) the aggregate dollar amount of credits applied since January 1, 1996.
             535          (e) At any time after the association retains credits under this Subsection (7), the
             536      association shall pay the members, former members, or their successors in interest, the value of
             537      the credit, without interest, if the members, former members, or their successors in interest:
             538          (i) file a written claim for payment with the association; and
             539          (ii) surrender the certificate issued by the association that evidences the credit.
             540          Section 4. Section 3-1-13.8 is amended to read:
             541           3-1-13.8. Director committees.
             542          (1) (a) Unless otherwise provided by the articles of incorporation or bylaws, a board of
             543      directors may create one or more committees and appoint members of the board of directors to
             544      serve on them.
             545          (b) Each committee [must] shall have two or more members who serve at the
             546      discretion of the board of directors.
             547          (2) The creation of a committee and appointment of members to it [must] shall be
             548      approved by the greater of:
             549          (a) a majority of all the directors in office when the action is taken; or
             550          (b) the number of directors required by the articles of incorporation or bylaws to take
             551      action under Section 3-1-13.6 .
             552          (3) Sections 3-1-13.2 and 3-1-13.6 shall apply to committees and their members.
             553          (4) The board of directors, the articles of incorporation, or the bylaws may provide the
             554      scope of the authority that each committee may exercise.


             555          (5) The creation of, delegation of authority to, or action by a committee does not alone
             556      constitute compliance by a director with the standards of conduct described in Section
             557      3-1-13.3 .
             558          Section 5. Section 3-1-14 is amended to read:
             559           3-1-14. Removal of director.
             560          Any member may ask for the removal of a director by filing charges with the secretary
             561      or president of the association, together with a petition signed by 10 per centum of the
             562      members requesting the removal of the director in question. The removal shall be voted upon at
             563      the next meeting of the members, and the association may remove the director by a majority
             564      vote of the members voting thereon. The director whose removal is requested shall be served
             565      with a copy of the charges not less than 10 days prior to the meeting and shall have an
             566      opportunity at the meeting to be heard in person and by counsel and to present evidence; and
             567      the persons requesting the removal shall have the same opportunity. In case the bylaws provide
             568      for election of directors by districts, then the petition for removal of a director [must] shall be
             569      signed by 20 per centum of the members residing in the district from which he was elected. The
             570      board [must] shall call a special meeting of the members residing in that district to consider the
             571      removal of the director; and by a majority vote of the members of that district voting thereon
             572      the director in question shall be removed from office.
             573          Section 6. Section 3-1-15 is amended to read:
             574           3-1-15. Officers.
             575          The board shall elect a president, a secretary and a treasurer, and may elect one or more
             576      vice-presidents, and such other officers as may be authorized in the bylaws. Unless the articles
             577      otherwise specifically provide, the president and at least one of the vice-presidents [must] shall
             578      be directors, but a vice-president who is not a director cannot succeed to or fill the office of
             579      president. Any two of the offices of vice-president, secretary and treasurer may be combined in
             580      one person.
             581          Section 7. Section 3-1-15.1 is amended to read:
             582           3-1-15.1. Duties of officers.
             583          Each officer has the authority and [should] shall perform the duties set forth in the
             584      bylaws, or, to the extent consistent with the bylaws, the duties prescribed by the directors or by
             585      the officer authorized by the board of directors to prescribe the duties of other officers.


             586          Section 8. Section 3-1-17 is amended to read:
             587           3-1-17. Contracts with association.
             588          (1) (a) The bylaws may require members to execute contracts with the association in
             589      which the members agree to patronize the facilities created by the association, and to sell all or
             590      a specified part of their products to or through it, or to buy all or a specified part of their
             591      supplies from or through the association or any facilities created by it.
             592          (b) If the members contract to sell through the association, the fact that for certain
             593      purposes the relation between the association and its members may be one of agency [shall not]
             594      does not prevent the passage from the member to the association of absolute and exclusive title
             595      to the products which are the subject matter of the contract.
             596          (c) Such title shall pass to the association upon delivery of the product, or at any other
             597      time specified in the contract.
             598          (d) If the period of the contract exceeds three years, the bylaws and the contracts
             599      executed thereunder shall specify a reasonable period, not less than 10 days in each year, after
             600      the third year, during which the member, by giving to the association such reasonable notice as
             601      the association may prescribe, may withdraw from the association; provided, that if the bylaws
             602      or contracts executed hereunder so specify, a member may not withdraw from the association
             603      while indebted thereto.
             604          (e) In the absence of such a withdrawal provision, a member may withdraw at any time
             605      after three years.
             606          (2) The contract may fix, as liquidated damages, which [shall not] may not be regarded
             607      as penalties, specific sums to be paid by the members to the association upon the breach of any
             608      provision of the contract regarding the use of any facilities of the association or the sale,
             609      delivery, handling, or withholding of products; and may further provide that the member who
             610      breaks his contract shall pay all costs, including premiums for bonds, and reasonable attorney's
             611      fees, to be fixed by the court, in case the association prevails in any action upon the contract.
             612          (3) (a) A court of competent jurisdiction may grant an injunction to prevent the breach
             613      or further breach of the contract by a member and may decree specific performance thereof.
             614          (b) Pending the adjudication of such an action and upon filing a verified complaint
             615      showing the breach or threatened breach, and a bond in such form and amount as may be
             616      approved by the court, the court may grant a temporary restraining order or preliminary


             617      injunction against the member.
             618          (4) No remedy, either legal or equitable, herein provided for, shall be exclusive, but the
             619      association may avail itself of any and all such remedies, at the same or different times, in any
             620      action or proceeding.
             621          (5) In any action upon such marketing contracts, it shall be conclusively presumed that
             622      a landowner or landlord or lessor is able to control the delivery of products produced on his
             623      land by tenants or others, whose tenancy or possession or work on such land or the terms of
             624      whose tenancy or possession or labor thereon were created or changed after execution by the
             625      landowner or landlord or lessor of such a marketing contract; and in such actions, the foregoing
             626      remedies for nondelivery or breach shall lie and be enforceable against such landowner,
             627      landlord, or lessor.
             628          (6) (a) The association may file contracts to sell agricultural products to or through the
             629      association in the office of the county recorder of the county in which the products are
             630      produced.
             631          (b) If the association has uniform contracts with more than one member in any county,
             632      it may, in lieu of filing the original contracts, file the affidavit of its president, vice president or
             633      secretary, containing or having attached thereto:
             634          (i) a true copy of the uniform contract entered into with its members producing such
             635      product in that county; and
             636          (ii) the names of the members who have executed such contract and a description of
             637      the land on which the product is produced, if such description is contained in the contract.
             638          (c) The association may file from time to time thereafter affidavits containing revised
             639      or supplementary lists of the members producing such product in that county without setting
             640      forth therein a copy of the uniform contract but referring to the filed or recorded copy thereof.
             641          (d) All affidavits filed under this section shall state in substance that they are filed
             642      pursuant to the provisions of this section.
             643          (e) The county recorder shall file such affidavits and make endorsements thereon and
             644      record and make entries thereof in the same manner as is required by law in the case of chattel
             645      mortgages, and he shall compile and make available for public inspection a convenient index
             646      containing the names of all signers of such contracts, and collect for his services hereunder the
             647      same fees as for chattel mortgages.


             648          (f) The filing of any such contract, or such affidavit, shall constitute constructive notice
             649      of the contents thereof, and of the association's title or right to the product embraced in such
             650      contract, to all subsequent purchasers, encumbrancers, creditors, and to all persons dealing with
             651      the members with reference to such product.
             652          (g) No title, right, or lien of any kind shall be acquired to or on the product thereafter
             653      except through the association or with its consent, or subject to its rights; and the association
             654      may recover the possession of such property from any and all subsequent purchasers,
             655      encumbrancers, and creditors, and those claiming under them, in whose possession the same
             656      may be found, by any appropriate action for the recovery of personal property, and it may have
             657      relief by injunction and for damages.
             658          Section 9. Section 3-1-22 is amended to read:
             659           3-1-22. Accrued rights not affected by chapter.
             660          This act [shall not] does not impair nor affect any act, offense committed, or right
             661      accruing, accrued or acquired, or liability, penalty, forfeiture or punishment incurred prior to
             662      the time this act takes effect, but the same may be enjoyed, asserted, enforced, prosecuted, or
             663      inflicted as fully and to the same extent as if this act had not been passed.
             664          Section 10. Section 3-1-26 is amended to read:
             665           3-1-26. Separability clause.
             666          If any provision of this act or the application thereof to any person or circumstances is
             667      held invalid, such invalidity [shall not] does not affect other provisions or applications of the
             668      act which can be given effect without the invalid provision or application, and to this end the
             669      provisions of this act are declared to be severable.
             670          Section 11. Section 3-1-35 is amended to read:
             671           3-1-35. Procedure at meeting to vote on plan of merger or consolidation --
             672      Abandonment of merger or consolidation prior to filing articles.
             673          (1) At each meeting, a vote of the current members of each cooperative party to the
             674      merger or consolidation having members and a vote of the shareholders of each party to the
             675      merger or consolidation having stock or shares shall be taken on the proposed plan of merger
             676      or consolidation.
             677          (2) (a) If the articles of incorporation or bylaws of any party to the merger or
             678      consolidation provide for the election by members or shareholders at district meetings of


             679      delegates to vote at annual or special meetings of the association or noncooperative
             680      corporation, these procedures shall be followed, and the vote of the delegates at the meeting
             681      where the plan of merger or consolidation is voted on shall be counted in the same way and
             682      entitled to the same weight as a vote of the delegates at any other meeting of the association or
             683      noncooperative corporation.
             684          (b) Members of cooperative parties may vote in person or by signed ballot, if voting by
             685      ballot is allowed in the association's bylaws.
             686          (c) Shareholders or their delegates of noncooperative parties may vote in person or by
             687      written proxy.
             688          (3) The plan of merger or consolidation [must] shall be approved by a 2/3 majority of:
             689          (a) the voting members of cooperative parties; and
             690          (b) holders or delegates of holders of the outstanding shares of noncooperative parties.
             691          (4) After approval by a vote of the members and shareholders of each party to the
             692      merger or consolidation and prior to the filing of the articles of merger or consolidation, the
             693      merger or consolidation may be abandoned pursuant to provisions set forth in the plan of
             694      merger or consolidation.
             695          Section 12. Section 3-1-37 is amended to read:
             696           3-1-37. Effect of merger or consolidation.
             697          (1) After the certificate of merger or consolidation is issued by the Division of
             698      Corporations and Commercial Code, the merger or consolidation shall be effected.
             699          (2) When the merger or consolidation has been effected:
             700          (a) The associations or corporations which are parties to the plan of merger or
             701      consolidation shall be a single corporation designated in the plan of merger or consolidation as
             702      the surviving or new corporation.
             703          (b) The separate existence of all associations and corporations which are parties to the
             704      merger or consolidation, except the surviving or new corporation, shall cease.
             705          (c) The surviving or new corporation shall have all of the rights, privileges,
             706      immunities, and powers and be subject to all the duties and liabilities of a corporation
             707      organized under this chapter or under the Utah Nonprofit Corporation and Cooperative
             708      Association Act, whichever act or chapter is specified in the plan of merger or consolidation.
             709          (d) (i) The surviving or new corporation shall possess all rights, privileges, immunities,


             710      and franchises of each of the merging associations and corporations.
             711          (ii) All property, debts due, including subscriptions to shares, all other choses in action,
             712      and all interests of each of the associations and corporations merged or consolidated, shall be
             713      taken, transferred to, and vested in the single corporation immediately.
             714          (iii) The title to or interest in any real estate vested in any of the associations or
             715      corporations [shall not] may not revert or be in any way impaired by the merger or
             716      consolidation.
             717          (e) (i) The surviving or new corporation shall be responsible and liable for all the
             718      liabilities and obligations of each of the associations and corporations which merged or
             719      consolidated.
             720          (ii) Any claim existing or action or proceeding pending by or against any of the
             721      associations and corporations may be prosecuted as if the merger or consolidation had not
             722      taken place, or the surviving or new corporation may be substituted in its place.
             723          (iii) The rights of creditors or any liens upon the property of any association or
             724      corporation [shall not] may not be impaired by the merger or consolidation.
             725          (f) The articles of incorporation of the surviving or new corporation may be amended,
             726      if changes in the articles of incorporation are stated in the plan of merger or consolidation.
             727          Section 13. Section 4-1-7 is amended to read:
             728           4-1-7. Severability clause.
             729          If any provision of this code or the application of any such provision to any person or
             730      circumstance is held invalid, the invalidity [shall not] does not affect other provisions or
             731      applications of this code which can be given effect without the invalid provision or application,
             732      and to this end the provisions of this code are declared to be severable.
             733          Section 14. Section 4-2-8.7 is amended to read:
             734           4-2-8.7. Invasive Species Mitigation Fund created.
             735          (1) As used in this section, "project" means an undertaking that prevents catastrophic
             736      wildland fire through land restoration in a watershed that:
             737          (a) is impacted by cheatgrass or other invasive species; or
             738          (b) has a fuel load that may contribute to a catastrophic wildland fire.
             739          (2) (a) There is created a general fund restricted account known as the "Invasive
             740      Species Mitigation Fund."


             741          (b) The fund shall consist of:
             742          (i) money appropriated by the Legislature;
             743          (ii) grants from the federal government; and
             744          (iii) grants or donations from a person.
             745          (3) Any unallocated balance in the fund at the end of the year is nonlapsing.
             746          (4) (a) After consulting with the Department of Natural Resources and the
             747      Conservation Commission, the department may expend fund monies:
             748          (i) on a project implemented by:
             749          (A) the department; or
             750          (B) the Conservation Commission; or
             751          (ii) by giving a grant for a project to:
             752          (A) a state agency;
             753          (B) a federal agency; or
             754          (C) a federal, state, tribal, or private landowner.
             755          (b) A grant to a federal landowner [must] shall be matched with at least an equal
             756      amount of money by the federal landowner.
             757          (c) In expending the fund monies authorized by Subsection (4)(a)(i), the department
             758      shall use existing infrastructure and employees to plan and implement the project.
             759          (5) In giving a grant, the department shall consider the effectiveness of a project in
             760      preventing:
             761          (a) first, the risk to public safety and health from:
             762          (i) air pollution;
             763          (ii) flooding; and
             764          (iii) reduced visibility on a highway;
             765          (b) second, damage to the environment, including:
             766          (i) soil erosion;
             767          (ii) degraded water quality; and
             768          (iii) release of carbon; and
             769          (c) third, damage to:
             770          (i) a local economy; and
             771          (ii) habitat for wildlife or livestock.


             772          Section 15. Section 4-2-15 is amended to read:
             773           4-2-15. Civil and criminal penalties -- Costs -- Civil liability.
             774          (1) Except as otherwise provided by this title, any person, or the officers or employees
             775      of any person, who violates this title or any lawful notice or order issued pursuant to this title
             776      shall be assessed a penalty not to exceed $5,000 per violation in a civil proceeding, and in a
             777      criminal proceeding is guilty of a class B misdemeanor. A subsequent criminal violation
             778      within two years is a class A misdemeanor.
             779          (2) Any person, or the officers or employees of any person, shall be liable for any
             780      expenses incurred by the department in abating any violation of this title.
             781          (3) A penalty assessment or criminal conviction under this title [shall not] does not
             782      relieve the person assessed or convicted from civil liability for claims arising out of any act
             783      which was also a violation.
             784          Section 16. Section 4-5-5 is amended to read:
             785           4-5-5. Adulterated or misbranded articles -- Tagging -- Detention or embargo --
             786      Court proceedings for condemnation -- Perishable food.
             787          (1) (a) When an authorized agent of the department finds or has probable cause to
             788      believe that any food is adulterated, or so misbranded as to be dangerous or fraudulent within
             789      the meaning of this chapter, he shall affix to the food a tag or other appropriate marking,
             790      giving notice that:
             791          (i) the food is, or is suspected of being, adulterated or misbranded;
             792          (ii) the food has been detained or embargoed; and
             793          (iii) removal of the food is prohibited as provided in Subsection (1)(b).
             794          (b) No person may remove or dispose of detained or embargoed food by sale or
             795      otherwise until permission for removal or disposal is given by an agent of the department or the
             796      court.
             797          (2) When food detained or embargoed under Subsection (1) has been found by an agent
             798      to be adulterated or misbranded, the department shall petition the district court in whose
             799      jurisdiction the food is detained or embargoed for an order of condemnation of the food. When
             800      the agent has found that food so detained or embargoed is not adulterated or misbranded, the
             801      department shall remove the tag or other marking.
             802          (3) (a) If the court finds that detained or embargoed food is adulterated or misbranded,


             803      the food [must] shall, after entry of the decree, be destroyed under the supervision of the agent.
             804          (b) If the adulteration or misbranding can be corrected by proper labeling or processing
             805      of the food, the court may by order direct that the food be delivered to the claimant for labeling
             806      or processing after:
             807          (i) entry of the decree;
             808          (ii) all costs, fees, and expenses have been paid; and
             809          (iii) a sufficient bond, conditioned that the food [must] shall be properly labeled and
             810      processed, has been executed.
             811          (c) An agent of the department shall supervise, at the claimant's expense, the labeling
             812      or processing of the food.
             813          (d) The bond shall be returned to the claimant of the food upon:
             814          (i) representation to the court by the department that the food is no longer in violation
             815      of this chapter; and
             816          (ii) the expenses of supervision have been paid.
             817          (4) If an authorized agent of the department finds in any building or vehicle any
             818      perishable food which is unsound, contains any filthy, decomposed, or putrid substance, or may
             819      be poisonous, deleterious to health, or otherwise unsafe, the commissioner or his authorized
             820      agent shall condemn or destroy the food or render it unsalable as human food.
             821          Section 17. Section 4-5-7 is amended to read:
             822           4-5-7. Adulterated food specified.
             823          A food is adulterated:
             824          (1) (a) if it bears or contains any poisonous or deleterious substance that may render it
             825      injurious to health; but in case the substance is not an added substance the food [shall not] may
             826      not be considered adulterated under this Subsection (1)(a) if the quantity of the substance in
             827      such food does not ordinarily render it injurious to health;
             828          (b) (i) if it bears or contains any added poisonous or added deleterious substance other
             829      than one that is:
             830          (A) a pesticide chemical in or on a raw agricultural commodity;
             831          (B) a food additive; or
             832          (C) a color additive that is unsafe within the meaning of Subsection 4-5-11 (1); or
             833          (ii) if it is a raw agricultural commodity and it bears or contains a pesticide chemical


             834      that is unsafe within the meaning of 21 U.S.C. Sec. 346a; or
             835          (iii) if it is or it bears or contains any food additive that is unsafe within the meaning of
             836      21 U.S.C. Sec. 348; provided that where a pesticide chemical has been used in or on a raw
             837      agricultural commodity in conformity with an exemption granted or tolerance prescribed under
             838      21 U.S.C. 346a and the raw agricultural commodity has been subjected to processing such as
             839      canning, cooking, freezing, dehydrating, or milling the residue of such pesticide chemical
             840      remaining in or on such processed food shall, notwithstanding the provisions of Section 4-5-11
             841      and this Subsection (1)(b)(iii), not be considered unsafe if such residue in or on the raw
             842      agricultural commodity has been removed to the extent possible in good manufacturing
             843      practice, and the concentration of such residue in the processed food when ready to eat is not
             844      greater than the tolerance prescribed for the raw agricultural commodity;
             845          (c) if it consists in whole or in part of a diseased, contaminated, filthy, putrid, or
             846      decomposed substance, or if it is otherwise unfit for food;
             847          (d) if it has been produced, prepared, packed, or held under unsanitary conditions
             848      whereby it may have become contaminated with filth, or whereby it may have been rendered
             849      diseased, unwholesome, or injurious to health;
             850          (e) if it is, in whole or in part, the product of a diseased animal or an animal that has
             851      died otherwise than by slaughter, or of an animal that has been fed upon the uncooked offal
             852      from a slaughterhouse;
             853          (f) if its container is composed, in whole or in part, of any poisonous or deleterious
             854      substance that may render the contents injurious to health;
             855          (g) if it has been intentionally subjected to radiation, unless the use of the radiation was
             856      in conformity with a rule or exemption in effect pursuant to Section 4-5-11 , or 21 U.S.C. Sec.
             857      348; or
             858          (h) in meat or meat products are adulterated:
             859          (i) if such products are in casings, packages, or wrappers through which any part of
             860      their contents can be seen and which, or the markings of which, are colored red or any other
             861      color so as to be misleading or deceptive with respect to the color, quality, or kind of such
             862      products to which they are applied; or
             863          (ii) if such products contain or bear any color additive;
             864          (2) (a) if any valuable constituent has been in whole or in part omitted or abstracted


             865      therefrom;
             866          (b) if any substance has been substituted wholly or in part therefor;
             867          (c) if damage or inferiority has been concealed in any manner; or
             868          (d) if any substance has been added or mixed or packed therewith so as to increase its
             869      bulk or weight, or reduce its quality or strength or make it appear better or of greater value than
             870      it is; or
             871          (3) if it is confectionery, and:
             872          (a) has partially or completely imbedded therein any nonnutritive object; provided that
             873      this Subsection (3)(a) [shall not] does not apply in the case of any nonnutritive objective if, in
             874      the judgment of the department such object is of practical functional value to the confectionery
             875      product and would not render the product injurious or hazardous to health;
             876          (b) bears or contains any alcohol other than alcohol not in excess of .05% by volume
             877      derived solely from the use of flavoring extracts; or
             878          (c) bears or contains any nonnutritive substance; provided, that this Subsection (3)(c)
             879      [shall not] does not apply to a safe nonnutritive substance that is in or on confectionery by
             880      reason of its use for some practical functional purpose in the manufacture, packaging, or
             881      storing of such confectionery if the use of the substance does not promote deception of the
             882      consumer or otherwise result in adulteration or misbranding in violation of this chapter.
             883          (4) The department may, for the purpose of avoiding or resolving uncertainty as to the
             884      application of Subsection (3)(c), issue rules allowing or prohibiting the use of particular
             885      nonnutritive substances.
             886          Section 18. Section 4-5-8 is amended to read:
             887           4-5-8. Misbranded food specified.
             888          (1) Food is misbranded if:
             889          (a) its label is false or misleading in any way;
             890          (b) its labeling or packaging fails to conform with the requirements of Section 4-5-15 ;
             891          (c) it is offered for sale under the name of another food;
             892          (d) its container is so made, formed, or filled with packing material or air as to be
             893      misleading; or
             894          (e) it fails to conform with any requirement specified in this section.
             895          (2) A food that is an imitation of another food [must] shall bear a label, in type of


             896      uniform size and prominence, stating the word "imitation," and, immediately thereafter, the
             897      name of the food imitated.
             898          (3) (a) A food in package form [must] shall bear a label containing:
             899          (i) the name and place of business of the manufacturer, packer, or distributor; and
             900          (ii) an accurate statement of the quantity of the contents in terms of weight, measure, or
             901      numerical count.
             902          (b) The statement required by Subsection (3)(a)(ii) [must] shall be separately and
             903      accurately stated in a uniform location upon the principal display panel of the label unless
             904      reasonable variations and exemptions for small packages are established by a rule made by the
             905      department.
             906          (c) A manufacturer or distributor of carbonated beverages who utilizes proprietary
             907      stock or a proprietary crown is exempt from Subsection (3)(a)(i) if he files with the department:
             908          (i) a sworn affidavit giving a full and complete description of each area within the state
             909      in which beverages of his manufacturing or distributing are to be distributed; and
             910          (ii) the name and address of the person responsible for compliance with this chapter
             911      within each of those areas.
             912          (4) Any word, statement, or other information required by this chapter to appear on the
             913      label or labeling [must] shall be:
             914          (a) prominently placed on the label;
             915          (b) conspicuous in comparison with other words, statements, designs, or devices in the
             916      labeling; and
             917          (c) in terms which render it likely to be read and understood by the ordinary individual
             918      under customary conditions of purchase and use.
             919          (5) If a food is represented as a food for which a definition and standard of identity has
             920      been prescribed by federal regulations or department rules as provided by Section 4-5-6 , it
             921      [must] shall:
             922          (a) conform to the definition and standard; and
             923          (b) have a label bearing:
             924          (i) the name of the food specified in the definition and standard; and
             925          (ii) insofar as may be required by the rules, the common names of optional ingredients,
             926      other than spices, flavorings, and colorings, present in the food.


             927          (6) If a food is represented as a food for which a standard of quality has been
             928      prescribed by federal regulations or department rules as provided by Section 4-5-6 , and its
             929      quality falls below the standard, its label [must] shall bear, in the manner and form as the
             930      regulations or rules specify, a statement indicating that it falls below the standards.
             931          (7) If a food is represented as a food for which a standard of fill of container has been
             932      prescribed by federal regulations or department rules as provided by Section 4-5-6 , and it falls
             933      below the applicable standard of fill, its label [must] shall bear, in the manner and form as the
             934      regulations or rules specify, a statement indicating that it falls below the standard.
             935          (8) (a) Any food for which neither a definition nor standard of identity has been
             936      prescribed by federal regulations or department rules as provided by Section 4-5-6 [must] shall
             937      bear labeling clearly giving:
             938          (i) the common or usual name of the food, if any; and
             939          (ii) in case it is fabricated from two or more ingredients, the common or usual name of
             940      each ingredient, except that spices, flavorings, and colorings, other than those sold as such,
             941      may be designated as spices, flavorings, and colorings without naming each.
             942          (b) To the extent that compliance with the requirements of Subsection (8)(a)(ii) is
             943      impractical or results in deception or unfair competition, exemptions shall be established by
             944      rules made by the department.
             945          (9) If a food is represented as a food for special dietary uses, its label [must] shall bear
             946      the information concerning its vitamin, mineral, and other dietary properties as the department
             947      by rule prescribes.
             948          (10) If a food bears or contains any artificial flavoring, artificial coloring, or chemical
             949      preservatives, its label [must] shall state that fact. If compliance with the requirements of this
             950      subsection is impracticable, exemptions shall be established by rules made by the department.
             951          (11) The shipping container of any raw agricultural commodity bearing or containing a
             952      pesticide chemical applied after harvest [must] shall bear labeling which declares the presence
             953      of the chemical in or on the commodity and the common or usual name and function of the
             954      chemical. The declaration is not required while the commodity, having been removed from
             955      the shipping container, is being held or displaced for sale at retail out of the container in
             956      accordance with the custom of the trade.
             957          (12) A product intended as an ingredient of another food, when used according to the


             958      directions of the purveyor, may not result in the final food product being adulterated or
             959      misbranded.
             960          (13) The packaging and labeling of a color additive [must] shall be in conformity with
             961      the packaging and labeling requirements applicable to the color additive prescribed under the
             962      federal act.
             963          (14) Subsections (5), (8), and (10) with respect to artificial coloring do not apply to
             964      butter, cheese, or ice cream. Subsection (10) with respect to chemical preservatives does not
             965      apply to a pesticide chemical when used in or on a raw agricultural commodity.
             966          Section 19. Section 4-5-9 is amended to read:
             967           4-5-9. Registration of food establishments -- Fee -- Suspension and reinstatement
             968      of registration -- Inspection for compliance.
             969          (1) (a) Pursuant to Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             970      department shall establish rules providing for the registration of food establishments to protect
             971      public health and ensure a safe food supply.
             972          (b) The owner or operator of a food establishment shall register with the department
             973      before operating a food establishment.
             974          (c) Prior to granting a registration to the owner or operator of a food establishment, the
             975      department shall inspect and assess the food establishment to determine whether it complies
             976      with the rules established under Subsection (1)(a).
             977          (d) An applicant shall register with the department, in writing, using forms required by
             978      the department.
             979          (e) The department shall issue a registration to an applicant, if the department
             980      determines that the applicant meets the qualifications of registration established under
             981      Subsection (1)(a).
             982          (f) If the applicant does not meet the qualifications of registration, the department shall
             983      notify the applicant, in writing, that the applicant's registration is denied.
             984          (g) (i) If an applicant submits an incomplete application, a written notice of conditional
             985      denial of registration shall be provided to an applicant.
             986          (ii) The applicant [must] shall correct the deficiencies within the time period specified
             987      in the notice to receive a registration.
             988          (h) (i) The department may, as provided under Subsection 4-2-2 (2), charge the food


             989      establishment a registration fee.
             990          (ii) The department shall retain the fees as dedicated credits and shall use the fees to
             991      administer the registration of food establishments.
             992          (2) (a) A registration, issued under this section, shall be valid from the date the
             993      department issues the registration, to December 31 of the year the registration is issued.
             994          (b) A registration may be renewed for the following year by applying for renewal by
             995      December 31 of the year the registration expires.
             996          (3) A registration, issued under this section, shall specify:
             997          (a) the name and address of the food establishment;
             998          (b) the name of the owner or operator of the food establishment; and
             999          (c) the registration issuance and expiration date.
             1000          (4) (a) The department may immediately suspend a registration, issued under this
             1001      section, if any of the conditions of registration have been violated.
             1002          (b) (i) The holder of a registration suspended under Subsection (4)(a) may apply for the
             1003      reinstatement of a registration.
             1004          (ii) If the department determines that all registration requirements have been met, the
             1005      department shall reinstate the registration.
             1006          (5) (a) A food establishment, registered under this section, shall allow the department
             1007      to have access to the food establishment to determine if the food establishment is complying
             1008      with the registration requirements.
             1009          (b) If a food establishment denies access for an inspection required under Subsection
             1010      (5)(a), the department may suspend the food establishment's registration until the department is
             1011      allowed access to the food establishment's premises.
             1012          Section 20. Section 4-5-15 is amended to read:
             1013           4-5-15. Consumer commodities -- Labeling and packaging.
             1014          (1) All labels of consumer commodities, as defined by this chapter, shall conform with
             1015      the requirements for the declaration of net quantity of contents of 15 U.S.C. Sec. 1453 and the
             1016      regulations promulgated pursuant thereto: provided, that consumer commodities exempted
             1017      from 15 U.S.C. Sec. 1453(4) shall also be exempt from this Subsection (1).
             1018          (2) The label of any package of a consumer commodity that bears a representation as to
             1019      the number of servings of the commodity contained in the package shall bear a statement of the


             1020      net quantity in terms of weight, measure, or numerical count for each serving.
             1021          (3) (a) No person shall distribute or cause to be distributed in commerce any packaged
             1022      consumer commodity if any qualifying words or phrases appear in conjunction with the
             1023      separate statement of the net quantity of contents required by Subsection (1), but nothing in this
             1024      section shall prohibit supplemental statements, at other places on the package, describing in
             1025      nondeceptive terms the net quantity of contents.
             1026          (b) Supplemental statements of net quantity of contents may not include any term
             1027      qualifying a unit of weight, measure, or count that tends to exaggerate the amount of the
             1028      commodity contained in the package.
             1029          (4) (a) Whenever the department determines that rules other than those prescribed by
             1030      Subsection(1) are necessary to prevent the deception of consumers or to facilitate value
             1031      comparisons as to any consumer commodity, the department shall promulgate rules effective
             1032      to:
             1033          (i) establish and define standards for the characterization of the size of a package
             1034      enclosing any consumer commodity, which may be used to supplement the label statement of
             1035      net quantity of contents of packages containing the commodity, but this Subsection (4) [shall
             1036      not be construed as authorizing] does not authorize any limitation on the size, shape, weight,
             1037      dimensions, or number of packages that may be used to enclose any commodity;
             1038          (ii) regulate the placement upon any package containing any commodity, or upon any
             1039      label affixed to a commodity, of any printed matter stating or representing by implication that
             1040      the commodity is offered for retail sale at a price lower than the ordinary and customary retail
             1041      sale price or that a retail sale price advantage is accorded to purchasers by reason of the size of
             1042      that package or the quantity of its contents;
             1043          (iii) require that the label on each package of a consumer commodity bear:
             1044          (A) the common or usual name of such consumer commodity, if any; and
             1045          (B) if the consumer commodity consists of two or more ingredients, the common or
             1046      usual name of each such ingredient listed in order of decreasing predominance, but nothing in
             1047      this Subsection (4) shall be considered to require that any trade secret be divulged; or
             1048          (iv) prevent the nonfunctional slack-fill of packages containing consumer
             1049      commodities.
             1050          (b) For the purposes of Subsection (4)(a)(iv), a package is nonfunctionally slack-filled


             1051      if it is filled to substantially less than its capacity for reasons other than:
             1052          (i) protection of the contents of such package; or
             1053          (ii) the requirements of machines used for enclosing the contents in such package;
             1054      provided, that the department may adopt any rules promulgated according to the Fair Packaging
             1055      and Labeling Act, 15 U.S.C. Sec. 1453.
             1056          Section 21. Section 4-5-18 is amended to read:
             1057           4-5-18. Inspection of premises and records -- Authority to take samples --
             1058      Inspection results reported.
             1059          (1) An authorized agent of the department upon presenting appropriate credentials to
             1060      the owner, operator, or agent in charge, may:
             1061          (a) enter at reasonable times any factory, warehouse, or establishment in which food is
             1062      manufactured, processed, packed, or held for introduction into commerce or after introduction
             1063      into commerce;
             1064          (b) enter any vehicle being used to transport or hold food in commerce;
             1065          (c) inspect at reasonable times and within reasonable limits and in a reasonable manner
             1066      any factory, warehouse, establishment, or vehicle and all pertinent equipment, finished and
             1067      unfinished materials, containers, and labeling located within it;
             1068          (d) obtain samples necessary for the enforcement of this chapter so long as the
             1069      department pays the posted price for the sample if requested to do so and receives a signed
             1070      receipt from the person from whom the sample is taken;
             1071          (e) have access to and copy all records of carriers in commerce showing:
             1072          (i) the movement in commerce of any food;
             1073          (ii) the holding of food during or after movement in commerce; and
             1074          (iii) the quantity, shipper, and consignee of food.
             1075          (2) Evidence obtained under this section may not be used in a criminal prosecution of
             1076      the person from whom the evidence was obtained.
             1077          (3) Carriers may not be subject to the other provisions of this chapter by reason of their
             1078      receipt, carriage, holding, or delivery of food in the usual course of business as carriers.
             1079          (4) Upon completion of the inspection of a factory, warehouse, consulting laboratory,
             1080      or other establishment and prior to leaving the premises, the authorized agent making the
             1081      inspection shall give to the owner, operator, or agent in charge a report in writing setting forth


             1082      any conditions or practices observed by him which in his judgment indicate that any food in the
             1083      establishment:
             1084          (a) consists in whole or in part of any filthy, putrid, or decomposed substance; or
             1085          (b) has been prepared, packed, or held under unsanitary conditions whereby it may
             1086      have become contaminated with filth or whereby it may have been rendered injurious to health.
             1087          (5) A copy of the report [must] shall be sent promptly to the department.
             1088          (6) If the authorized agent making the inspection of a factory, warehouse, or other
             1089      establishment has obtained any sample in the course of the inspection, the agent shall give to
             1090      the owner, operator, or agent in charge a receipt describing the samples obtained.
             1091          (7) When in the course of the inspection the officer or employee making the inspection
             1092      obtains a sample of any food and an analysis is made of the sample for the purpose of
             1093      ascertaining whether the food consists in whole or in part of any filthy, putrid, or decomposed
             1094      substance or is otherwise unfit for food, a copy of the results of the analysis [must] shall be
             1095      furnished promptly to the owner, operator, or agent in charge.
             1096          Section 22. Section 4-7-8 is amended to read:
             1097           4-7-8. Applicant for dealer's license to post security -- Increase in amount of
             1098      security posted -- Action on security authorized -- Duties of commissioner -- Option to
             1099      require posting new security if action filed -- Effect of failure to post new security --
             1100      Commissioner's authority to call bond if not renewed.
             1101          (1) (a) Before a license is issued to a dealer, the applicant [must] shall post a corporate
             1102      surety bond, irrevocable letter of credit, trust fund agreement, or any other security agreement
             1103      considered reasonable in an amount not less than $10,000 nor more than $200,000, as
             1104      determined by the commissioner or as required by the Packers and Stockyards Act, 1921, 7
             1105      U.S.C. Section 181 et seq.
             1106          (b) Any bond shall be written by a surety licensed under the laws of Utah and name the
             1107      state, as obligee, for the use and benefit of producers.
             1108          (c) The bond or other security posted shall be conditioned upon:
             1109          (i) the faithful performance of contracts and the faithful accounting for and handling of
             1110      any product of agriculture consigned to the dealer;
             1111          (ii) the performance of the obligations imposed under this chapter; and
             1112          (iii) the payment of court costs and attorney's fees to the prevailing party incident to


             1113      any suit upon the bond or other security posted.
             1114          (2) (a) The commissioner may require a dealer who is issued a license to increase the
             1115      amount of the bond or other security posted under Subsection (1)(a) if the commissioner
             1116      determines the bond or other security posted is inadequate to secure performance of the dealer's
             1117      obligations.
             1118          (b) The commissioner shall notify the Packers and Stockyards Administration of an
             1119      increase made under Subsection (2)(a).
             1120          (c) The commissioner may suspend a dealer's license for failure to comply with
             1121      Subsection (2)(a) within 10 days after notice is given to the dealer.
             1122          (3) A consignor claiming damages, as a result of fraud, deceit, or willful negligence by
             1123      a dealer or as a result of the dealer's failure to comply with this chapter, may bring an action
             1124      upon the bond or other security posted for damages against both the principal and surety.
             1125          (4) (a) If it is reported to the department by a consignor that a dealer has failed to pay
             1126      in a timely manner for any product of agriculture received for sale, the commissioner shall:
             1127          (i) ascertain the name and address of each consignor who is a creditor of the dealer;
             1128      and
             1129          (ii) request a verified written statement setting forth the amount claimed due from the
             1130      dealer.
             1131          (b) Upon receipt of the verified statements, the commissioner shall bring an action
             1132      upon the bond or other security posted on behalf of the consignors who claim amounts due
             1133      from the dealer.
             1134          (5) (a) If an action is filed upon the bond or other security posted, the commissioner
             1135      may require the filing of new security.
             1136          (b) Immediately upon recovery in the action, the commissioner shall require the dealer
             1137      to file a new bond or other security.
             1138          (c) Failure, in either case, to file the bond or other security within 10 days after demand
             1139      is cause for suspension of the license until a new bond or other security is filed.
             1140          (d) If the bond or other security posted under this section is not renewed within 10 days
             1141      of its expiration date, unless the commissioner states in writing that this is unnecessary, the
             1142      commissioner may obtain, after a hearing, the full amount of the bond or other security before
             1143      it expires.


             1144          Section 23. Section 4-7-11 is amended to read:
             1145           4-7-11. Department authority -- Examination and investigation of transactions --
             1146      Notice of agency action upon probable cause -- Settlement of disputes -- Cease and desist
             1147      order -- Enforcement -- Review.
             1148          (1) For the purpose of enforcing this chapter the department may, upon its own motion,
             1149      or shall, upon the verified complaint of an interested consignor, investigate, examine, or
             1150      inspect any transaction involving:
             1151          (a) the solicitation, receipt, sale, or attempted sale of any product of agriculture by a
             1152      dealer or person assuming to act as a dealer;
             1153          (b) the failure to make a correct account of sales;
             1154          (c) the intentional making of a false statement about market conditions or the condition
             1155      or quantity of any product of agriculture consigned;
             1156          (d) the failure to remit payment in a timely manner to the consignor as required by
             1157      contract or by this chapter;
             1158          (e) any other consignment transaction alleged to have resulted in damage to the
             1159      consignor; or
             1160          (f) any dealer or agent with an unsatisfied judgment by a civil court related to an
             1161      activity for which licensing is required by this chapter.
             1162          (2) (a) After investigation upon its own motion, if the department determines that
             1163      probable cause exists to believe that a dealer has engaged or is engaging in acts that violate this
             1164      chapter, it shall issue a notice of agency action.
             1165          (b) (i) Upon the receipt of a verified complaint, the department shall undertake to effect
             1166      a settlement between the consignor and the dealer.
             1167          (ii) If a settlement cannot be effected, the department shall treat the verified complaint
             1168      as a request for agency action.
             1169          (3) (a) In a hearing upon a verified complaint, if the commissioner, or hearing officer
             1170      designated by the commissioner, determines by a preponderance of the evidence that the person
             1171      complained of has violated this chapter and that the violation has resulted in damage to the
             1172      complainant, the officer shall:
             1173          (i) prepare written findings of fact detailing the findings and fixing the amount of
             1174      damage suffered; and


             1175          (ii) order the defendant to pay damages.
             1176          (b) In a hearing initiated upon the department's own motion, if the commissioner or
             1177      hearing officer determines by a preponderance of the evidence that the person complained of by
             1178      the department has engaged in, or is engaging in, acts that violate this chapter, the
             1179      commissioner or officer shall prepare written findings of fact and an order requiring the person
             1180      to cease and desist from the activity.
             1181          (4) The department may petition any court having jurisdiction in the county where the
             1182      action complained of occurred to enforce its order.
             1183          (5) Any dealer aggrieved by an order issued under this section may obtain judicial
             1184      review of the order.
             1185          (6) (a) The department may not act upon a verified complaint submitted to the
             1186      department more than six months after the consignor allegedly suffered damage.
             1187          (b) A livestock claim [must] shall be made in writing within 120 days from the date of
             1188      the transaction.
             1189          Section 24. Section 4-9-15 is amended to read:
             1190           4-9-15. Registration of commercial establishments using weights and measures --
             1191      Approved weights and measures inspectors -- Application -- Fee -- Expiration -- Renewal.
             1192          (1) (a) Pursuant to Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1193      department shall establish rules providing for the registration of weights and measures users
             1194      and issuance of certification of weights and measures devices to ensure the use of correct
             1195      weights and measures in commerce or trade.
             1196          (b) The division may:
             1197          (i) determine whether weights and measures are correct through:
             1198          (A) inspection and testing by department employees; or
             1199          (B) acceptance of an inspection and testing report prepared by a registered weights and
             1200      measures service person;
             1201          (ii) establish standards and qualifications for registered weights and measures service
             1202      persons; and
             1203          (iii) determine the form and content of an inspection and testing report.
             1204          (c) A weights and measures user shall register with the department.
             1205          (d) Prior to granting a registration to a weights and measures user, the department shall


             1206      determine whether the weights and measures user complies with the rules established under
             1207      Subsection (1)(a).
             1208          (e) An applicant shall register with the department, in writing, using forms required by
             1209      the department.
             1210          (f) The department shall issue a registration to an applicant, if the department
             1211      determines that the applicant meets the qualifications of registration established under
             1212      Subsection (1)(a).
             1213          (g) If the applicant does not meet the qualifications of registration, the department shall
             1214      notify the applicant, in writing, that the applicant's registration is denied.
             1215          (h) (i) If an applicant submits an incomplete application, a written notice of conditional
             1216      denial of registration shall be provided to an applicant.
             1217          (ii) The applicant [must] shall correct the deficiencies within the time period specified
             1218      in the notice to receive a registration.
             1219          (i) (i) The department may, as provided under Subsection 4-2-2 (2), charge the weights
             1220      and measures user a registration fee.
             1221          (ii) The department shall retain the fees as dedicated credits and shall use the fees to
             1222      administer the registration of weights and measures users.
             1223          (2) (a) A registration, issued under this section, shall be valid from the date the
             1224      department issues the registration, to December 31 of the year the registration is issued.
             1225          (b) A registration may be renewed for the following year by applying for renewal by
             1226      December 31 of the year the registration expires.
             1227          (3) A registration, issued under this section, shall specify:
             1228          (a) the name and address of the weights and measures user;
             1229          (b) the registration issuance and expiration date; and
             1230          (c) the number and type of weights and measures devices to be certified.
             1231          (4) (a) The department may immediately suspend a registration, issued under this
             1232      section, if any of the requirements of Section 4-9-12 are violated.
             1233          (b) (i) The holder of a registration suspended under Subsection (4)(a) may apply for the
             1234      reinstatement of a registration.
             1235          (ii) If the department determines that all requirements under Section 4-9-12 are being
             1236      met, the department shall reinstate the registration.


             1237          (5) (a) A weights and measures user, registered under this section, shall allow the
             1238      department access to the weights and measures user's place of business to determine if the
             1239      weights and measures user is complying with the registration requirements.
             1240          (b) If a weights and measures user denies access for an inspection required under
             1241      Subsection (5)(a), the department may suspend the weights and measures user's registration
             1242      until the department is allowed access to the weights and measures user's place of business.
             1243          Section 25. Section 4-14-3 is amended to read:
             1244           4-14-3. Registration required for distribution -- Application -- Fees -- Renewal --
             1245      Local needs registration -- Distributor or applicator license -- Fees -- Renewal.
             1246          (1) (a) No person may distribute a pesticide in this state that is not registered with the
             1247      department.
             1248          (b) Application for registration shall be made to the department upon forms prescribed
             1249      and furnished by it accompanied with an annual registration fee determined by the department
             1250      pursuant to Subsection 4-2-2 (2) for each pesticide registered.
             1251          (c) Upon receipt by the department of a proper application and payment of the
             1252      appropriate fee, the commissioner shall issue a registration to the applicant allowing
             1253      distribution of the registered pesticide in this state through June 30 of each year, subject to
             1254      suspension or revocation for cause.
             1255          (d) (i) Each registration is renewable for a period of one year upon the payment of an
             1256      annual registration renewal fee in an amount equal to the current applicable original
             1257      registration fee.
             1258          (ii) Each renewal fee shall be paid on or before June 30 of each year.
             1259          (2) The application shall include the following information:
             1260          (a) the name and address of the applicant and the name and address of the person
             1261      whose name will appear on the label, if other than the applicant's name;
             1262          (b) the name of the pesticide;
             1263          (c) a complete copy of the label which will appear on the pesticide; and
             1264          (d) any information prescribed by rule of the department considered necessary for the
             1265      safe and effective use of the pesticide.
             1266          (3) (a) Forms for the renewal of registration shall be mailed to registrants at least 30
             1267      days before their registration expires.


             1268          (b) A registration in effect on June 30 for which a renewal application has been filed
             1269      and the registration fee tendered shall continue in effect until the applicant is notified either
             1270      that the registration is renewed or that it is suspended or revoked pursuant to Section 4-14-8 .
             1271          (4) The department may, before approval of any registration, require the applicant to
             1272      submit the complete formula of any pesticide including active and inert ingredients and may
             1273      also, for any pesticide not registered according to 7 U.S.C. Sec. 136a or for any pesticide on
             1274      which restrictions are being considered, require a complete description of all tests and test
             1275      results that support the claims made by the applicant or the manufacturer of the pesticide.
             1276          (5) A registrant who desires to register a pesticide to meet special local needs
             1277      according to 7 U.S.C. Sec. 136v(c) shall, in addition to complying with Subsections (1) and
             1278      (2), satisfy the department that:
             1279          (a) a special local need exists;
             1280          (b) the pesticide warrants the claims made for it;
             1281          (c) the pesticide, if used in accordance with commonly accepted practices, will not
             1282      cause unreasonable adverse effects on the environment; and
             1283          (d) the proposed classification for use conforms with 7 U.S.C. Sec. 136a(d).
             1284          (6) No registration is required for a pesticide distributed in this state pursuant to an
             1285      experimental use permit issued by the EPA or under Section 4-14-5 .
             1286          (7) No pesticide dealer may distribute a restricted use pesticide in this state without a
             1287      license.
             1288          (8) A person [must] shall receive a license before applying:
             1289          (a) a restricted use pesticide; or
             1290          (b) a general use pesticide for hire or in exchange for compensation.
             1291          (9) (a) A license to engage in an activity listed in Subsection (7) or (8) may be obtained
             1292      by:
             1293          (i) submitting an application on a form provided by the department;
             1294          (ii) paying the license fee determined by the department according to Subsection
             1295      4-2-2 (2); and
             1296          (iii) complying with the rules adopted as authorized by this chapter.
             1297          (b) A person may apply for a license that expires on December 31:
             1298          (i) of the calendar year in which the license is issued; or


             1299          (ii) of the second calendar year after the calendar year in which the license is issued.
             1300          (c) (i) Notwithstanding Section 63J-1-504 , the department shall retain the fees as
             1301      dedicated credits and may only use the fees to administer and enforce this chapter.
             1302          (ii) The Legislature may annually designate the revenue generated from the fee as
             1303      nonlapsing in an appropriations act.
             1304          Section 26. Section 4-15-2 is amended to read:
             1305           4-15-2. Definitions.
             1306          As used in this chapter:
             1307          (1) "Balled and burlapped stock" means nursery stock which is removed from the
             1308      growing site with a ball of soil containing its root system intact and encased in burlap or other
             1309      material to hold the soil in place;
             1310          (2) "Bare-root stock" means nursery stock which is removed from the growing site
             1311      with the root system free of soil;
             1312          (3) "Container stock" means nursery stock which is transplanted in soil or in a potting
             1313      mixture contained within a metal, clay, plastic, or other rigid container for a period sufficient to
             1314      allow newly developed fibrous roots to form so that if the plant is removed from the container
             1315      its root-media ball will remain intact;
             1316          (4) "Etiolated growth" means bleached and unnatural growth resulting from the
             1317      exclusion of sunlight;
             1318          (5) "Minimum indices of vitality" mean standards adopted by the department to
             1319      determine the health and vigor of nursery stock offered for sale in this state;
             1320          (6) "Nonestablished container stock" means deciduous nursery stock which is
             1321      transplanted in soil or in a potting mixture contained within a metal, clay, plastic, or other rigid
             1322      container for a period insufficient to allow the formation of fibrous roots sufficient to form a
             1323      root-media ball;
             1324          (7) "Nursery" means any place where nursery stock is propagated and grown for sale or
             1325      distribution;
             1326          (8) "Nursery outlet" means any place or location where nursery stock is offered for
             1327      wholesale or retail sale;
             1328          (9) "Nursery stock" means all plants, whether field grown, container grown, or
             1329      collected native plants; trees, shrubs, vines, grass sod; seedlings, perennials, biennials; and


             1330      buds, cuttings, grafts, or scions grown or collected or kept for propagation, sale, or distribution;
             1331      except that it [shall not mean] does not include dormant bulbs, tubers, roots, corms, rhizomes,
             1332      pips; field, vegetable, or flower seeds; or bedding plants, annual plants, florists' greenhouse or
             1333      field-grown plants, flowers or cuttings;
             1334          (10) "Place of business" means each separate nursery, or nursery outlet, where nursery
             1335      stock is offered for sale, sold, or distributed;
             1336          (11) "Packaged stock" means bare-root stock which is packed either in bundles or in
             1337      single plants with the roots in some type of moisture-retaining material designed to retard
             1338      evaporation and hold the moisture-retaining material in place.
             1339          Section 27. Section 4-15-10 is amended to read:
             1340           4-15-10. Infested or diseased stock not to be offered for sale -- Identification of
             1341      "nonestablished container stock" -- Requirements for container stock -- Inspected and
             1342      certified stock only to be offered for sale -- Prohibition against coating aerial plant
             1343      surfaces.
             1344          (1) Nursery stock which is infested with plant pests, including noxious weeds, or
             1345      infected with disease or which does not meet minimum indices of vitality [shall not] may not
             1346      be offered for sale.
             1347          (2) All nonestablished container stock offered for sale shall be identified by the words
             1348      "nonestablished container stock" legibly printed on a water resistant tag which states the length
             1349      of time it has been planted or the date it was planted and [shall not] may not be offered for sale
             1350      in any manner which leads a purchaser to believe it is container stock.
             1351          (3) All container stock offered for sale shall be established with a root-media mass that
             1352      will retain its shape and hold together when removed from the container.
             1353          (4) No nursery stock other than officially inspected and certified stock shall be offered
             1354      for wholesale or retail sale in this state.
             1355          (5) Colored waxes or other materials which coat the aerial parts of a plant and change
             1356      the appearance of the plant surface are prohibited.
             1357          Section 28. Section 4-17-7 is amended to read:
             1358           4-17-7. Notice of noxious weeds to be published annually in county -- Notice to
             1359      particular property owners to control noxious weeds -- Methods of prevention or control
             1360      specified -- Failure to control noxious weeds considered public nuisance.


             1361          (1) Each county weed control board before May 1 of each year shall post a general
             1362      notice of the noxious weeds within the county in at least three public places within the county
             1363      and publish the same notice on:
             1364          (a) at least three occasions in a newspaper or other publication of general circulation
             1365      within the county; and
             1366          (b) as required in Section 45-1-101 .
             1367          (2) If the county weed control board determines that particular property within the
             1368      county requires prompt and definite attention to prevent or control noxious weeds, it shall serve
             1369      the owner or the person in possession of the property, personally or by certified mail, a notice
             1370      specifying when and what action [should] is required to be taken on the property. Methods of
             1371      prevention or control may include definite systems of tillage, cropping, use of chemicals, and
             1372      use of livestock.
             1373          (3) An owner or person in possession of property who fails to take action to control or
             1374      prevent the spread of noxious weeds as specified in the notice is maintaining a public nuisance.
             1375          Section 29. Section 4-22-3 is amended to read:
             1376           4-22-3. Commission -- Organization -- Quorum to transact business -- Vacancies
             1377      -- Ineligibility to serve -- Compensation.
             1378          (1) The members of the commission shall elect a chair, vice chair, and secretary from
             1379      among their number.
             1380          (2) Attendance of a simple majority of the commission members at a called meeting
             1381      shall constitute a quorum for the transaction of official business.
             1382          (3) The commission shall meet:
             1383          (a) at the time and place designated by the chair; and
             1384          (b) no less often than once every three months.
             1385          (4) Vacancies which occur on the commission for any reason shall be filled for the
             1386      unexpired term of the vacated member by appointment of a majority of the remaining
             1387      members.
             1388          (5) If a member moves from the district that he represents or ceases to act as a producer
             1389      during his term of office, he [must] shall resign from the commission within 30 days after
             1390      moving from the district or ceasing production.
             1391          (6) (a) (i) Members who are not government employees shall receive no compensation


             1392      or benefits for their services, but may receive per diem and expenses incurred in the
             1393      performance of the member's official duties at the rates established by the Division of Finance
             1394      under Sections 63A-3-106 and 63A-3-107 .
             1395          (ii) Members may decline to receive per diem and expenses for their service.
             1396          (b) (i) State government officer and employee members who do not receive salary, per
             1397      diem, or expenses from their agency for their service may receive per diem and expenses
             1398      incurred in the performance of their official duties from the commission at the rates established
             1399      by the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
             1400          (ii) State government officer and employee members may decline to receive per diem
             1401      and expenses for their service.
             1402          (c) (i) Higher education members who do not receive salary, per diem, or expenses
             1403      from the entity that they represent for their service may receive per diem and expenses incurred
             1404      in the performance of their official duties from the committee at the rates established by the
             1405      Division of Finance under Sections 63A-3-106 and 63A-3-107 .
             1406          (ii) Higher education members may decline to receive per diem and expenses for their
             1407      service.
             1408          Section 30. Section 4-22-6 is amended to read:
             1409           4-22-6. Commission to conduct elections -- Nomination of candidates -- Expenses
             1410      of election paid by commission.
             1411          (1) (a) The commissioner shall administer all commission elections.
             1412          (b) The commissioner shall mail a ballot to each producer within the district in which
             1413      an election is to be held by May 15 of each election year.
             1414          (c) The candidate who receives the highest number of votes cast in the candidate's
             1415      district shall be elected.
             1416          (d) The commissioner shall determine all questions of eligibility.
             1417          (e) A ballot [must] shall be postmarked by May 31 of an election year.
             1418          (f) (i) All ballots received by the commissioner shall be counted and tallied by June 15.
             1419          (ii) A member of the commission whose name appears on a ballot may not participate
             1420      in counting or tallying the ballots.
             1421          (2) (a) Candidates for election to the commission shall be nominated, not later than
             1422      April 15, by a petition signed by five or more producers who are residents of the district in


             1423      which the election is to be held.
             1424          (b) If two or more candidates are not nominated by petition, the commission shall
             1425      select a nominating committee composed of three producers who are residents of the district
             1426      who shall select the candidates not nominated by petition.
             1427          (3) The names of all nominees, whether nominated by petition or by a nominating
             1428      committee, shall be submitted to the commissioner on or before May 1 of each year in which
             1429      an election is held.
             1430          (4) All election expenses incurred by the commissioner shall be paid by the
             1431      commission.
             1432          Section 31. Section 4-23-5 is amended to read:
             1433           4-23-5. Board responsibilities -- Damage prevention policy -- Rules -- Methods to
             1434      control predators and depredating birds and animals.
             1435          (1) The board is responsible for the formulation of the agricultural and wildlife damage
             1436      prevention policy of the state and in conjunction with its responsibility may, consistent with
             1437      Title 63G, Chapter 3, Utah Administrative Rulemaking Act, adopt rules to implement its policy
             1438      which shall be administered by the department.
             1439          (2) In its policy deliberations the board shall:
             1440          (a) specify programs designed to prevent damage to livestock, poultry, and agricultural
             1441      crops; and
             1442          (b) specify methods for the prevention of damage and for the selective control of
             1443      predators and depredating birds and animals including[, but not limited to,] hunting, trapping,
             1444      chemical toxicants, and the use of aircraft.
             1445          (3) The board may also:
             1446          (a) specify bounties on designated predatory animals and recommend procedures for
             1447      the payment of bounty claims, recommend bounty districts, recommend persons not authorized
             1448      to receive bounty, and recommend to the department other actions it considers advisable for the
             1449      enforcement of its policies; and
             1450          (b) cooperate with federal, state, and local governments, educational institutions, and
             1451      private persons or organizations, through agreement or otherwise, to effectuate its policies.
             1452          Section 32. Section 4-23-6 is amended to read:
             1453           4-23-6. Department to issue licenses and permits -- Department to issue aircraft


             1454      use permits -- Reports.
             1455          The department is responsible for the issuance of permits and licenses for the purposes
             1456      of the federal Fish and Wildlife Act of 1956. No state agency or private person shall use any
             1457      aircraft for the prevention of damage without first obtaining a use permit from the department.
             1458      A state agency which contemplates the use of aircraft for the protection of agricultural crops,
             1459      livestock, poultry, or wildlife shall file an application with the department for an aircraft use
             1460      permit to enable the agency to issue licenses to personnel within the agency charged with the
             1461      responsibility to protect such resources. Persons who desire to use privately owned aircraft for
             1462      the protection of land, water, crops, wildlife, or livestock [shall not] may not engage in any
             1463      such protective activity without first obtaining an aircraft permit from the department.
             1464      Agencies and private persons which obtain aircraft use permits shall file such reports with the
             1465      department as it deems necessary in the administration of its licensing authority.
             1466          Section 33. Section 4-23-8 is amended to read:
             1467           4-23-8. Proceeds of sheep fee -- Refund of sheep fees -- Annual audit of books,
             1468      records, and accounts.
             1469          (1) (a) The commissioner may spend an amount not to exceed the equivalent of 16
             1470      cents per head each year from the proceeds collected from the fee imposed on sheep for the
             1471      promotion, advancement, and protection of the sheep interests of the state.
             1472          (b) All costs to promote or advance sheep interests shall be deducted from the total
             1473      revenue collected before calculating the annual budget request, which shall be made by the
             1474      Division of Wildlife Resources as specified in Section 4-23-9 .
             1475          (c) A sheep fee is refundable in an amount equal to that part of the fee used to promote,
             1476      advance, or protect sheep interests.
             1477          (d) A refund claim [must] shall be filed with the department on or before January 1 of
             1478      the year immediately succeeding the year for which the fee was paid.
             1479          (e) A refund claim [must] shall be certified by the department to the state treasurer for
             1480      payment from the Agricultural and Wildlife Damage Prevention Account created in Section
             1481      4-23-7.5 .
             1482          (2) Any expense incurred by the department in administering refunds shall be paid
             1483      from funds allocated for the promotion, advancement, and protection of the sheep interests of
             1484      the state.


             1485          (3) (a) The books, records, and accounts of the Utah Woolgrowers Association, or any
             1486      other organization which receives funds from the agricultural and wildlife damage prevention
             1487      account, for the purpose of promoting, advancing, or protecting the sheep interests of the state,
             1488      shall be audited at least once annually by a licensed accountant.
             1489          (b) The results of this audit shall be submitted to the commissioner.
             1490          Section 34. Section 4-24-2 is amended to read:
             1491           4-24-2. Definitions.
             1492          As used in this chapter:
             1493          (1) "Brand" means any identifiable mark applied to livestock which is intended to show
             1494      ownership.
             1495          (2) "Carcass" means any part of the body of an animal, including [but not limited to]
             1496      hides, entrails, and edible meats.
             1497          (3) "Domesticated elk" shall have the meaning as defined in Section 4-39-102 .
             1498          (4) "Hide" means any skins or wool removed from livestock.
             1499          (5) "Livestock" means cattle, calves, horses, mules, sheep, goats, hogs, or domesticated
             1500      elk.
             1501          (6) (a) "Livestock market" means a public market place consisting of pens or other
             1502      enclosures where cattle, calves, horses, or mules are received on consignment and kept for
             1503      subsequent sale, either through public auction or private sale.
             1504          (b) "Livestock market" does not mean:
             1505          (i) a place used solely for liquidation of livestock by a farmer, dairyman, livestock
             1506      breeder, or feeder who is going out of business; or
             1507          (ii) a place where an association of livestock breeders under its own management,
             1508      offers registered livestock or breeding sires for sale and assumes all responsibility for the sale,
             1509      guarantees title to the livestock or sires sold, and arranges with the department for brand
             1510      inspection of all animals sold.
             1511          (7) "Mark" means any dulap, waddle, or cutting and shaping of the ears or brisket area
             1512      of livestock which is intended to show ownership.
             1513          (8) "Slaughterhouse" means any building, plant, or establishment where animals are
             1514      killed, dressed, or processed and their meat or meat products offered for sale for human
             1515      consumption.


             1516          Section 35. Section 4-24-12 is amended to read:
             1517           4-24-12. Livestock -- Verification of ownership through brand inspection --
             1518      Issuance of certificate of brand inspection -- Brand inspector may demand evidence of
             1519      ownership-- Brand inspection of livestock seized by the federal government prohibited --
             1520      Exception.
             1521          (1) A brand inspector, as an agent of the department, shall verify livestock ownership
             1522      by conducting a brand inspection during daylight hours.
             1523          (2) After conducting the brand inspection, the brand inspector, if satisfied that the
             1524      livestock subject to inspection bears registered brands or marks owned by the owner of the
             1525      livestock, shall issue a brand inspection certificate to the owner or owner's agent.
             1526          (3) The brand inspector shall record the number, sex, breed, and brand or mark on each
             1527      animal inspected together with the owner's name.
             1528          (4) If any livestock subject to inspection bears a brand or mark other than that of the
             1529      owner or, if no brand or mark appears on such livestock, the brand inspector may demand
             1530      evidence of ownership such as a bill of sale or other evidence of ownership before issuing a
             1531      brand inspection certificate.
             1532          (5) A brand inspector [shall not] may not issue a brand inspection certificate for any
             1533      privately owned livestock seized by the federal government unless:
             1534          (a) the brand inspector receives consent from the livestock's owner;
             1535          (b) the owner is unknown; or
             1536          (c) the brand inspector receives a copy of a court order authorizing the seizure.
             1537          Section 36. Section 4-24-20 is amended to read:
             1538           4-24-20. Livestock sold at market to be brand inspected -- Proceeds of sale may
             1539      be withheld -- Distribution of withheld proceeds -- Effect of receipt of proceeds by
             1540      department -- Deposit of proceeds -- Use of proceeds if ownership not established.
             1541          (1) Livestock [shall not] may not be sold at any livestock market until after they have
             1542      been brand inspected by the department. Title to purchased livestock shall be furnished to the
             1543      buyer by the livestock market.
             1544          (2) Upon notice from the department that a question exists concerning the ownership of
             1545      consigned livestock, the operator of the livestock market or meat packing plant shall withhold
             1546      the proceeds from the sale of the livestock for 60 days to allow the consignor of the questioned


             1547      livestock to establish ownership. If the owner or consignor fails within 60 days to establish
             1548      ownership to the satisfaction of the department, the proceeds of the sale shall be transmitted to
             1549      the department. Receipt of the proceeds by the department shall relieve the livestock market or
             1550      meat packing plant from further responsibility for the proceeds.
             1551          (3) Proceeds withheld under Subsection (2) shall be deposited in the Utah Livestock
             1552      Brand and Anti-Theft Account created in Section 4-24-24 . If ownership is not satisfactorily
             1553      established within one year, the department shall use the proceeds for animal identification.
             1554          Section 37. Section 4-26-5 is amended to read:
             1555           4-26-5. Adjoining landowners -- Partition fences -- Contribution.
             1556          If two or more persons agree to a fence enclosure or to the construction of a partition
             1557      fence, the cost of construction and maintenance of the fence shall be apportioned between each
             1558      party to the agreement based upon the amount of land enclosed. A person who is a party to
             1559      such agreement and who fails to maintain such person's part of the fence is liable in a civil
             1560      action for any damage sustained by another party to the agreement as a result of the failure to
             1561      maintain the fence. If a person has enclosed land with a fence and the owner of adjoining land
             1562      desires to enclose land adjoining the fence so that the existing fence or any part of it will
             1563      become a partition fence between such tracts of land, the owner of the adjoining land shall
             1564      before making the enclosure pay to the owner of the existing fence one-half of the value of all
             1565      that part of the fence that will become a partition fence; and when one party ceases to improve
             1566      or cultivate his land or opens his enclosure he [must not] may not take away any part of the
             1567      partition fence belonging to him, if the owner or occupant of the adjoining enclosure within 30
             1568      days after notice, pays for the value of such fence; nor shall the partition fence be removed if
             1569      the crops enclosed by it will be exposed to injury.
             1570          Section 38. Section 4-29-2 is amended to read:
             1571           4-29-2. Restrictions on importation of chickens, turkeys, chicks, turkey poults,
             1572      and hatching eggs -- Certificate to accompany shipment -- Disposition of nonconforming
             1573      shipments.
             1574          (1) No chickens, turkeys, chicks, turkey poults, or hatching eggs to be used for breeding
             1575      purposes shall be imported to this state, or sold by hatcheries or others within this state unless
             1576      they originate from flocks participating in the pullorum control and eradication phase of the
             1577      National Poultry Improvement Plan, or the National Turkey Improvement Plan, or have passed


             1578      a negative agglutination blood test for pullorum disease administered under the supervision of
             1579      the department within 12 months prior to the date of sale.
             1580          (2) Baby chicks, turkey poults, or hatching eggs to be used for purposes other than
             1581      breeding [shall not] may not be imported to this state, or sold by hatcheries or others within this
             1582      state unless they originate from flocks participating in the pullorum control and eradication
             1583      phase of the National Poultry Improvement Plan, or the National Turkey Improvement Plan, or
             1584      have passed a negative agglutination blood test for pullorum disease administered under
             1585      supervision of the department within 12 months prior to the date of sale.
             1586          (3) A certificate issued by the appropriate authority of the "state of origin" shall
             1587      accompany each shipment of hatching eggs, baby chicks, poults, started chicks, started poults,
             1588      or chicken or turkey breed stock imported to this state. The certificate shall specify that the
             1589      contents of the shipment is free of pullorum or other poultry disease, the name and address of
             1590      the consignee in this state, the name and address of the person who consigned the poultry for
             1591      shipment, the name of the certifying authority in the state of origin, and the date the test or
             1592      inspection for pullorum was performed by such authority.
             1593          (4) The department may seize and destroy any shipment of chickens, chicks, turkeys,
             1594      poults, or hatching eggs transported into this state in contravention of this section without
             1595      notice to the person who consigned the poultry for shipment to this state, or it may return the
             1596      contents of the shipment to such person at the latter's expense.
             1597          Section 39. Section 4-30-7.6 is amended to read:
             1598           4-30-7.6. Custodial accounts for trust funds.
             1599          (1) (a) Each payment that a livestock buyer makes to a livestock market selling on
             1600      commission is a trust fund.
             1601          (b) Funds deposited in custodial accounts are trust funds.
             1602          (2) Each livestock market engaged in selling livestock on a commission or agency
             1603      basis shall establish and maintain a separate bank account designated as "custodial account for
             1604      shippers' proceeds" or some similar identifying designation, to disclose that the depositor is
             1605      acting as a fiduciary and that the funds in the account are trust funds.
             1606          (3) (a) The livestock market shall deposit in its custodial account before the close of
             1607      the next business day after the livestock is sold:
             1608          (i) the proceeds from the sale of the livestock that have been collected; and


             1609          (ii) an amount equal to the proceeds receivable from the sale of livestock that are due
             1610      from:
             1611          (A) the livestock market;
             1612          (B) any owner, officer, or employee of the livestock market; and
             1613          (C) any buyer to whom the livestock market has extended credit.
             1614          (b) The livestock market shall thereafter deposit in the custodial account all proceeds
             1615      collected until the account has been reimbursed in full, and shall, before the close of the
             1616      seventh day following the sale of livestock, deposit an amount equal to all the remaining
             1617      proceeds receivable whether or not the proceeds have been collected by the livestock market.
             1618          (4) The custodial account shall be drawn on only for payment of:
             1619          (a) the net proceeds to the consignor or shipper, or to any person that the livestock
             1620      market knows is entitled to payment;
             1621          (b) to pay lawful charges against the consignment of livestock which the market agency
             1622      shall, in its capacity as agent, be required to pay; and
             1623          (c) to obtain any sums due the livestock market as compensation for its services.
             1624          (5) (a) Each livestock market shall keep accounts and records that will disclose at all
             1625      times the handling of funds in the custodial account.
             1626          (b) Accounts and records [must] shall at all times disclose the name of the consignors
             1627      and the amount due and payable to each from funds in the custodial account.
             1628          (6) The custodial account [must] shall be established and maintained in a bank whose
             1629      deposits are insured by the Federal Deposit Insurance Corporation.
             1630          Section 40. Section 4-31-16 is amended to read:
             1631           4-31-16. Contagious or infectious disease -- Duties of department.
             1632          (1) (a) The department shall investigate and may quarantine any reported case of
             1633      contagious or infectious disease, or any epidemic, or poisoning affecting domestic animals or
             1634      any animal or animals that it believes may jeopardize the health of animals within the state.
             1635          (b) The department shall make a prompt and thorough examination of all
             1636      circumstances surrounding the disease, epidemic, or poisoning and may order quarantine, care,
             1637      or any necessary remedies.
             1638          (c) The department may also order immunization or testing and sanitary measures to
             1639      prevent the spread of disease.


             1640          (d) Investigations involving fish or wildlife shall be conducted under a cooperative
             1641      agreement with the Division of Wildlife Resources.
             1642          (2) (a) If the owner or person in possession of such animals, after written notice from
             1643      the department, fails to take the action ordered, the commissioner is authorized to seize and
             1644      hold the animals and take action necessary to prevent the spread of disease, including [but not
             1645      limited to:] immunization[;], testing[;], dipping[;], or spraying.
             1646          (b) Animals seized for testing or treatment under this section shall be sold by the
             1647      commissioner at public sale to reimburse the department for all costs incurred in the seizure,
             1648      testing, treatment, maintenance, and sale of such animals unless the owner sooner tenders
             1649      payment for the costs incurred by the department.
             1650          (c) (i) No seized animal shall be sold, however, until the owner or person in possession
             1651      is served with a notice specifying the itemized costs incurred by the department and the time,
             1652      place, and purpose of sale and the number of animals to be sold.
             1653          (ii) The notice shall be served at least three days in advance of sale in the manner:
             1654          (A) prescribed for personal service in Rule 4(d)(1), Utah Rules of Civil Procedure; or
             1655          (B) if the owner cannot be found after due diligence, in the manner prescribed for
             1656      service by publication in Rule 4(d)(4), Utah Rules of Civil Procedure.
             1657          (3) Any amount realized from the sale of the animals over the total charges shall be
             1658      paid to the owner of the animals if the owner is known or can by reasonable diligence be found;
             1659      otherwise, the excess shall be paid to the tuberculosis and Bangs Disease Control Account.
             1660          Section 41. Section 4-31-16.5 is amended to read:
             1661           4-31-16.5. Brucellosis -- Vaccination required for certain cattle -- Testing
             1662      required to import certain cattle.
             1663          (1) As used in this section, "test-eligible" has the meaning defined in 9 C.F.R. Sec.
             1664      78.1.
             1665          (2) (a) Instate origin replacement cattle that are kept for breeding stock [must] shall be
             1666      official calfhood vaccinated for brucellosis.
             1667          (b) Female cattle from within the state that are not kept for breeding stock will not be
             1668      required to be vaccinated.
             1669          (c) For purposes of this Subsection (2), the department may make rules in accordance
             1670      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, governing non-legible


             1671      brucellosis tattoos and may accept brucellosis vaccination record forms as evidence that
             1672      brucellosis vaccinations were performed.
             1673          (3) All female beef-breed cattle imported into the state are required to be official
             1674      calfhood vaccinated for brucellosis except female cattle:
             1675          (a) less than four months of age;
             1676          (b) going directly to slaughter;
             1677          (c) going to a qualified feedlot; or
             1678          (d) going to an approved auction to be vaccinated on arrival or designated for slaughter
             1679      only.
             1680          (4) (a) Test-eligible cattle imported from states designated as brucellosis-free under 9
             1681      C.F.R. Sec. 78.43 that are acquired directly from the farm of origin are not required to be tested
             1682      for brucellosis before movement into the state.
             1683          (b) Test-eligible cattle imported from states designated as brucellosis-free under 9
             1684      C.F.R. Sec. 78.43 that are acquired through trading channels [must] shall test negative for
             1685      brucellosis within 30 days before movement into the state.
             1686          (5) Test-eligible cattle imported from states that have not been designated as
             1687      brucellosis-free under 9 C.F.R. Sec. 78.43 [must] shall test negative for brucellosis within 30
             1688      days before movement into the state.
             1689          (6) The department may investigate situations where fees for brucellosis vaccinations
             1690      are considered to be excessive.
             1691          (7) The department may make rules in accordance with Title 63G, Chapter 3, Utah
             1692      Administrative Rulemaking Act, for beef-breed cattle that are acquired for specialized breeding
             1693      purposes, and may exempt those cattle from brucellosis vaccination requirements.
             1694          (8) The department shall make rules in accordance with Title 63G, Chapter 3, Utah
             1695      Administrative Rulemaking Act, to implement this section.
             1696          Section 42. Section 4-32-3 is amended to read:
             1697           4-32-3. Definitions.
             1698          As used in this chapter:
             1699          (1) "Adulterated" means any livestock product or poultry product that:
             1700          (a) bears or contains any poisonous or deleterious substance that may render it
             1701      injurious to health, but, if the substance is not an added substance, the livestock product [shall


             1702      not be] is not considered adulterated under this subsection if the quantity of the substance in or
             1703      on the livestock product does not ordinarily render it injurious to health;
             1704          (b) bears or contains, by reason of the administration of any substance to the livestock
             1705      or poultry or otherwise, any added poisonous or added deleterious substance which in the
             1706      judgment of the commissioner makes the livestock product unfit for human food;
             1707          (c) contains, in whole or in part, a raw agricultural commodity and such commodity
             1708      bears or contains a pesticide chemical that is unsafe within the meaning of 21 U.S.C. Sec.
             1709      346a;
             1710          (d) bears or contains any food additive that is unsafe within the meaning of 21 U.S.C.
             1711      Sec. 348;
             1712          (e) bears or contains any color additive that is unsafe within the meaning of 21 U.S.C.
             1713      Sec. 379e; provided, that a livestock product which is not otherwise considered adulterated
             1714      under Subsections (1)(c), (d), or (e) of this section shall nevertheless be considered adulterated
             1715      if use of the pesticide chemical, food additive, or color additive is prohibited in official
             1716      establishments by rules of the department;
             1717          (f) consists, in whole or in part, of any filthy, putrid, or decomposed substance or is for
             1718      any other reason unsound, unhealthful, unwholesome, or otherwise unfit for human food;
             1719          (g) has been prepared, packaged, or held under unsanitary conditions if it may have
             1720      become contaminated with filth, or if it may have been rendered injurious to health;
             1721          (h) is in whole or in part the product of an animal that has died otherwise than by
             1722      slaughter;
             1723          (i) is contained in a container that is composed, in whole or in part, of any poisonous or
             1724      deleterious substance that may render the meat product injurious to health;
             1725          (j) has been intentionally subjected to radiation, unless the use of the radiation was in
             1726      conformity with a regulation or exemption in effect pursuant to 21 U.S.C. Sec. 348;
             1727          (k) has a valuable constituent in whole or in part omitted, abstracted, or substituted; or
             1728      if damage or inferiority is concealed in any manner; or if any substance has been added, mixed,
             1729      or packed with the meat product to increase its bulk or weight, or reduce its quality or strength,
             1730      or to make it appear better or of greater value; or
             1731          (l) is margarine containing animal fat and any of the raw material used in the margarine
             1732      consists in whole or in part of any filthy, putrid, or decomposed substance.


             1733          (2) "Animal food manufacturer" means any person engaged in the business of
             1734      preparing animal food derived from livestock carcasses or parts or products of such carcasses.
             1735          (3) "Broker" means any person engaged in the business of buying or selling livestock
             1736      or livestock products on commission, or otherwise negotiating purchases or sales of livestock
             1737      or livestock products other than for such person's own account.
             1738          (4) "Capable of use as human food" means any livestock carcass, or part or product of
             1739      a carcass, unless it is denatured or otherwise identified as required by rules of the department to
             1740      deter its use as human food, or unless it is naturally inedible by humans.
             1741          (5) "Container" or "package" means any box, can, tin, cloth, plastic, or other receptacle,
             1742      wrapper, or cover.
             1743          (6) "Director of meat inspection" means a licensed graduate veterinarian whose duties
             1744      and responsibilities are specified by the commissioner.
             1745          (7) "Domesticated elk" shall have the meaning as defined in Section 4-39-102 .
             1746          (8) "Farm custom slaughter" means custom slaughtering of livestock or poultry for an
             1747      owner without inspection.
             1748          (9) "Farm custom slaughter permit" means a permit issued by the department to allow
             1749      farm custom slaughter.
             1750          (10) "Farm custom slaughter tag" means a tag which specifies the animal's
             1751      identification and certifies its ownership which is issued by the department through a brand
             1752      inspector to the owner of the animal before it is slaughtered.
             1753          (11) "Federal Food, Drug and Cosmetic Act" means the act so entitled, approved June
             1754      25, 1938 (52 Stat. 1040) (21 U.S.C. 301 et seq.), and any amendments to it.
             1755          (12) "Federal Meat Inspection Act" means the act so entitled approved March 4, 1907
             1756      (34 Stat. 1260), as amended by the Wholesome Meat Act, 21 U.S.C. 601 et seq.; the term
             1757      "federal Poultry Products Inspection Act" means the act so entitled approved August 28, 1957
             1758      71 Stat. 441, as amended by the Wholesome Poultry Products Act, 82 Stat. 791 21 U.S.C. 451
             1759      et seq.; and the term "federal acts" means these two federal acts.
             1760          (13) "Immediate container" means any consumer package, or any other container in
             1761      which livestock products not consumer packaged, are packed.
             1762          (14) "Inspector" means a licensed veterinarian or competent lay person working under
             1763      the supervision of a licensed graduate veterinarian.


             1764          (15) "Label" means a display of printed, or graphic matter upon any livestock or
             1765      poultry product or the immediate container, not including package liners, of any such product.
             1766          (16) "Labeling" means all labels and other printed, or graphic matter:
             1767          (a) upon any livestock product or any of its containers or wrappers; or
             1768          (b) accompanying a livestock product.
             1769          (17) "Livestock" means any cattle, domesticated elk, sheep, swine, goats, horses, mules
             1770      or other equines, whether living or dead.
             1771          (18) "Livestock product" means any carcass, part of a carcass, meat, or meat food
             1772      product of any livestock.
             1773          (19) "Meat food product" means any product capable of use as human food that is
             1774      made wholly or in part from any meat or other part of the carcass of any cattle, sheep, swine, or
             1775      goats, excepting products that contain meat or other parts of such carcasses in relatively small
             1776      proportion or that historically have not been considered by consumers as products of the meat
             1777      food industry, and which are exempted from definition as a meat food product by the
             1778      commissioner. Meat food product as applied to food products of equines shall have a meaning
             1779      comparable to that provided in this subsection with respect to cattle, sheep, swine, and goats.
             1780          (20) "Misbranded" means any livestock product or poultry product that:
             1781          (a) bears a label that is false or misleading in any particular;
             1782          (b) is offered for sale under the name of another food;
             1783          (c) is an imitation of another food, unless the label bears, in type of uniform size and
             1784      prominence, the word "imitation" followed by the name of the food imitated;
             1785          (d) if its container is so made, formed, or filled as to be misleading;
             1786          (e) does not bear a label showing:
             1787          (i) the name and place of business of the manufacturer, packer, or distributor; and
             1788          (ii) an accurate statement of the quantity of the product in terms of weight, measure, or
             1789      numerical count; provided, that under this Subsection (20)(e), exemptions as to livestock
             1790      products not in containers may be established by rules of the department and that under this
             1791      Subsection (20)(e)(ii), reasonable variations may be permitted, and exemptions for small
             1792      packages may be established for livestock or poultry products by rule of the department;
             1793          (f) does not bear any word, statement, or other information required by or under
             1794      authority of this chapter to appear on the label or other labeling is not prominently placed with


             1795      such conspicuousness, as compared with other words, statements, designs, or devices, in the
             1796      labeling, and in such terms as to render it likely to be read and understood by the ordinary
             1797      individual under customary conditions of purchase and use;
             1798          (g) is a food for which a definition and standard of identity or composition has been
             1799      prescribed by rules of the department under Section 4-32-7 if the food does not conform to
             1800      such definition and standard and the label does not bear the name of the food and any other
             1801      information that is required by the rule;
             1802          (h) is a food for which a standard of fill has been prescribed by rule of the department
             1803      for the container and the actual fill of the container falls below that prescribed unless its label
             1804      bears, in such manner and form as such rules specify, a statement that it falls below such
             1805      standard;
             1806          (i) is a food for which no standard or definition of identity has been prescribed under
             1807      Subsection (20)(g) unless its label bears:
             1808          (i) the common or usual name of the food, if there be any; and
             1809          (ii) if it is fabricated from two or more ingredients, the common or usual name of each
             1810      such ingredient; except that spices, flavorings, and colorings may, when authorized by the
             1811      department, be designated as spices, flavorings, and colorings without naming each; provided,
             1812      that to the extent that compliance with the requirements of Subsection (20)(i)(ii) is
             1813      impracticable, or results in deception or unfair competition, exemptions shall be established by
             1814      rule;
             1815          (j) is a food that purports to be or is represented to be for special dietary uses, unless its
             1816      label bears such information concerning its vitamin, mineral, and other dietary properties as the
             1817      department, after consultation with the Secretary of Agriculture of the United States, prescribes
             1818      by rules as necessary to inform purchasers as to its value for such uses;
             1819          (k) bears or contains any artificial flavoring, artificial coloring, or chemical
             1820      preservative, unless it bears labeling stating that fact; provided, that to the extent that
             1821      compliance with the requirements of this subsection are impracticable, exemptions shall be
             1822      prescribed by rules of the department; or
             1823          (l) does not bear directly thereon and on its containers, as the department may prescribe
             1824      by rule, the official inspection legend and establishment number of the official establishment
             1825      where the product was prepared, and, unrestricted by any of the foregoing, such other


             1826      information as the department may require by rules to assure that it will not have false or
             1827      misleading labeling and that the public will be informed of the manner of handling required to
             1828      maintain it in a wholesome condition.
             1829          (21) "Official certificate" means any certificate prescribed by rules of the department
             1830      for issuance by an inspector or other person performing official functions under this chapter.
             1831          (22) "Official device" means any device prescribed or authorized by the commissioner
             1832      for use in applying any official mark.
             1833          (23) "Official establishment" means any establishment at which inspection of the
             1834      slaughter of livestock or the preparation of livestock products is maintained under the authority
             1835      of this chapter.
             1836          (24) "Official inspection legend" means any symbol prescribed by rules of the
             1837      department showing that a livestock product was inspected and passed in accordance with this
             1838      chapter.
             1839          (25) "Official mark" means the official legend or any other symbol prescribed by rules
             1840      of the department to identify the status of any livestock or livestock product under this chapter.
             1841          (26) "Permittee" means a person who holds a valid farm custom slaughter permit.
             1842          (27) "Pesticide chemical," "food additive," "color additive," and "raw agricultural
             1843      commodity," have the same meanings for purposes of this chapter as ascribed to them in the
             1844      Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Sec. 301 et seq.
             1845          (28) "Poultry" means any domesticated bird, whether living or dead.
             1846          (29) "Poultry product" means any product capable of use as human food that is made
             1847      wholly or in part from any poultry carcass, excepting products that contain poultry ingredients
             1848      in relatively small proportion or that historically have not been considered by consumers as
             1849      products of the poultry food industry, and that are exempted from definition as a poultry
             1850      product by the commissioner.
             1851          (30) "Prepared" means slaughtered, canned, salted, stuffed, rendered, boned, cut up, or
             1852      otherwise manufactured or processed.
             1853          (31) "Renderer" means any person engaged in the business of rendering livestock
             1854      carcasses, or parts or products of such carcasses, except rendering conducted under inspection
             1855      or exemption under this chapter.
             1856          (32) "Slaughter" means the killing of livestock or poultry in a humane manner


             1857      including skinning, dressing, or the process of performing any of the specified acts in preparing
             1858      livestock or poultry for human consumption.
             1859          (33) "Slaughterhouse" or "custom slaughterhouse" means any building, plant, or
             1860      establishment used for the purpose of killing, dressing, or processing, whether such dressing or
             1861      processing is in conjunction with a killing operation or is a separate business, livestock or
             1862      livestock products or poultry or poultry products offered for sale or to be used for human
             1863      consumption.
             1864          (34) "Slaughtering of livestock or poultry as a business" means the slaughtering of
             1865      livestock or poultry for the owner or caretaker of the livestock or poultry by a person who is
             1866      not a full-time employee of the owner or caretaker of such livestock or poultry.
             1867          Section 43. Section 4-32-7 is amended to read:
             1868           4-32-7. Mandatory functions, powers, and duties of department prescribed.
             1869          The department shall make rules pursuant to Title 63G, Chapter 3, Utah Administrative
             1870      Rulemaking Act, regarding the following functions, powers, and duties, in addition to those
             1871      specified in Title 4, Chapter 1, Utah Agricultural Code, for the administration and enforcement
             1872      of this chapter:
             1873          (1) The department shall require antemortem and postmortem inspections, quarantine,
             1874      segregation, and reinspections by inspectors appointed for those purposes with respect to the
             1875      slaughter of livestock and poultry and the preparation of livestock and poultry products at
             1876      official establishments, except as provided in Subsection 4-32-8 (13).
             1877          (2) The department shall require that:
             1878          (a) livestock and poultry be identified for inspection purposes;
             1879          (b) livestock or poultry products, or their containers be marked or labeled as:
             1880          (i) "Utah Inspected and Passed" if, upon inspection, the products are found to be
             1881      unadulterated; and
             1882          (ii) "Utah Inspected and Condemned" if, upon inspection, the products are found to be
             1883      adulterated; and
             1884          (c) condemned products, which otherwise would be used for human consumption, be
             1885      destroyed under the supervision of an inspector.
             1886          (3) The department shall prohibit or limit livestock products, poultry products, or other
             1887      materials not prepared under inspection procedures provided in this chapter, from being


             1888      brought into official establishments.
             1889          (4) The department shall require that labels and containers for livestock and poultry
             1890      products:
             1891          (a) bear all information required under Section 4-32-3 if the product leaves the official
             1892      establishment; and
             1893          (b) be approved prior to sale or transportation.
             1894          (5) For official establishments required to be inspected under Subsection (1), the
             1895      department shall:
             1896          (a) prescribe sanitary standards;
             1897          (b) require experts in sanitation or other competent investigators to investigate sanitary
             1898      conditions; and
             1899          (c) refuse to provide inspection service if the sanitary conditions allow adulteration of
             1900      any livestock or poultry product.
             1901          (6) (a) The department shall require that any person engaged in a business referred to in
             1902      Subsection (6)(b) shall:
             1903          (i) keep accurate records disclosing all pertinent business transactions;
             1904          (ii) allow inspection of the business premises at reasonable times and examination of
             1905      inventory, records, and facilities; and
             1906          (iii) allow inventory samples to be taken after payment of their fair market value.
             1907          (b) Subsection (6)(a) shall refer to any person who:
             1908          (i) slaughters livestock or poultry;
             1909          (ii) prepares, freezes, packages, labels, buys, sells, transports, or stores any livestock or
             1910      poultry products for human or animal consumption;
             1911          (iii) renders livestock or poultry; or
             1912          (iv) buys, sells, or transports any dead, dying, disabled, or diseased livestock or poultry,
             1913      or parts of their carcasses that died by a method other than slaughter.
             1914          (7) (a) The department shall:
             1915          (i) adopt by reference rules and regulations under federal acts with changes that the
             1916      commissioner considers appropriate to make the rules and regulations applicable to operations
             1917      and transactions subject to this chapter; and
             1918          (ii) promulgate any other rules considered necessary for the efficient execution of the


             1919      provisions of this chapter, including rules of practice providing an opportunity for hearing in
             1920      connection with the issuance of orders under Subsection (5) or under Subsection 4-32-8 (1), (2),
             1921      or (3) and prescribing procedures for proceedings in these cases.
             1922          (b) These procedures [shall not] do not preclude requiring that a label or container be
             1923      withheld from use, or inspection be refused under Subsections (1) and (5), or Subsection
             1924      4-32-8 (3), pending issuance of a final order in the proceeding.
             1925          (8) (a) To prevent the inhumane slaughtering of livestock and poultry, inspectors shall
             1926      be appointed to examine and inspect methods of handling and slaughtering livestock and
             1927      poultry.
             1928          (b) Inspection of new slaughtering establishments may be refused or temporarily
             1929      suspended if livestock or poultry have been slaughtered or handled by any method not in
             1930      accordance with the Humane Methods of Slaughter Act of 1978, Public Law 95-445.
             1931          (9) (a) The department shall require all livestock and poultry showing symptoms of
             1932      disease during antemortem inspection, performed by an inspector appointed for that purpose, to
             1933      be set apart and slaughtered separately from other livestock and poultry.
             1934          (b) When slaughtered, the carcasses of livestock and poultry shall be subject to careful
             1935      examination and inspection in accordance with rules prescribed by the commissioner.
             1936          Section 44. Section 4-32-16 is amended to read:
             1937           4-32-16. Detention of animals or livestock or poultry products -- Removal of
             1938      official marks.
             1939          Whenever any livestock or poultry product or any product exempted from the definition
             1940      of a livestock or poultry product, or any dead, dying, disabled, or diseased livestock or poultry,
             1941      is found by any authorized representative of the commissioner, and there is reason to believe
             1942      that it is adulterated or misbranded and is capable of use as human food, or that it has not been
             1943      inspected and passed, or that it has been or is intended to be distributed in violation of this
             1944      chapter, it may be detained by such representative pending action under Section 4-32-17 , and
             1945      [shall not] may not be moved by any person from the place at which it is located when so
             1946      detained, until released by such representative. All official marks may be required by such
             1947      representative to be removed from such product or animal before it is released.
             1948          Section 45. Section 4-32-22 is amended to read:
             1949           4-32-22. Livestock or poultry slaughtered or the products of either not intended


             1950      for human use -- No inspection -- Products to be denatured or otherwise identified.
             1951          Inspection [shall not] may not be provided under this chapter at any establishment for
             1952      the slaughter of livestock or poultry or the preparation of any livestock products or poultry
             1953      products that are not intended for use as human food, but such products shall be denatured or
             1954      otherwise identified as prescribed by rules of the department prior to their offer for sale or
             1955      transportation.
             1956          Section 46. Section 4-35-7 is amended to read:
             1957           4-35-7. Notice to owner or occupant -- Corrective action required -- Directive
             1958      issued by department -- Costs -- Owner or occupant may prohibit spraying.
             1959          (1) The department or an authorized agent of the department shall notify the owner or
             1960      occupant of the problem and the available alternatives to remedy the problem. The owner or
             1961      occupant [must] shall take corrective action within 30 days.
             1962          (2) If the owner or occupant fails to take corrective action under Subsection (1), the
             1963      department may issue a directive for corrective action which [must] shall be taken within 15
             1964      days. If the owner or occupant fails to act within the required time, the department shall take
             1965      the necessary action. The department may recover costs incurred for controlling an insect
             1966      infestation emergency from the owner or occupant of the property on whose property corrective
             1967      action was taken.
             1968          (3) Owners or occupants of property may prohibit spraying by presenting an affidavit
             1969      from their attending physician to the department which states that the spraying as planned is a
             1970      danger to their health. The department shall provide the owner or occupant with alternatives to
             1971      spraying which will abate the infestation.
             1972          Section 47. Section 4-37-102 is amended to read:
             1973           4-37-102. Purpose statement -- Aquaculture considered a branch of agriculture.
             1974          (1) The Legislature declares that it is in the interest of the people of the state to
             1975      encourage the practice of aquaculture, while protecting the public fishery resource, in order to
             1976      augment food production, expand employment, promote economic development, and protect
             1977      and better utilize the land and water resources of the state.
             1978          (2) The Legislature further declares that aquaculture [should be] is considered a branch
             1979      of the agricultural industry of the state for purposes of any laws that apply to or provide for the
             1980      advancement, benefit, or protection of the agricultural industry within the state.


             1981          Section 48. Section 4-37-109 is amended to read:
             1982           4-37-109. Department to make rules.
             1983          (1) The department shall make rules in accordance with Title 63G, Chapter 3, Utah
             1984      Administrative Rulemaking Act:
             1985          (a) specifying procedures for the application and renewal of certificates of registration
             1986      for operating an aquaculture or fee fishing facility; and
             1987          (b) governing the disposal or removal of aquatic animals from an aquaculture or fee
             1988      fishing facility for which the certificate of registration has lapsed or been revoked.
             1989          (2) (a) The department may make other rules consistent with its responsibilities set
             1990      forth in Section 4-37-104 .
             1991          (b) Except as provided by this chapter, the rules authorized by Subsection (2)(a) [must]
             1992      shall be consistent with the suggested procedures for the detection and identification of
             1993      pathogens published by the American Fisheries Society's Fish Health Section.
             1994          Section 49. Section 4-37-110 is amended to read:
             1995           4-37-110. Inspection of records and facilities.
             1996          (1) The following records and information [must] shall be maintained by an
             1997      aquaculture or fee fishing facility for a period of two years and [must] shall be available for
             1998      inspection by a department representative during reasonable hours:
             1999          (a) records of purchase, acquisition, distribution, and production histories of aquatic
             2000      animals;
             2001          (b) certificate of registration; and
             2002          (c) valid identification of stocks, including origin of stocks.
             2003          (2) Department representatives may conduct pathological, fish culture, or physical
             2004      investigations at any aquaculture, public aquaculture, or fee fishing facility during reasonable
             2005      hours.
             2006          Section 50. Section 4-37-202 is amended to read:
             2007           4-37-202. Acquisition of aquatic animals for use in aquaculture facilities.
             2008          (1) Live aquatic animals intended for use in aquaculture facilities may be purchased or
             2009      acquired only from:
             2010          (a) aquaculture facilities within the state that have a certificate of registration and
             2011      health approval number;


             2012          (b) public aquaculture facilities within the state that have a health approval number; or
             2013          (c) sources outside the state that are health approved as provided in Part 5.
             2014          (2) A person holding a certificate of registration for an aquaculture facility [must] shall
             2015      submit annually to the department a record of each purchase of live aquatic animals and
             2016      transfer of live aquatic animals into the facility. This record [must] shall include the following
             2017      information:
             2018          (a) name, address, and health approval number of the source;
             2019          (b) date of transaction; and
             2020          (c) number and weight by species.
             2021          (3) The records required by Subsection (2) [must] shall be submitted to the department
             2022      before a certificate of registration is renewed or a subsequent certificate of registration is
             2023      issued.
             2024          Section 51. Section 4-37-203 is amended to read:
             2025           4-37-203. Transportation of aquatic animals to or from aquaculture facilities.
             2026          (1) Any person holding a certificate of registration for an aquaculture facility may
             2027      transport the live aquatic animals specified on the certificate of registration to the facility or to
             2028      any person who has been issued a certificate of registration to possess those aquatic animals.
             2029          (2) Each transfer or shipment of live aquatic animals from or to an aquaculture facility
             2030      within the state [must] shall be accompanied by documentation of the source and destination of
             2031      the fish, including:
             2032          (a) name, address, certificate of registration number and health approval number of the
             2033      source;
             2034          (b) number and weight being shipped, by species; and
             2035          (c) name, address, and certificate of registration number of the destination.
             2036          Section 52. Section 4-37-204 is amended to read:
             2037           4-37-204. Sale of aquatic animals from aquaculture facilities.
             2038          (1) (a) Except as provided by Subsection (1)(b), a person holding a certificate of
             2039      registration for an aquaculture facility may take an aquatic animal as approved on the certificate
             2040      of registration from the facility at any time and offer the aquatic animal for sale; however, live
             2041      aquatic animals may be sold within Utah only to a person who has been issued a certificate of
             2042      registration to possess the aquatic animal.


             2043          (b) A person who owns or operates an aquaculture facility may stock a live aquatic
             2044      animal in a private fish pond if the person:
             2045          (i) obtains a health approval number for the aquaculture facility;
             2046          (ii) provides the private fish pond's owner with a brochure published by the Division of
             2047      Wildlife Resources that summarizes the statutes and rules related to a private fish pond and the
             2048      possession of an aquatic animal;
             2049          (iii) inspects the private fish pond to verify that the private fish pond is in compliance
             2050      with Subsections 23-15-10 (2) and (3)(c); and
             2051          (iv) stocks the species, strain, and reproductive capability of aquatic animal authorized
             2052      by the Wildlife Board in accordance with Section 23-15-10 for stocking in the area where the
             2053      private fish pond is located.
             2054          (2) An aquatic animal sold or transferred by the owner or operator of an aquaculture
             2055      facility [must] shall be accompanied by the seller's receipt that contains the following
             2056      information:
             2057          (a) date of transaction;
             2058          (b) name, address, certificate of registration number, health approval number, and
             2059      signature of seller;
             2060          (c) number and weight of aquatic animal by:
             2061          (i) species;
             2062          (ii) strain; and
             2063          (iii) reproductive capability; and
             2064          (d) name and address of the receiver.
             2065          (3) (a) A person holding a certificate of registration for an aquaculture facility [must]
             2066      shall submit to the department an annual report of each sale of live aquatic animals or each
             2067      transfer of live aquatic animals to:
             2068          (i) another aquaculture facility; or
             2069          (ii) a fee fishing facility.
             2070          (b) The report [must] shall contain the following information:
             2071          (i) name, address, and certificate of registration number of the seller or supplier;
             2072          (ii) number and weight by species;
             2073          (iii) date of sale or transfer; and


             2074          (iv) name, address, phone number, and certificate of registration number of the
             2075      receiver.
             2076          (4) (a) A person who owns or operates an aquaculture facility shall submit to the
             2077      Division of Wildlife Resources an annual report of each sale or transfer of a live aquatic animal
             2078      to a private fish pond.
             2079          (b) The report shall contain:
             2080          (i) the name, address, and health approval number of the person;
             2081          (ii) the name, address, and phone number of the private fish pond's owner or operator;
             2082          (iii) the number and weight of aquatic animal by:
             2083          (A) species;
             2084          (B) strain; and
             2085          (C) reproductive capability;
             2086          (iv) date of sale or transfer;
             2087          (v) the private fish pond's location; and
             2088          (vi) verification that the private fish pond was inspected and is in compliance with
             2089      Subsections 23-15-10 (2) and (3)(c).
             2090          (5) The reports required by Subsections (3) and (4) [must] shall be submitted before:
             2091          (a) a certificate of registration is renewed or a subsequent certificate of registration is
             2092      issued for an aquaculture facility in the state; or
             2093          (b) a health approval number is issued for an out-of-state source.
             2094          Section 53. Section 4-37-302 is amended to read:
             2095           4-37-302. Acquisition of aquatic animals for use in fee fishing facilities.
             2096          (1) Live aquatic animals intended for use in fee fishing facilities may be purchased or
             2097      acquired only from:
             2098          (a) aquaculture facilities within the state that have a certificate of registration and
             2099      health approval number;
             2100          (b) public aquaculture facilities within the state that have a health approval number; or
             2101          (c) sources outside the state that are health approved pursuant to Part 5.
             2102          (2) (a) A person holding a certificate of registration for a fee fishing facility [must]
             2103      shall submit to the department an annual report of all live fish purchased or acquired.
             2104          (b) The report [must] shall contain the following information:


             2105          (i) name, address, and certificate of registration number of the seller or supplier;
             2106          (ii) number and weight by species;
             2107          (iii) date of purchase or transfer; and
             2108          (iv) name, address, and certificate of registration number of the receiver.
             2109          (c) The report [must] shall be submitted to the department before a certificate of
             2110      registration is renewed or subsequent certificate of registration is issued.
             2111          Section 54. Section 4-37-303 is amended to read:
             2112           4-37-303. Transportation of live aquatic animals to fee fishing facilities.
             2113          (1) Any person holding a certificate of registration for a fee fishing facility may
             2114      transport the live aquatic animals specified on the certificate of registration to the facility.
             2115          (2) Each transfer or shipment of live aquatic animals to a fee fishing facility within the
             2116      state [must] shall be accompanied by documentation of the source and destination of the fish,
             2117      including:
             2118          (a) name, address, certificate of registration number and health approval number of the
             2119      source;
             2120          (b) number and weight being shipped by species; and
             2121          (c) name, address, and certificate of registration number of the destination.
             2122          Section 55. Section 4-37-305 is amended to read:
             2123           4-37-305. Fishing license not required to fish at fee fishing facilities --
             2124      Transportation of dead fish.
             2125          (1) A fishing license is not required to take fish from fee fishing facilities.
             2126          (2) To transport dead fish from fee fishing facilities the fish [must] shall be
             2127      accompanied by the seller's receipt containing the following information:
             2128          (a) species and number of fish;
             2129          (b) date caught;
             2130          (c) certificate of registration number of the fee fishing facility; and
             2131          (d) name, address, and telephone number of the seller.
             2132          Section 56. Section 4-37-402 is amended to read:
             2133           4-37-402. Documentation required to import aquatic animals.
             2134          Any aquatic animals classified as controlled species by rules of the Wildlife Board that
             2135      are imported into the state for use in aquaculture or fee fishing facilities [must] shall be


             2136      accompanied by documentation indicating the following:
             2137          (1) the health approval number assigned by the department to the source facility;
             2138          (2) common or scientific names of the imported animals;
             2139          (3) name and address of the consignor and consignee;
             2140          (4) origin of shipment;
             2141          (5) final destination;
             2142          (6) number or pounds shipped;
             2143          (7) purpose for which shipped;
             2144          (8) method of transportation; and
             2145          (9) any other information required by the department.
             2146          Section 57. Section 4-37-502 is amended to read:
             2147           4-37-502. Inspections -- Health approval report -- Report for quarantine facility
             2148      -- Qualifications of inspectors -- Notification of department.
             2149          (1) (a) Except as provided by Subsection (1)(b), approval shall be based upon
             2150      inspections carried out in accordance with standards and rules of the Fish Health Policy Board
             2151      made pursuant to Section 4-37-503 .
             2152          (b) An owner or operator of an aquaculture facility that is under quarantine or whose
             2153      health approval has been canceled or denied prior to July 1, 2007 may seek health approval
             2154      without submitting or complying with a biosecurity plan required by rule by submitting a new
             2155      health inspection report to the department.
             2156          (2) (a) The inspections [must] shall be done by an individual who has received
             2157      certification from the American Fisheries Society as a fish health inspector.
             2158          (b) An inspection of an aquaculture facility may not be done by an inspector who is
             2159      employed by, or has pecuniary interest in, the facility being inspected.
             2160          (c) The department shall post on its website a current list of:
             2161          (i) certified fish health inspectors; and
             2162          (ii) approved laboratories to which a fish health inspector may send the samples
             2163      collected during the inspections required by this section.
             2164          (d) (i) If the fish health inspector conducting the inspection is not an employee of the
             2165      department, the owner or operator of the aquaculture facility shall notify the department of the
             2166      date and time of the inspection at least five business days before the date on which the


             2167      inspection will occur.
             2168          (ii) The department may be present for the inspection.
             2169          (3) To receive a health approval number, inspection reports and other evidence of the
             2170      disease status of a source facility [must] shall be submitted to the agency responsible for
             2171      certifying the source as health approved pursuant to Section 4-37-501 .
             2172          Section 58. Section 4-37-503 is amended to read:
             2173           4-37-503. Fish Health Policy Board.
             2174          (1) There is created within the department the Fish Health Policy Board which shall
             2175      establish policies designed to prevent the outbreak of, control the spread of, and eradicate
             2176      pathogens that cause disease in aquatic animals.
             2177          (2) The Fish Health Policy Board shall:
             2178          (a) in accordance with Subsection (6)(b), determine procedures and requirements for
             2179      certifying a source of aquatic animals as health approved, including:
             2180          (i) the pathogens for which inspection is required to receive health approval;
             2181          (ii) the pathogens that may not be present to receive health approval; and
             2182          (iii) standards and procedures required for the inspection of aquatic animals;
             2183          (b) establish procedures for the timely reporting of the presence of a pathogen and
             2184      disease threat;
             2185          (c) create policies and procedures for, and appoint, an emergency response team to:
             2186          (i) investigate a serious disease threat;
             2187          (ii) develop and monitor a plan of action; and
             2188          (iii) report to:
             2189          (A) the commissioner of agriculture and food;
             2190          (B) the director of the Division of Wildlife Resources; and
             2191          (C) the chair of the Fish Health Policy Board; and
             2192          (d) develop a unified statewide aquaculture disease control plan.
             2193          (3) The Fish Health Policy Board shall advise the commissioner of agriculture and
             2194      food and the executive director of the Department of Natural Resources regarding:
             2195          (a) educational programs and information systems to educate and inform the public
             2196      about practices that the public may employ to prevent the spread of disease; and
             2197          (b) communication and interaction between the department and the Division of


             2198      Wildlife Resources regarding fish health policies and procedures.
             2199          (4) (a) (i) The governor shall appoint the following seven members to the Fish Health
             2200      Policy Board:
             2201          (A) one member from names submitted by the Department of Natural Resources;
             2202          (B) one member from names submitted by the Department of Agriculture and Food;
             2203          (C) one member from names submitted by a nonprofit corporation that promotes sport
             2204      fishing;
             2205          (D) one member from names submitted by a nonprofit corporation that promotes the
             2206      aquaculture industry;
             2207          (E) one member from names submitted by the Department of Natural Resources and
             2208      the Department of Agriculture and Food;
             2209          (F) one member from names submitted by a nonprofit corporation that promotes sport
             2210      fishing; and
             2211          (G) one member from names submitted by a nonprofit corporation that promotes the
             2212      aquaculture industry.
             2213          (ii) The members appointed under Subsections (4)(a)(i)(E) through (G) shall be:
             2214          (A) (I) faculty members of an institution of higher education; or
             2215          (II) qualified professionals; and
             2216          (B) have education and knowledge in:
             2217          (I) fish pathology;
             2218          (II) business;
             2219          (III) ecology; or
             2220          (IV) parasitology.
             2221          (iii) At least one member appointed under Subsections (4)(a)(i)(E) through (G) shall
             2222      have education and knowledge about fish pathology.
             2223          (iv) (A) A nominating person shall submit at least three names to the governor.
             2224          (B) If the governor rejects all the names submitted for a member, the recommending
             2225      person shall submit additional names.
             2226          (b) Except as required by Subsection (4)(c), the term of office of board members shall
             2227      be four years.
             2228          (c) Notwithstanding the requirements of Subsection (4)(b), the governor shall, at the


             2229      time of appointment or reappointment, adjust the length of terms to ensure that the terms of
             2230      board members are staggered so that approximately half of the board is appointed every two
             2231      years.
             2232          (d) When a vacancy occurs in the membership for any reason, the replacement shall be
             2233      appointed for the unexpired term.
             2234          (e) The board members shall elect a chair of the board from the board's membership.
             2235          (f) The board shall meet upon the call of the chair or a majority of the board members.
             2236          (g) An action of the board shall be adopted upon approval of the majority of voting
             2237      members.
             2238          (5) (a) (i) A member who is not a government employee may not receive compensation
             2239      or benefits for the member's service, but may receive per diem and expenses incurred in the
             2240      performance of the member's official duties at the rates established by the Division of Finance
             2241      under Sections 63A-3-106 and 63A-3-107 .
             2242          (ii) A member may decline to receive per diem and expenses for the member's service.
             2243          (b) (i) A state government officer and employee member who does not receive salary,
             2244      per diem, or expenses from the agency the member represents for the member's service may
             2245      receive per diem and expenses incurred in the performance of the member's official duties at
             2246      the rates established by the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
             2247          (ii) A state government officer and employee member may decline to receive per diem
             2248      and expenses for the member's service.
             2249          (c) (i) A higher education member who does not receive salary, per diem, or expenses
             2250      from the entity that the member represents for the member's service may receive per diem and
             2251      expenses incurred in the performance of the member's official duties at the rates established by
             2252      the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
             2253          (ii) A higher education member may decline to receive per diem and expenses for the
             2254      member's service.
             2255          (6) (a) The board shall make rules consistent with its responsibilities and duties
             2256      specified in this section.
             2257          (b) Except as provided by this chapter, all rules adopted by the Fish Health Policy
             2258      Board [must] shall be consistent with the suggested procedures for the detection and
             2259      identification of pathogens published by the American Fisheries Society's Fish Health Section.


             2260          (c) (i) Rules of the department and Fish Health Policy Board pertaining to the control
             2261      of disease shall remain in effect until the Fish Health Policy Board enacts rules to replace those
             2262      provisions.
             2263          (ii) The Fish Health Policy Board shall promptly amend rules that are inconsistent with
             2264      the current suggested procedures published by the American Fisheries Society.
             2265          (d) The Fish Health Policy Board may waive a requirement established by the Fish
             2266      Health Policy Board's rules if:
             2267          (i) the rule specifies the waiver criteria and procedures; and
             2268          (ii) the waiver will not threaten other aquaculture facilities or wild aquatic animal
             2269      populations.
             2270          Section 59. Section 4-39-201 is amended to read:
             2271           4-39-201. Fencing, posts, and gates.
             2272          (1) Each domesticated elk facility shall, at a minimum, meet the requirements of this
             2273      section and shall be constructed to prevent the movement of domesticated elk into or out of the
             2274      facility.
             2275          (2) (a) All perimeter fences and gates shall be:
             2276          (i) a minimum of eight feet above ground level; and
             2277          (ii) constructed of hi-tensile steel.
             2278          (b) At least the bottom four feet [must] shall be mesh with a maximum mesh size of 6"
             2279      x 6".
             2280          (c) The remaining four feet shall be mesh with a maximum mesh size of 12" x 6".
             2281          (3) The minimum wire gauge shall be 14-1/2 gauge for a 2 woven hi-tensile fence.
             2282          (4) All perimeter gates at the entrances of domesticated elk handling facilities shall be
             2283      locked, with consecutive or self-closing gates when animals are present.
             2284          (5) Posts shall be:
             2285          (a) (i) constructed of treated wood which is at least four inches in diameter; or
             2286          (ii) constructed of a material with the strength equivalent of Subsection (5)(a)(i);
             2287          (b) spaced no more than 30 feet apart if one stay is used, or 20 feet apart if no stays are
             2288      used; and
             2289          (c) at least eight feet above ground level and two feet below ground level.
             2290          (6) Stays, between the posts, shall be:


             2291          (a) constructed of treated wood or steel;
             2292          (b) spaced no more than 15 feet from any post; and
             2293          (c) at least eight feet above ground level, and two feet below ground level.
             2294          (7) Corner posts and gate posts shall be braced wood or its strength equivalent.
             2295          Section 60. Section 4-39-205 is amended to read:
             2296           4-39-205. License renewal.
             2297          (1) To renew a license, the licensee [must] shall submit to the department:
             2298          (a) an inspection certificate showing that:
             2299          (i) the domesticated elk, on the domesticated elk facility, have been inspected and
             2300      certified by the department for health, proof of ownership, and genetic purity; and
             2301          (ii) the facility has been properly maintained as provided in this chapter during the
             2302      immediately preceding 60-day period; and
             2303          (b) a record of each purchase of domesticated elk and transfer of domesticated elk into
             2304      the facility, which [must] shall include the following information:
             2305          (i) name, address, and health approval number of the source;
             2306          (ii) date of transaction; and
             2307          (iii) number and sex.
             2308          (2) (a) If the application for renewal is not received on or before April 30, a late fee
             2309      will be charged.
             2310          (b) A license may not be renewed until the fee is paid.
             2311          (3) If the application and fee for renewal are not received on or before July 1, the
             2312      license may not be renewed, and a new license shall be required.
             2313          Section 61. Section 4-39-206 is amended to read:
             2314           4-39-206. Records to be maintained.
             2315          (1) The following records and information [must] shall be maintained by a
             2316      domesticated elk facility for a period of five years:
             2317          (a) records of purchase, acquisition, distribution, and production histories of
             2318      domesticated elk;
             2319          (b) records documenting antler harvesting, production, and distribution; and
             2320          (c) health certificates and genetic purity records.
             2321          (2) For purposes of carrying out the provisions of this chapter and rules promulgated


             2322      under this chapter and, at any reasonable time during regular business hours, the department
             2323      shall have free and unimpeded access to inspect all records required to be kept.
             2324          (3) The department may make copies of the records referred to in this section.
             2325          Section 62. Section 4-39-302 is amended to read:
             2326           4-39-302. Acquisition of domesticated elk for use in domesticated elk facilities.
             2327          Domesticated elk intended for use in domesticated elk facilities [must] shall meet all
             2328      health and genetic requirements of this chapter.
             2329          Section 63. Section 4-39-304 is amended to read:
             2330           4-39-304. Marking domesticated elk.
             2331          (1) Each domesticated elk, not previously tattooed, [must] shall be marked by either a
             2332      tattoo, as provided in Subsection (2), or by a microchip, as provided in Subsection (3):
             2333          (a) within 30 days of a change of ownership; or
             2334          (b) in the case of newborn calves, within 15 days after being weaned, but in any case,
             2335      no later than September 15.
             2336          (2) If a domesticated elk is identified with a tattoo, the tattoo shall:
             2337          (a) be placed peri-anally or inside the right ear; and
             2338          (b) consist of a four-digit herd number assigned by the department over a three-digit
             2339      individual animal number assigned by the owner.
             2340          (3) If a domesticated elk is identified with a microchip, it [must] shall be placed in the
             2341      right ear.
             2342          Section 64. Section 4-39-305 is amended to read:
             2343           4-39-305. Transportation of domesticated elk to or from domesticated elk
             2344      facilities.
             2345          Any domesticated elk transferred to or from a domesticated elk facility within the state
             2346      [must] shall be:
             2347          (1) accompanied by a brand inspection certificate specifying the following:
             2348          (a) the name, address, and facility license number of the source;
             2349          (b) number, sex, and individual identification number; and
             2350          (c) name, address, and facility license number of the destination;
             2351          (2) accompanied by proof of genetic purity as provided in Section 4-39-301 ; and
             2352          (3) inspected by the department as provided in Section 4-39-306 .


             2353          Section 65. Section 4-39-306 is amended to read:
             2354           4-39-306. Inspection prior to movement, sale, removal of antlers, or slaughter.
             2355          (1) Each domesticated elk facility licensee shall have the domesticated elk inspected by
             2356      the department prior to any transportation, sale, removal of antlers, or slaughter.
             2357          (2) Any person transporting or possessing domesticated elk or domesticated elk
             2358      products [must] shall have the appropriate brand inspection certificate in his or her possession.
             2359          Section 66. Section 6-1-3 is amended to read:
             2360           6-1-3. Assignment to be written -- Contents -- Recording.
             2361          Every such assignment shall be by an instrument in writing, setting forth the name of
             2362      the assignor, his residence and business, the name of the assignee and his residence and
             2363      business, and in a general way describing the property assigned with its location, and stating
             2364      the purpose of the assignment. It shall be executed and acknowledged in the manner prescribed
             2365      for the execution and acknowledgment of deeds, and recorded in the office of the recorder of
             2366      the county where the property assigned is located. The assignor shall annex to such instrument
             2367      an inventory, under oath, of his estate, real and personal, according to the best of his
             2368      knowledge, and a list of his creditors and the amount of their respective demands; but such
             2369      inventory [shall not be] is not conclusive as to the amount of the debtor's estate, and such
             2370      assignment shall vest in the assignee the title to any other property belonging to the debtor at
             2371      the time of making the assignment, except property exempt from execution and insurance upon
             2372      the life of the assignor, unless the instrument mentions such exempt property and insurance and
             2373      declares an intention of the assignor that they shall pass thereby. As soon as such instrument is
             2374      recorded it shall be filed, with the inventory and list of creditors, in the office of the clerk of the
             2375      district court of the county in which the property so assigned is located; as shall all subsequent
             2376      papers connected with such proceedings.
             2377          Section 67. Section 6-1-9 is amended to read:
             2378           6-1-9. Taxes to be paid.
             2379          In all assignments of property for the benefit of creditors, assessments and taxes levied
             2380      thereon either under the laws of the state or ordinances of municipal corporations shall be
             2381      entitled to priority, and paid in full by the assignee, and claims therefor need not be filed with
             2382      him.
             2383          Section 68. Section 6-1-15 is amended to read:


             2384           6-1-15. Debts not matured -- Delay in filing claims.
             2385          Any creditor may claim debts to become due as well as debts due, but on debts not due
             2386      a reasonable rebate shall be made when the same are not drawing interest. Creditors who [shall
             2387      not] do not file their claims within three months from the publication of notice as aforesaid
             2388      [shall not] may not participate in dividends until after payment in full of all claims presented
             2389      within said time and allowed by the court, unless the court has extended the time for filing such
             2390      claims.
             2391          Section 69. Section 7-1-303 is amended to read:
             2392           7-1-303. Joint operations and information exchange by institutions.
             2393          The commissioner may authorize institutions subject to the jurisdiction of the
             2394      department to engage in such joint and cooperative actions as the commissioner finds will be in
             2395      the public interest, [such as, but not limited to] including:
             2396          (1) mutual exchange of financial information as to depositors, borrowers, and other
             2397      customers;
             2398          (2) joint use of facilities;
             2399          (3) joint operation of clearing houses and other facilities for payment of checks, drafts,
             2400      or other instruments drawn on or issued by various classes of depository institutions;
             2401          (4) joint participation in lending programs to promote the public welfare;
             2402          (5) joint risk management services; and
             2403          (6) joint ownership, operation, or furnishing of electronic funds transfer services.
             2404          Section 70. Section 7-1-309 is amended to read:
             2405           7-1-309. Hearings by commissioner -- Discretion of commissioner -- Procedure --
             2406      Judicial review.
             2407          The commissioner may conduct or cause to be conducted hearings relating to matters
             2408      within his supervisory jurisdiction and shall establish rules for discovery and other procedures
             2409      applicable to the hearings consistent with the provisions of the Utah Rules of Civil Procedure.
             2410      The decision whether or not to hold a formal hearing on any matter coming before the
             2411      commissioner under this title shall be solely within the discretion of the commissioner. His
             2412      failure or refusal to hold a formal hearing [shall not be] is not a ground for reversal of any
             2413      decision or order of the commissioner unless the reviewing court finds that such failure or
             2414      refusal has deprived an interested party of due process of law, or that a formal hearing is


             2415      required by the provisions of this title.
             2416          Section 71. Section 7-1-607 is amended to read:
             2417           7-1-607. Lost or destroyed account book or certificate.
             2418          If the holder of record of an account as shown by the books of a depository institution,
             2419      or his legal representative, files with the institution an affidavit to the effect that the account
             2420      book or certificate has been lost or destroyed and has not been pledged or assigned in whole or
             2421      in part, the institution shall issue a new account book or certificate in the name of the holder of
             2422      record. The new account book or certificate shall state that it is issued in lieu of the one lost or
             2423      destroyed. The institution [shall not be] is not liable thereafter on the original account book or
             2424      certificate. However, the board of directors of the institution shall, if in its judgment it is
             2425      necessary, require a bond in an amount it considers sufficient to indemnify the institution
             2426      against any loss which might result from the issuance of the new account book or certificate.
             2427          Section 72. Section 7-1-612 is amended to read:
             2428           7-1-612. Pledge or hypothecation of joint savings accounts.
             2429          The pledge or hypothecation to any depository institution of all or part of a savings
             2430      account in joint tenancy signed by any tenant or tenants whether minor or adult, upon whose
             2431      signature or signatures withdrawals may be made from the account shall, unless the terms of
             2432      the savings account provide specifically to the contrary, be a valid pledge and transfer to the
             2433      institution of that part of the account pledged or hypothecated, and [shall not] does not operate
             2434      to sever or terminate the joint and survivorship ownership of all or any part of the account.
             2435          Section 73. Section 7-1-806 is amended to read:
             2436           7-1-806. Money market funds arranging with bank to honor two-party
             2437      instruments -- Discouraging payment of interest to two persons on funds in transit --
             2438      Pyramiding and similar schemes as misdemeanors.
             2439          Nothing in this act shall be construed to prevent money market funds from making
             2440      arrangements with banks to honor two party checks, drafts, or other instruments.
             2441          The commissioner shall exert his influence to discourage banks, money market funds
             2442      and other programs in Utah and throughout the United States from paying interest to two
             2443      persons at the same time on funds in the process of transfer.
             2444          The process or the practice referred to as pyramiding or any similar process or practice
             2445      as defined by the commissioner, and such definition is approved by the governor, shall be


             2446      prohibited within this state and persons found guilty of these schemes shall be found guilty of a
             2447      class C misdemeanor. This [shall not] does not preclude more serious punishment under
             2448      federal law.
             2449          Money market funds, similar funds and bank regulated institutions shall cooperate with
             2450      the commissioner to stop these practices.
             2451          Section 74. Section 7-2-9 is amended to read:
             2452           7-2-9. Conservatorship, receivership, or liquidation of institution -- Appointment
             2453      of receiver -- Review of actions.
             2454          (1) Upon taking possession of the institution, the commissioner may appoint a receiver
             2455      to perform the duties of the commissioner. Subject to any limitations, conditions, or
             2456      requirements specified by the commissioner and approved by the court, a receiver shall have all
             2457      the powers and duties of the commissioner under this chapter and the laws of this state to act as
             2458      a conservator, receiver, or liquidator of the institution. Actions of the commissioner in
             2459      appointing a receiver shall be subject to review only as provided in Section 7-2-2 .
             2460          (2) (a) If the deposits of the institution are to any extent insured by a federal deposit
             2461      insurance agency, the commissioner may appoint that agency as receiver. After receiving
             2462      notice in writing of the acceptance of the appointment, the commissioner shall file a certificate
             2463      of appointment in the commissioner's office and with the clerk of the district court. After the
             2464      filing of the certificate, the possession of all assets, business, and property of the institution is
             2465      considered transferred from the institution and the commissioner to the agency, and title to all
             2466      assets, business, and property of the institution is vested in the agency without the execution of
             2467      any instruments of conveyance, assignment, transfer, or endorsement.
             2468          (b) If a federal deposit insurance agency accepts an appointment as receiver, it has all
             2469      the powers and privileges provided by the laws of this state and the United States with respect
             2470      to the conservatorship, receivership, or liquidation of an institution and the rights of its
             2471      depositors, and other creditors, including authority to make an agreement for the purchase of
             2472      assets and assumption of deposit and other liabilities by another depository institution or take
             2473      other action authorized by Title 12 of the United States Code to maintain the stability of the
             2474      banking system. Such action by a federal deposit insurance agency may be taken upon
             2475      approval by the court, with or without prior notice. Such actions or agreements may be
             2476      disapproved, amended, or rescinded only upon a finding by the court that the decisions or


             2477      actions of the receiver are arbitrary, capricious, fraudulent, or contrary to law. In the event of
             2478      any conflict between state and federal law, including provisions for adjudicating claims against
             2479      the institution or receiver, the receiver shall comply with the federal law and any resulting
             2480      violation of state law [shall not] does not by itself constitute grounds for the court to
             2481      disapprove the actions of the receiver or impose any penalty for such violation.
             2482          (c) The commissioner or any receiver appointed by him shall possess all the rights and
             2483      claims of the institution against any person whose breach of fiduciary duty or violations of the
             2484      laws of this state or the United States applicable to depository institutions may have caused or
             2485      contributed to a condition which resulted in any loss incurred by the institution or to its assets
             2486      in the possession of the commissioner or receiver. As used in this Subsection (2)(c), fiduciary
             2487      duty includes those duties and standards applicable under statutes and laws of this state and the
             2488      United States to a director, officer, or other party employed by or rendering professional
             2489      services to a depository institution whose deposits are insured by a federal deposit insurance
             2490      agency. Upon taking possession of an institution, no person other than the commissioner or
             2491      receiver shall have standing to assert any such right or claim of the institution, including its
             2492      depositors, creditors, or shareholders unless the right or claim has been abandoned by the
             2493      commissioner or receiver with approval of the court. Any judgment based on the rights and
             2494      claims of the commissioner or receiver shall have priority in payment from the assets of the
             2495      judgment debtors.
             2496          (d) For the purposes of this section, the term "federal deposit insurance agency" shall
             2497      include the Federal Deposit Insurance Corporation, the National Credit Union Administration
             2498      and any departments thereof or successors thereto, and any other federal agency authorized by
             2499      federal law to act as a conservator, receiver, and liquidator of a federally insured depository
             2500      institution, including the Resolution Trust Corporation and any department thereof or successor
             2501      thereto.
             2502          (3) The receiver may employ assistants, agents, accountants, and legal counsel. If the
             2503      receiver is not a federal deposit insurance agency, the compensation to be paid such assistants,
             2504      agents, accountants, and legal counsel shall be approved by the commissioner. All expenses
             2505      incident to the receivership shall be paid out of the assets of the institution. If a receiver is not
             2506      a federal deposit insurance agency, the receiver and any assistants and agents shall provide
             2507      bond or other security specified by the commissioner and approved by the court for the faithful


             2508      discharge of all duties and responsibilities in connection with the receivership including the
             2509      accounting for money received and paid. The cost of the bond shall be paid from the assets of
             2510      the institution. Suit may be maintained on the bond by the commissioner or by any person
             2511      injured by a breach of the condition of the bond.
             2512          (4) (a) Upon the appointment of a receiver for an institution in possession pursuant to
             2513      this chapter, the commissioner and the department are exempt from liability or damages for any
             2514      act or omission of any receiver appointed pursuant to this section.
             2515          (b) This section does not limit the right of the commissioner to prescribe and enforce
             2516      rules regulating a receiver in carrying out its duties with respect to an institution subject to the
             2517      jurisdiction of the department.
             2518          (c) Any act or omission of the commissioner or of any federal deposit insurance agency
             2519      as a receiver appointed by him while acting pursuant to this chapter shall be deemed to be the
             2520      exercise of a discretionary function within the meaning of Section 63G-7-301 of the laws of
             2521      this state or Section 28 U.S.C. 2680(a) of the laws of the United States.
             2522          (5) Actions, decisions, or agreements of a receiver under this chapter, other than
             2523      allowance or disallowance of claims under Section 7-2-6 , shall be subject to judicial review
             2524      only as follows:
             2525          (a) A petition for review shall be filed with the court having jurisdiction under Section
             2526      7-2-2 not more than 90 days after the date the act, decision, or agreement became effective or
             2527      its terms are filed with the court.
             2528          (b) The petition shall state in simple, concise, and direct terms the facts and principles
             2529      of law upon which the petitioner claims the act, decision, or agreement of the receiver was or
             2530      would be arbitrary, capricious, fraudulent, or contrary to law and how the petitioner is or may
             2531      be damaged thereby. The court shall dismiss any petition which fails to allege that the
             2532      petitioner would be directly injured or damaged by the act, decision, or agreement which is the
             2533      subject of the petition. Rule 11 of the Utah Rules of Civil Procedure shall apply to all parties
             2534      with respect to the allegations set forth in a petition or response.
             2535          (c) The receiver shall have 30 days after service of the petition within which to
             2536      respond.
             2537          (d) All further proceedings are to be conducted in accordance with the Utah Rules of
             2538      Civil Procedure.


             2539          (6) All notices required under this section shall be made in accordance with the Utah
             2540      Rules of Civil Procedure and served upon the attorney general of the state of Utah, the
             2541      commissioner of financial institutions, the receiver of the institution appointed under this
             2542      chapter, and upon the designated representative of any party in interest who requests in writing
             2543      such notice.
             2544          Section 75. Section 7-2-10 is amended to read:
             2545           7-2-10. Inventory of assets -- Listings of claims -- Report of proceedings -- Filing
             2546      -- Inspection.
             2547          As soon as is practical after taking possession of an institution the commissioner, or any
             2548      receiver or liquidator appointed by him, shall make or cause to be made in duplicate an
             2549      inventory of its assets, one copy to be filed in his office and one with the clerk of the district
             2550      court. Upon the expiration of the time fixed for presentation of claims the commissioner, or
             2551      any receiver or liquidator appointed by him, shall make in duplicate a full and complete list of
             2552      the claims presented, including and specifying claims disallowed by him, of which one copy
             2553      shall be filed in his office and one copy in the office of the clerk of the district court. The
             2554      commissioner, or any receiver or liquidator appointed by him, shall in like manner make and
             2555      file supplemental lists showing all claims presented after the filing of the first list. The
             2556      supplemental lists shall be filed every six months and at least 15 days before the declaration of
             2557      any dividend. At the time of the order for final distribution the commissioner, or any receiver
             2558      or liquidator appointed by him, shall make a report in duplicate of the proceeding, showing the
             2559      disposition of the assets and liabilities of the institution, one copy to be filed in his office and
             2560      one with the clerk of the district court. The accounting, inventory, and lists of claims shall be
             2561      open at all reasonable times for inspection. Any objection to any report or accounting [must]
             2562      shall be filed with the clerk of the district court within 30 days after the report of accounting
             2563      has been filed by the commissioner, or any receiver or liquidator appointed by him, and shall
             2564      be subject to judicial review only as provided in Section 7-2-9 .
             2565          Section 76. Section 7-2-12 is amended to read:
             2566           7-2-12. Powers of commissioner in possession -- Sale of assets -- Postpossession
             2567      financing -- New deposit instruments -- Executory contracts -- Transfer of property --
             2568      Avoidance of transfers -- Avoidable preferences -- Setoff.
             2569          (1) Upon taking possession of the institution, the commissioner may do all things


             2570      necessary to preserve its assets and business, and shall rehabilitate, reorganize, or liquidate the
             2571      affairs of the institution in a manner he determines to be in the best interests of the institution's
             2572      depositors and creditors. Any such determination by the commissioner may not be overruled
             2573      by a reviewing court unless it is found to be arbitrary, capricious, fraudulent, or contrary to law.
             2574      In the event of a liquidation, he shall collect all debts due and claims belonging to it, and may
             2575      compromise all bad or doubtful debts. He may sell, upon terms he may determine, any or all of
             2576      the property of the institution for cash or other consideration. The commissioner shall give
             2577      such notice as the court may direct to the institution of the time and place of hearing upon an
             2578      application to the court for approval of the sale. The commissioner shall execute and deliver to
             2579      the purchaser of any property of the institution sold by him those deeds or instruments
             2580      necessary to evidence the passing of title.
             2581          (2) With approval of the court and upon terms and with priority determined by the
             2582      court, the commissioner may borrow money and issue evidence of indebtedness. To secure
             2583      repayment of the indebtedness, he may mortgage, pledge, transfer in trust, or hypothecate any
             2584      or all of the property of the institution superior to any charge on the property for expenses of
             2585      the proceeding as provided in Section 7-2-14 . These loans may be obtained for the purpose of
             2586      facilitating liquidation, protecting or preserving the assets in the charge of the commissioner,
             2587      expediting the making of distributions to depositors and other claimants, aiding in the
             2588      reopening or reorganization of the institution or its merger or consolidation with another
             2589      institution, or the sale of all of its assets. Neither the commissioner nor any special deputy or
             2590      other person lawfully in charge of the affairs of the institution is under any personal obligation
             2591      to repay those loans. The commissioner may take any action necessary or proper to
             2592      consummate the loan and to provide for its repayment and to give bond when required for the
             2593      faithful performance of all undertakings in connection with it. The commissioner or special
             2594      deputy shall make application to the court for approval of any loan proposed under this section.
             2595      Notice of hearing upon the application shall be given as the court directs. At the hearing upon
             2596      the application any stockholder or shareholder of the institution or any depositor or other
             2597      creditor of the institution may appear and be heard on the application. Prior to the obtaining of
             2598      a court order, the commissioner or special deputy in charge of the affairs of the institution may
             2599      make application or negotiate for the loan or loans subject to the obtaining of the court order.
             2600          (3) With the approval of the court pursuant to a plan of reorganization or liquidation


             2601      under Section 7-2-18 , the commissioner may provide for depositors to receive new deposit
             2602      instruments from a depository institution that purchases or receives some or all of the assets of
             2603      the institution in the possession of the commissioner. All new deposit instruments issued by
             2604      the acquiring depository institution may, in accordance with the terms of the plan of
             2605      reorganization or liquidation, be subject to different amounts, terms, and interest rates than the
             2606      original deposit instruments of the institution in the possession of the commissioner. All
             2607      deposit instruments issued by the acquiring institution shall be considered new deposit
             2608      obligations of the acquiring institution. The original deposit instruments issued by the
             2609      institution in the possession of the commissioner are not liabilities of the acquiring institution,
             2610      unless assumed by the acquiring institution. Unpaid claims of depositors against the institution
             2611      in the possession of the commissioner continue, and may be provided for in the plan of
             2612      reorganization or liquidation.
             2613          (4) The commissioner, after taking possession of any institution or other person subject
             2614      to the jurisdiction of the department, may terminate any executory contract, including standby
             2615      letters of credit, unexpired leases and unexpired employment contracts, to which the institution
             2616      or other person is a party. If the termination of an executory contract or unexpired lease
             2617      constitutes a breach of the contract or lease, the date of the breach is the date on which the
             2618      commissioner took possession of the institution. Claims for damages for breach of an
             2619      executory contract [must] shall be filed within 30 days of receipt of notice of the termination,
             2620      and if allowed, shall be paid in the same manner as all other allowable claims of the same
             2621      priority out of the assets of the institution available to pay claims.
             2622          (5) With approval of the court and upon a showing by the commissioner that it is in the
             2623      best interests of the depositors and creditors, the commissioner may transfer property on
             2624      account of an indebtedness incurred by the institution prior to the date of the taking.
             2625          (6) (a) The commissioner may avoid any transfer of any interest of the institution in
             2626      property or any obligation incurred by the institution that is void or voidable by a creditor under
             2627      Title 25, Chapter 6.
             2628          (b) The commissioner may avoid any transfer of any interest in real property of the
             2629      institution that is void as against or voidable by a subsequent purchaser in good faith and for a
             2630      valuable consideration of the same real property or any portion thereof who has duly recorded
             2631      his conveyance at the time possession of the institution is taken, whether or not such a


             2632      purchaser exists.
             2633          (c) The commissioner may avoid any transfer of any interest in property of the
             2634      institution or any obligation incurred by the institution that is invalid or void as against, or is
             2635      voidable by a creditor that extends credit to the institution at the time possession of the
             2636      institution is taken by the commissioner, and that obtains, at such time and with respect to such
             2637      credit, a judgment lien or a lien by attachment, levy, execution, garnishment, or other judicial
             2638      lien on the property involved, whether or not such a creditor exists.
             2639          (d) The right of the commissioner under Subsections (6)(b) and (c) to avoid any
             2640      transfer of any interest in property of the institution shall be unaffected by and without regard
             2641      to any knowledge of the commissioner or of any creditor of the institution.
             2642          (e) "Transfer" means every mode, direct or indirect, absolute or conditional, voluntary
             2643      or involuntary, or disposing of or parting with property or with an interest in property,
             2644      including retention of title as a security interest.
             2645          (f) The commissioner may avoid and recover any payment or other transfer of any
             2646      interest in property of the institution to or for the benefit of a creditor, for or on account of an
             2647      antecedent debt owed by the institution before the transfer was made if the creditor at the time
             2648      of such transfer had reasonable cause to believe that the institution was insolvent, and if the
             2649      payment or other transfer will allow the creditor to obtain a greater percentage of his debt than
             2650      he would be entitled to under the provisions of Section 7-2-15 . For the purposes of this
             2651      subsection:
             2652          (i) antecedent debt does not include earned wages and salaries and other operating
             2653      expenses incurred and paid in the normal course of business;
             2654          (ii) a transfer of any interest in real property is deemed to have been made or suffered
             2655      when it became so far perfected that a subsequent good faith purchaser of the property from the
             2656      institution for a valuable consideration could not acquire an interest superior to the transferee;
             2657      and
             2658          (iii) a transfer of property other than real property is deemed to have been made or
             2659      suffered when it became so far perfected that a creditor on a simple contract could not acquire a
             2660      lien by attachment, levy, execution, garnishment, or other judicial lien superior to the interest
             2661      of the transferee.
             2662          (g) For purposes of this section, "date of possession" means the earlier of the date the


             2663      commissioner takes possession of a financial institution under Title 7, Chapter 2, or the date
             2664      when the commissioner enters an order suspending payments to depositors and other creditors
             2665      under Section 7-2-19 .
             2666          (7) (a) With or without the prior approval of the court, the commissioner or any federal
             2667      deposit insurance agency appointed by him as receiver or liquidator of a depository institution
             2668      closed by the commissioner under the provisions of this chapter may setoff against the deposits
             2669      or other liabilities of the institution any debts or other obligations of the depositor or claimant
             2670      due and owing to the institution. The amount of any setoff against the liabilities of the
             2671      institution shall be no greater than the amount the depositor or claimant would receive pursuant
             2672      to Section 7-2-15 after final liquidation of the institution. When the liquidation value of a
             2673      depositor's or claimant's claim against the institution will or may be less than the full amount of
             2674      the claim, setoff may be made prior to final liquidation if the commissioner or any receiver or
             2675      liquidator appointed by him can reasonably estimate the liquidation value of the claim, and the
             2676      court, after notice and opportunity for hearing, approves the estimate for purposes of making
             2677      the setoff. If the right of setoff is exercised, the commissioner or any receiver or liquidator
             2678      appointed by him shall give written notice to the depositor or claimant of the amount setoff.
             2679          (b) The existence and amount of a debtor or creditor relationship or both, between the
             2680      institution and its depositor or claimant and the right to the proceeds in a deposit account shall
             2681      be determined solely by the books and records of the institution.
             2682          (c) Any contract purporting to affect the right of setoff [must] shall be in writing and
             2683      signed by the depositor-debtor and an authorized officer of the institution and be maintained as
             2684      a part of the records of the institution.
             2685          (d) Any claim that a deposit account is a special account not subject to setoff because it
             2686      was maintained for a specific purpose or to satisfy a particular obligation other than satisfaction
             2687      of or as security for an indebtedness to the institution or that the right to the deposit actually
             2688      belongs to a third party [shall not] does not affect the right to setoff of the commissioner or any
             2689      receiver or liquidator appointed by him unless the special nature of the account is clearly
             2690      shown in the books and records of the institution.
             2691          (e) In the absence of any other instrument in writing, the terms and provisions of the
             2692      signature card applicable to a particular account in effect at the time the commissioner takes
             2693      possession of the institution shall be determinative of the right of setoff by the commissioner or


             2694      any receiver or liquidator appointed by him.
             2695          (f) Knowledge of the institution or of any director, officer, or employee of the
             2696      institution that the nature of the account is other than as shown in the books and records of the
             2697      institution [shall not] does not affect the right of setoff by the commissioner or any receiver or
             2698      liquidator appointed by him.
             2699          (g) The liability of the commissioner or any receiver or liquidator appointed by him for
             2700      exercising a right of setoff other than as authorized by this section shall be only to a person
             2701      who establishes by the procedure set forth in Section 7-2-6 that his interest in the account is
             2702      superior to that of the person whose debt to the institution was setoff against the account. The
             2703      amount of any such liability shall be no greater than the amount of the setoff and neither the
             2704      commissioner or any receiver or liquidator appointed by him shall be liable for any action taken
             2705      under this section unless the action taken is determined by the court to be arbitrary or
             2706      capricious.
             2707          Section 77. Section 7-5-2 is amended to read:
             2708           7-5-2. Permit required to engage in trust business -- Exceptions.
             2709          (1) No trust company shall accept any appointment to act in any agency or fiduciary
             2710      capacity, [such as but not limited to] including that of personal representative, executor,
             2711      administrator, conservator, guardian, assignee, receiver, depositary, or trustee under order or
             2712      judgment of any court or by authority of any law of this state or as trustee for any purpose
             2713      permitted by law or otherwise engage in the trust business in this state, unless and until it has
             2714      obtained from the commissioner a permit to act under this chapter. This provision [shall not]
             2715      does not apply to any bank or other corporation authorized to engage and lawfully engaged in
             2716      the trust business in this state before July 1, 1981.
             2717          (2) Nothing in this chapter prohibits:
             2718          (a) any corporation organized under Title 16, Chapter 6a or 10a, from acting as trustee
             2719      of any employee benefit trust established for the employees of the corporation or the employees
             2720      of one or more other corporations affiliated with the corporation;
             2721          (b) any corporation organized under Title 16, Chapter 6a, Utah Revised Nonprofit
             2722      Corporation Act, and owned or controlled by a charitable, benevolent, eleemosynary, or
             2723      religious organization from acting as a trustee for that organization or members of that
             2724      organization but not offering trust services to the general public;


             2725          (c) any corporation organized under Title 16, Chapter 6a or 10a, from holding in a
             2726      fiduciary capacity the controlling shares of another corporation but not offering trust services to
             2727      the general public; or
             2728          (d) any depository institution from holding in an agency or fiduciary capacity individual
             2729      retirement accounts or Keogh plan accounts established under Section 401(a) or 408(a) of Title
             2730      26 of the United States Code.
             2731          Section 78. Section 7-5-4 is amended to read:
             2732           7-5-4. Withdrawal from trust business.
             2733          Any trust company which desires to withdraw from and discontinue doing a trust
             2734      business shall furnish to the commissioner satisfactory evidence of its release and discharge
             2735      from all the obligations and trusts undertaken by it, and after the company has furnished that
             2736      evidence the commissioner shall revoke his certificate of authority to do a trust business
             2737      previously issued to that trust company, and thereafter that trust company [shall not] may not
             2738      be permitted to use and [shall not] may not use the word "trust" in its corporate name or in
             2739      connection with its business, nor undertake the administration of any trust business.
             2740          Section 79. Section 7-5-7 is amended to read:
             2741           7-5-7. Management and investment of trust funds.
             2742          (1) Funds received or held by any trust company as agent or fiduciary, whether for
             2743      investment or distribution, shall be invested or distributed as soon as practicable as authorized
             2744      under the instrument creating the account and [shall not] may not be held uninvested any
             2745      longer than is reasonably necessary.
             2746          (2) If the instrument creating an agency or fiduciary account contains provisions
             2747      authorizing the trust company, its officers, or its directors to exercise their discretion in the
             2748      matter of investments, funds held in the trust account under that instrument may be invested
             2749      only in those classes of securities which are approved by the directors of the trust company or a
             2750      committee of directors appointed for that purpose. If a trust company acts in any agency or
             2751      fiduciary capacity under appointment by a court of competent jurisdiction, it shall make and
             2752      account for all investments according to the provisions of Title 75, Utah Uniform Probate
             2753      Code, unless the underlying instrument provides otherwise.
             2754          (3) (a) Funds received or held as agent or fiduciary by any trust company which is also
             2755      a depository institution, whether for investment or distribution, may be deposited in the


             2756      commercial department or savings department of that trust company to the credit of its trust
             2757      department. Whenever the funds so deposited in a fiduciary or managing agency account
             2758      exceed the amount of federal deposit insurance applicable to that account, the trust company
             2759      shall deliver to the trust department or put under its control collateral security as outlined in
             2760      Regulation 9.10 of the Comptroller of the Currency or in Regulation 550.8 of the Office of
             2761      Thrift Supervision, as amended. However, if the instrument creating such a fiduciary or
             2762      managing agency account expressly provides that funds may be deposited to the commercial or
             2763      savings department of the trust company, then the funds may be so deposited without setting
             2764      aside collateral securities as required under this section and the deposits in the event of
             2765      insolvency of any such trust company shall be treated as other general deposits are treated. A
             2766      trust company which deposits trust funds in its commercial or savings department shall be
             2767      liable for interest on the deposits only at the rates, if any, paid by the trust company on deposits
             2768      of like kind not made to the credit of its trust department.
             2769          (b) Funds received or held as agent or fiduciary by a trust company, whether for
             2770      investment or distribution, may be deposited in an affiliated depository institution. Whenever
             2771      the funds so deposited in a fiduciary or managing agency account exceed the amount of federal
             2772      deposit insurance applicable to that account, the depository institution shall deliver to the trust
             2773      company or put under its control collateral security as outlined in Regulation 9.10 of the
             2774      Comptroller of the Currency or in Regulation 550.8 of the Office of Thrift Supervision as
             2775      amended. However, if the instrument creating the fiduciary or managing agency account
             2776      expressly permits funds to be deposited in the affiliated depository institution, the funds may be
             2777      so deposited without setting aside collateral securities as required under this section and
             2778      deposits in the event of insolvency of the depository institution shall be treated as other general
             2779      deposits are treated. A trust company which deposits trust funds in an affiliated depository
             2780      institution is liable for interest on the deposits only at the rates, if any, paid by the depository
             2781      institution on deposits of like kind.
             2782          (4) In carrying out all aspects of its trust business, a trust company shall have all the
             2783      powers, privileges, and duties as set forth in Sections 75-7-813 and 75-7-814 with respect to
             2784      trustees, whether or not the trust company is acting as a trustee as defined in Title 75.
             2785          (5) Nothing in this section may alter, amend, or limit the powers of a trust company
             2786      acting in a fiduciary capacity as specified in the particular instrument or order creating the


             2787      fiduciary relationship.
             2788          Section 80. Section 7-5-8 is amended to read:
             2789           7-5-8. Segregation of trust assets -- Books and records required -- Examination --
             2790      Trust property not subject to claims or debts against trust company.
             2791          A trust company exercising the powers to act as an agent or fiduciary under this chapter
             2792      shall segregate all assets held in any agency or fiduciary capacity from the general assets of the
             2793      company and shall keep a separate set of books and records showing in proper detail all
             2794      transactions engaged in under authority of this chapter. These books and records shall be open
             2795      to inspection by the commissioner and shall be examined by him or by examiners appointed by
             2796      him as provided in Chapter 1 or examined by other appropriate regulating agencies or both.
             2797      Property held in an agency or fiduciary capacity by a trust company [shall not be] is not subject
             2798      to claims or debts against the trust company.
             2799          Section 81. Section 7-5-11 is amended to read:
             2800           7-5-11. Self-dealing with trust property -- Own stock as trust property -- Policies
             2801      for dealing with trust securities.
             2802          (1) Except as provided in Section 7-5-7 , in Title 75, or as authorized under the
             2803      instrument creating the relationship, a trust company [shall not] may not invest funds held as an
             2804      agent or fiduciary in stock or obligations of, or with such funds acquire property from, the trust
             2805      company or any of its directors, officers or employees, nor shall a trust company sell property
             2806      held as an agent or fiduciary to the company or to any of its directors, officers, or employees.
             2807          (2) A trust company may retain and vote stock of the trust company or of any of its
             2808      affiliates received by it as assets of any trust account or in any other fiduciary relationship of
             2809      which it is appointed agent or fiduciary, unless the instrument creating the relationship
             2810      otherwise provides.
             2811          (3) Every trust company shall adopt written policies and procedures regarding
             2812      decisions or recommendations to purchase or sell any security to facilitate compliance with
             2813      federal and state securities laws. These policies and procedures, in particular, shall prohibit the
             2814      trust company from using material inside information in connection with any decision or
             2815      recommendation to purchase or sell any security.
             2816          Section 82. Section 7-7-2 is amended to read:
             2817           7-7-2. Definitions.


             2818          As used in this chapter:
             2819          (1) "Association" means a mutual or capital stock savings association, a savings and
             2820      loan association, a mutual or capital stock savings bank, or a building and loan association
             2821      subject to the provisions of this chapter, including all out-of-state associations qualified to do
             2822      business in this state.
             2823          (2) "Federal association" means a savings association, a savings and loan association,
             2824      or a savings bank, chartered by the Office of Thrift Supervision or successor federal agency.
             2825          (3) "Impaired condition" means a condition in which the assets of an association in the
             2826      aggregate do not have a fair value equal to the aggregate amount of liabilities of the association
             2827      to its creditors, including the holders of its savings accounts and all other persons.
             2828          (4) "Insured association" means an association the deposit accounts of which are
             2829      insured by the Federal Deposit Insurance Corporation or any successor agency of the federal
             2830      government.
             2831          (5) "Liquid assets" means cash on hand and cash on deposit in federal home loan
             2832      banks, federal reserve banks, state banks performing similar reserve functions, or in
             2833      commercial banks, which cash is withdrawable upon not more than 30 days notice and which is
             2834      not pledged as security for indebtedness. Any deposits in a financial institution under the
             2835      control or in the possession of any supervisory authority [shall not] may not be considered as
             2836      liquid assets. Liquid assets also means obligations of, or obligations that are fully guaranteed
             2837      as to principal and interest by, the United States, the Federal National Mortgage Association,
             2838      the Government National Mortgage Association, any federal home loan bank, or this state,
             2839      which obligations will mature in five years or less, and any other assets readily convertible into
             2840      cash.
             2841          (6) "Out-of-state association" means an association whose home state is not Utah.
             2842          (7) "Real estate loan" means any loan or other obligation secured by a lien on real
             2843      estate in any state held in fee or in a leasehold, and any transaction out of which a lien or its
             2844      equivalent is created against real estate, including the purchase of real estate in fee by an
             2845      association and the concurrent or immediate sale of the real estate on installment contract.
             2846          (8) "Savings liability" means the aggregate amount of savings accounts of depositors,
             2847      including earnings credited to those accounts, less redemptions and withdrawals.
             2848          (9) "Service organization" means an organization substantially all the activities of


             2849      which consist of originating, purchasing, selling, or servicing loans and participating interests
             2850      therein, or clerical, bookkeeping, accounting, statistical, or other similar functions or any
             2851      combination thereof performed primarily for financial institutions, plus such other activities as
             2852      the commissioner may approve.
             2853          (10) "Supervisor" means the supervisor of savings and loan associations.
             2854          (11) "Surplus" means the aggregate amount of the undistributed net income of an
             2855      association held as undivided profits or unallocated reserves for general corporate purposes,
             2856      and any paid-in surplus held by an association.
             2857          (12) "Withdrawal value" means the amount credited to a savings account less lawful
             2858      deductions, as shown by the records of the association.
             2859          Section 83. Section 7-7-4 is amended to read:
             2860           7-7-4. Mutual association -- Chair of incorporators -- Surety bond or escrow --
             2861      Capital requirements -- Expense fund -- Organization meeting.
             2862          (1) The incorporators of a mutual association shall appoint one of their number as chair
             2863      of the incorporators. This chair shall procure from a surety company or other surety
             2864      acceptable to the commissioner, a surety bond in an amount at least equal to the amount
             2865      subscribed by the incorporators plus the expense fund described in Subsection (2). This bond
             2866      shall name the commissioner as obligee and shall be delivered to him. It shall assure the
             2867      safekeeping of the funds described, their delivery to the association after the issuance of the
             2868      certificate of authority and after the bonding of the officers, and, in the event of the failure to
             2869      complete organization, the return of the amounts collected to the respective subscribers or their
             2870      assigns, less reasonable expense which shall be deducted from the expense fund. The required
             2871      surety may be waived by the commissioner if the funds are held in escrow so as to provide
             2872      similar assurance with regard to the funds. Before a certificate of authority is issued, the
             2873      incorporators shall pay in cash, to the chairman, as subscriptions to the savings accounts of the
             2874      proposed association, including that part of the original subscription paid by the chairman. The
             2875      minimum required capital shall be prescribed by the commissioner by rule. These capital
             2876      requirements may not be greater than those required by the Office of Thrift Supervision or
             2877      successor agency for the formation of a federally chartered mutual association.
             2878          (2) The incorporators, in addition to their subscriptions to savings accounts, shall
             2879      create an expense fund in an amount not less than 25% of the minimum amount of savings


             2880      account subscriptions required to be paid under this chapter. From this expense fund the
             2881      expense of organizing the association and its operating expenses may be paid until such time as
             2882      its net income is sufficient to pay such earnings as may be declared and paid or credited to its
             2883      savings account holders from sources available for payment of earnings. The incorporators and
             2884      others, before a certificate of authority is issued, shall deposit to the credit of the chairman of
             2885      the incorporators in cash the amount of the expense fund. The amounts contributed to the
             2886      expense fund by the incorporators and others [shall not] do not constitute a liability of the
             2887      association except as provided by this chapter.
             2888          (3) Contributions made by the incorporators and others to the expense fund may be
             2889      repaid pro rata to the contributors from the net income of the association after provision for
             2890      statutory reserves and declaration of earnings of not less than 2% on savings accounts. If an
             2891      association is liquidated before contributions to the expense fund have been repaid, any
             2892      contributions to the expense fund remaining unexpended, after the payment of expenses of
             2893      liquidation, all creditors, and the withdrawal value of all savings accounts, shall be repaid to
             2894      the contributors pro rata. The books of the association shall reflect the expense fund.
             2895      Contributors to the expense fund shall at the times earnings regularly are distributed to savings
             2896      account holders be paid earnings on the amounts paid in by them and for that purpose the
             2897      contributions shall in all respects be considered as savings accounts of the association.
             2898          (4) Within 90 days after the corporate existence of an association begins, the directors
             2899      of the association shall hold an organization meeting and shall adopt bylaws and elect officers
             2900      under this chapter. At the organization meeting the directors shall take such other action as is
             2901      appropriate in connection with beginning the transaction of business by the association. The
             2902      commissioner may extend by order the time within which the organization meeting shall be
             2903      held.
             2904          Section 84. Section 7-7-7 is amended to read:
             2905           7-7-7. Conversion of associations.
             2906          (1) Any state or federal mutual association and any federal capital stock association
             2907      may convert to a state capital stock association, and any state or federal capital stock
             2908      association and any federal mutual association may convert to a state mutual association upon
             2909      an equitable basis subject to the laws and rules governing the converting association, the
             2910      approval of the commissioner, the approval of the members or stockholders of the converting


             2911      association, and any rules adopted by the commissioner under this subsection.
             2912          (a) Upon receipt of the approval of a proposed conversion from the commissioner, a
             2913      converting association may, under the supervision of the supervisor, carry out the plan of
             2914      conversion. A record of all acts and proceedings taken by the board of directors of the
             2915      converting association in carrying out the proposed conversion shall be filed with the
             2916      supervisor.
             2917          (b) Upon the issuance to an applicant of a certificate of conversion, the corporate
             2918      existence of the converting applicant [shall not] does not terminate, but the applicant shall be a
             2919      continuation of the entity so converted. All property of the converting applicant, including its
             2920      rights, titles, and interests in and to all property of whatever kind, whether real, personal, or
             2921      mixed, things in action, and every right, privilege, interest and asset of any conceivable value
             2922      or benefit then existing, or pertaining to it, or which would inure to it, immediately, by
             2923      operation of law and without any conveyance or transfer and without any further act or deed,
             2924      shall vest in and remain the property of the converted applicant, and the same shall have, hold,
             2925      and enjoy that property in its own right as fully and to the same extent as that property was
             2926      possessed, held, and enjoyed by the converting applicant before the conversion, and the
             2927      converted applicant, upon issuance of the certificate of the conversion, shall continue to have
             2928      and succeed to all the rights, obligations, and relations of the converting applicant. Pending
             2929      actions and other judicial proceedings to which the converting applicant is a party [shall not be]
             2930      are not abated or discontinued by reason of the conversion, but may be prosecuted to final
             2931      judgment, order, or decree in the same manner as if conversion had not occurred, and the
             2932      converted applicant may continue the actions in its new corporate name. Any judgment, order,
             2933      or decree may be rendered for or against it which might have been rendered for or against the
             2934      converting applicant involved before the conversion in the proceedings.
             2935          (c) A conversion carried out under this Subsection (1) is effective on the date that all
             2936      provisions of this chapter and the rules adopted under it have been complied with and a
             2937      certificate of conversion has been issued by the commissioner.
             2938          (d) In adopting rules or issuing orders in connection with the conversion of an
             2939      association, the commissioner shall ensure that:
             2940          (i) accurate and adequate disclosure of the terms and effects of plans of conversion are
             2941      provided to purchasers of capital stock in resulting associations, including account holders of


             2942      converting mutual associations;
             2943          (ii) adjustments are made in plans of conversion to be effected by way of merger or
             2944      holding company acquisition necessary or appropriate to accomplish the purposes of this
             2945      section;
             2946          (iii) plans of conversion and proxy statements, offering circulars and related
             2947      instruments and actions implementing those plans are subject to review and approval by the
             2948      appropriate supervisory authorities;
             2949          (iv) the capital stock issued as a part of conversion is fairly and independently valued
             2950      and priced;
             2951          (v) the capital stock is allocated and distributed fairly and without employment of
             2952      manipulative or deceptive devices;
             2953          (vi) appropriate provision is made regarding fractional share interest and minimum
             2954      capital stock purchase requirements; and
             2955          (vii) plans of conversion are adopted and implemented in such form and manner that
             2956      stability and continuity of management are encouraged and that the stability, safety, and
             2957      soundness of associations and other financial institutions are not impaired. In no event shall
             2958      any rule or order issued by the commissioner regarding the conversion of an association make
             2959      it more difficult for an association subject to those rules or orders to implement conversion
             2960      than for an association subject only to federal laws and regulations.
             2961          (e) A conversion proposed by a domestic association shall, after approval by the
             2962      commissioner, be submitted to the members or stockholders at an annual meeting or at a
             2963      special meeting called to consider that action. The conversion [must] shall have the approval
             2964      of a majority of the total votes eligible to be cast by members or stockholders at the meeting.
             2965      Notice shall be given of any meeting at which a conversion is to be considered. The notice
             2966      shall expressly state that a proposed conversion will be submitted for approval or disapproval,
             2967      include a full and accurate description of the plan of conversion and all other matters to be
             2968      brought before the meeting, state that a proxy for the meeting given previously is revocable,
             2969      and state the time, date, and place of the meeting. The notice shall be mailed at least 20 days
             2970      prior to the date of the meeting to each voting member or stockholder of the converting
             2971      association addressed to his address shown on the records of the association and to the
             2972      supervisor or commissioner.


             2973          (f) If the commissioner finds that a conversion proceeding has been completed in
             2974      accordance with the requirements of this section and any other applicable law and rules, he
             2975      shall issue to the applicant a certificate of conversion, attaching as a part of the certificate a
             2976      copy of the charter, articles of incorporation, articles of association, or similar instrument. The
             2977      commissioner shall also cause the same to be filed with the Division of Corporations and
             2978      Commercial Code.
             2979          (2) Any state mutual or state capital stock association eligible under federal law or
             2980      regulations to become a federal association may convert to a federal association by following
             2981      the procedure outlined in this Subsection (2).
             2982          (a) At any regular meeting or at any special meeting of the members or stockholders of
             2983      the association called to consider the action and held in accordance with the laws governing the
             2984      association, the members or stockholders by majority vote of those present or voting by proxy
             2985      may declare by resolution the determination to convert the association into a federal
             2986      association.
             2987          (b) A copy of the minutes of the meeting of the members or shareholders verified by
             2988      the affidavit of the president or vice president and the secretary of the meeting shall be, within
             2989      10 days after the meeting, filed with the commissioner. This verified copy of the minutes of
             2990      the meeting, when so filed, shall be presumptive evidence of the holding of the meeting and of
             2991      the action there taken by the members or stockholders.
             2992          (c) Within a reasonable time and without any unnecessary delay after the adjournment
             2993      of the meeting of shareholders, the association shall take such action as may be necessary under
             2994      requirements of the Office of Thrift Supervision or other federal agency to make it a federal
             2995      association, and within 10 days after receipt of the federal charter there shall be filed with the
             2996      commissioner a copy of the charter or a certificate showing the organization of the association
             2997      as a federal association, certified by or on behalf of the Office of Thrift Supervision or other
             2998      federal agency. Upon the filing of these instruments the association shall cease to be a state
             2999      association and shall thereafter be a federal association.
             3000          (d) Upon completion of a conversion to a federal association, the corporate existence
             3001      of the converting association [shall not] does not terminate, but the association shall be a
             3002      continuation of the entity so converted. All property of the converting association, including its
             3003      rights, titles, and interests in and to all property of whatever kind, whether real, personal, or


             3004      mixed, things in action, and every right, privilege, interest, and asset of any conceivable value
             3005      or benefit then existing, or pertaining to it, or which would inure to it, immediately, by
             3006      operation of law and without any conveyance or transfer and without any further act or deed,
             3007      shall vest in and remain the property of the converted association, and the same shall have,
             3008      hold, and enjoy that property in its own right as fully and to the same extent as that property
             3009      was possessed, held, and enjoyed by the converting association, and the converted association
             3010      shall continue to have and succeed to all the rights, obligations, and relations of the converting
             3011      association. All pending actions and other judicial proceedings to which the converting
             3012      association is a party [shall not be] are not abated or discontinued by reason of the conversion,
             3013      but may be prosecuted to final judgment, order, or decree in the same manner as if the
             3014      conversion had not been made, and the converted association may continue the actions in its
             3015      new corporate name. Any judgment, order, or decree may be rendered for or against it which
             3016      might have been rendered for or against the converting association before the conversion
             3017      involved in the proceedings.
             3018          (e) Upon the completion of a conversion to a federal association, the converted
             3019      association shall cease to be supervised by the commissioner or by this state except as a federal
             3020      association.
             3021          Section 85. Section 7-7-14 is amended to read:
             3022           7-7-14. Bonding of directors, officers, employees, and collection agents.
             3023          Each director, officer, and employee of an association shall, before entering upon the
             3024      performance of any duty, execute an individual bond with adequate corporate surety payable to
             3025      the association as an indemnity for any loss the association may sustain of money or other
             3026      property by or through any fraud, dishonesty, forgery or alteration, larceny, theft,
             3027      embezzlement, robbery, burglary, hold-up, wrongful or unlawful abstraction, misapplication,
             3028      misplacement, destruction or misappropriation, or any other dishonest or criminal act or
             3029      omission by the director, officer, employee, or agent. An association which employs collection
             3030      agents, who for any reason are not covered by a bond as hereinabove required, shall provide for
             3031      the bonding of each such agent in an amount equal to at least twice the average monthly
             3032      collection of the agent. No bond coverage will be required of any agent which is a financial
             3033      institution insured by the Federal Deposit Insurance Corporation or other federal deposit
             3034      insurance agency. In lieu of individual bonds, a blanket bond, protecting the association from


             3035      loss through any such act or acts on the part of any such director, officer, or employee, may be
             3036      obtained. A true copy of every such indemnity bond shall be on file at all times with the
             3037      supervisor. Each bond shall provide that a cancellation of the bond either by the surety or by
             3038      the insured [shall not] does not become effective unless and until 10 days notice in writing first
             3039      has been given to the supervisor, unless he has approved the cancellation earlier.
             3040          Section 86. Section 7-7-15 is amended to read:
             3041           7-7-15. Fiduciary relationship of directors and officers to association --
             3042      Disclosure requirements -- Prohibitions -- Violations as misdemeanors.
             3043          (1) (a) Directors and officers occupy fiduciary relationships to the association of which
             3044      they are directors or officers. No director or officer may engage or participate, directly or
             3045      indirectly, in any business or transaction conducted on behalf of or involving the association,
             3046      which would result in a conflict of his own personal interests with those of the association
             3047      which he serves, unless:
             3048          (i) the business or transactions are conducted in good faith and are honest, fair, and
             3049      reasonable to the association;
             3050          (ii) a full disclosure of the business or transactions and the nature of the director's or
             3051      officer's interest is made to the board of directors;
             3052          (iii) the business or transactions are approved in good faith by the board of directors,
             3053      any interested director abstaining; and
             3054          (iv) the business or transactions do not represent a breach of the officer's or director's
             3055      fiduciary duty and are not fraudulent, illegal, or ultra vires.
             3056          (b) Without limitation by any of the specific provisions of this section, the supervisor
             3057      may require the disclosure by directors, officers and employees of their personal interest, direct
             3058      or indirect, in any business or transaction on behalf of or involving the association and of their
             3059      control of or active participation in enterprises having activities related to the business of the
             3060      association.
             3061          (2) The following express restrictions governing the conduct of directors and officers
             3062      of associations shall apply, but [shall not] may not be construed in any manner as excusing
             3063      those persons from the observance of any other aspect of the general fiduciary duty owed by
             3064      them to the association which they serve:
             3065          (a) No officer or director of an association may, without the prior written approval of


             3066      the commissioner, serve as a director or officer of another savings institution, the principal
             3067      office of which is located in the same community as an office of the association, unless he
             3068      served as director or officer of both institutions before the effective date of this act.
             3069          (b) A director may not receive remuneration as a director, except reasonable fees for
             3070      service as a director or for service as a member of a committee of directors. This subsection
             3071      does not prohibit or in any way limit any right of a director who is also an officer, employee, or
             3072      attorney for the association to receive compensation for service as an officer, employee, or
             3073      attorney.
             3074          (c) No director or officer may have any interest, directly or indirectly, in the proceeds
             3075      of a loan or investment or of a purchase or sale made by the association, unless the loan,
             3076      investment, purchase, or sale is authorized expressly by resolution of the board of directors,
             3077      and unless the resolution is approved by vote of at least two-thirds of the directors authorized
             3078      of the association, any interested director taking no part in the vote.
             3079          (d) No director or officer may have any interest, direct or indirect, in the purchase at
             3080      less than its face value of any evidence of a savings account, deposit or other indebtedness
             3081      issued by the association.
             3082          (e) An association or a director, officer, or employee of an association may not require,
             3083      as a condition to the granting of any loan or the extension of any other service by the
             3084      association, that the borrower or any other person undertake a contract of insurance or any
             3085      other agreement or understanding with respect to the furnishing of any other goods or services,
             3086      with any specific company, agency, or individual.
             3087          (f) No officer or director acting as proxy for a member or stockholder of an association
             3088      may exercise, transfer, or delegate the proxy vote or votes in consideration of a private benefit
             3089      or advantage, direct or indirect, accruing to himself, nor may he surrender control or pass his
             3090      office to any other for any consideration of a private benefit or advantage, direct or indirect.
             3091      The voting rights of members and directors may not be the subject of sale, barter, exchange, or
             3092      similar transaction, either directly or indirectly. Any officer or director who violates this
             3093      subsection shall be held accountable to the association for any increment.
             3094          (g) No director or officer may solicit, accept, or agree to accept, directly or indirectly,
             3095      from any person other than the association any gratuity, compensation or other personal benefit
             3096      for any action taken by the association or for endeavoring to procure any such action.


             3097          (h) Any person violating any of the specific prohibitions set forth in Subsections (a)
             3098      through (g) is guilty of a class C misdemeanor.
             3099          Section 87. Section 7-7-17 is amended to read:
             3100           7-7-17. Indemnification of directors, officers, and employees.
             3101          A person who is made a party in or threatened by any action, suit or proceeding, judicial
             3102      or administrative, civil or criminal, by reason of his or her being or having been a director,
             3103      officer or employee of an association shall be indemnified or reimbursed by the association for
             3104      reasonable expenses, including [but not limited to attorney's] attorney fees, actually incurred by
             3105      him or her in connection with that action, suit or proceeding, instituted or threatened, except
             3106      that no person need be so indemnified or reimbursed, and a person may be required to return
             3107      any advancement or allowance for indemnification which may have been made by the
             3108      association in advance of final disposition, in relation to such an action, suit or proceeding in
             3109      which and to the extent that he finally is adjudicated to have been guilty of a breach of good
             3110      faith, to have been negligent in the performance of his duties or to have committed an action or
             3111      failed to perform a duty for which there is a common law or a statutory liability; though a
             3112      person may be indemnified or reimbursed for: (1) amounts paid in compromise or settlement of
             3113      any action, suit or proceeding, including reasonable expenses incurred in connection therewith,
             3114      or (2) reasonable expenses including fines and penalties, incurred in connection with a criminal
             3115      or civil action, suit or proceeding in which the person has been adjudicated guilty, negligent or
             3116      liable, if it is determined by the board of directors that the person was acting in good faith and
             3117      in what he believed to be the best interests of the association and without knowledge that the
             3118      action was illegal, and if the indemnification or reimbursement is approved at an annual or
             3119      special meeting of the members or stockholders by a majority of the votes eligible to be cast.
             3120      Amounts paid to the association, whether pursuant to judgment or settlement, by any person
             3121      within the meaning of this section [shall not] may not be indemnified or reimbursed in any
             3122      case.
             3123          Section 88. Section 7-7-19 is amended to read:
             3124           7-7-19. Record and accounting requirements -- Valuation of assets.
             3125          (1) Every association shall keep at the home office correct and complete books of
             3126      accounts, membership or stockholder records, and minutes of the proceedings of members,
             3127      stockholders, and directors. Complete records of all business transacted at the home office shall


             3128      be maintained at the home office. Control records of all business transacted at each branch
             3129      office or agency shall be maintained at the home office.
             3130          (2) Each branch office shall keep detailed records of all transactions at that branch
             3131      office and shall furnish full control records to the home office.
             3132          (3) Each agent of an association shall prepare an original record of each business
             3133      transaction of the association conducted by the agent and shall report promptly to the home
             3134      office. Complete detailed permanent records of the transactions are not required to be
             3135      maintained at the agency, but may be maintained at a branch or home office of the association.
             3136          (4) Every association shall close its books at the close of business at least annually or
             3137      more often if required for all associations by the commissioner.
             3138          (5) No association by any system of accounting or any device of bookkeeping shall,
             3139      either directly or indirectly, enter any of its assets upon its books in the name of any other
             3140      person, partnership, association, or corporation or under any title or designation that is not
             3141      fairly descriptive of the assets.
             3142          (6) The commissioner, after a determination of value made in accordance with this
             3143      chapter, may order that assets, individually or in the aggregate, to the extent that the assets are
             3144      overvalued on an association's books, be charged off, or that a special reserve or reserves equal
             3145      to the overvaluation be set up by transfers from undivided profits or reserves.
             3146          (7) An association [shall not] may not carry any real estate on its books at a sum in
             3147      excess of the total amount invested by the association on account of that real estate, including
             3148      advances, costs, and improvements but excluding accrued but uncollected interest.
             3149          (8) Every association shall have appraised each parcel of real estate acquired at the
             3150      time of acquisition. The report of each such appraisal shall be submitted in writing to the board
             3151      of directors and shall be kept in the records of the association.
             3152          (9) Every association shall maintain complete loan and investment records in a manner
             3153      satisfactory to the commissioner. Each record of a real estate loan or other secured loan or
             3154      investment shall contain documentation to the satisfaction of the commissioner of the type,
             3155      adequacy and complexion of the security.
             3156          (10) Every mutual association shall maintain membership records, which shall show
             3157      the name and address of the members, the status of each member as a savings account holder,
             3158      or an obligor, or a savings account holder and obligor, and the date membership began. In the


             3159      case of a member holding a savings account, the association shall obtain a savings account
             3160      contract, which may be a signature card, containing the signature of each holder of the account
             3161      or his duly authorized representative, and shall preserve the contract in the records of the
             3162      association.
             3163          (11) Every capital stock association shall maintain a register of investors and stock
             3164      transfers which shows the name and address of the stockholder, the type of stock and voting
             3165      status of the stockholder, and the date each share of stock was acquired.
             3166          (12) Every association shall use such forms and keep such records, including without
             3167      limitation, those of its members or stockholders, as the commissioner may from time to time
             3168      require.
             3169          Section 89. Section 7-7-21 is amended to read:
             3170           7-7-21. Powers of associations.
             3171          (1) Every association incorporated or operating under the provisions of this chapter
             3172      shall have all the powers enumerated, authorized, and permitted by this chapter and such other
             3173      rights, privileges, and powers as may be incidental to or reasonably necessary or appropriate for
             3174      the accomplishment of the objects and purposes of the association.
             3175          (2) Among others, and except as otherwise limited by the provisions of this chapter,
             3176      every association shall have the following powers:
             3177          (a) to have perpetual existence, to adopt and use a corporate seal, which may be affixed
             3178      by imprint, facsimile, or otherwise; and to adopt and amend bylaws as provided in this chapter;
             3179          (b) to sue, be sued, complain, and defend in any court;
             3180          (c) (i) to acquire, hold, sell, dispose of, and convey real and personal estate consistent
             3181      with the association's objects and powers;
             3182          (ii) to mortgage, pledge, or lease any real or personal estate; and
             3183          (iii) to take property by gift, devise, or bequest;
             3184          (d) if and when an association is not a member of a federal home loan bank, to borrow
             3185      from sources, individual or corporate, in addition to its savings liability and other accounts, not
             3186      more than an aggregate amount equal to 25% of its assets on the date of borrowing. If and
             3187      when an association is a member of a federal home loan bank, to borrow from sources,
             3188      individual or corporate, in addition to its savings liability and other accounts, not more than an
             3189      aggregate amount equal to 60% of its assets on the date of borrowing or a greater amount


             3190      approved by the commissioner to insure parity between state chartered savings and loan
             3191      associations and federal associations. It is not a violation of this section if the borrowing limits
             3192      are exceeded because of a subsequent reduction in assets of an association. Any association
             3193      may borrow such additional sums as the commissioner may approve in writing. All such loans
             3194      and advances may be secured by property of the association, may be made with convertible
             3195      features, and may be evidenced by such notes, bonds, debentures, commercial paper, bankers'
             3196      acceptances, or other obligations or securities (except capital stock and capital certificates) as
             3197      may be generally authorized by the commissioner, except that no authorization shall be
             3198      required for securities guaranteed under Section 306(g) of the National Housing Act of 1934;
             3199          (e) to issue and sell, directly or through underwriters, capital certificates containing a
             3200      stated maturity date which represent nonwithdrawable capital contributions, and constitute part
             3201      of the reserves and net worth of the association. These certificates shall have no voting rights,
             3202      shall be subordinate to all savings accounts, debt obligations, and claims of creditors of the
             3203      association and shall constitute a claim in liquidation against any reserves, surplus, and other
             3204      net worth accounts remaining after the payment in full of all savings accounts, debt obligations,
             3205      and claims of creditors. The capital certificates shall be entitled to the payment of earnings
             3206      prior to the allocation of any income to surplus or other net worth accounts of the association
             3207      and may be issued with a fixed rate of earnings or with a prior claim to distribution of a
             3208      specified percentage of any net income remaining after required allocations to reserves, or a
             3209      combination thereof. Losses shall be charged against capital certificates only after reserves,
             3210      surplus, and other net worth accounts have been exhausted;
             3211          (f) (i) to appoint and remove such officers, agents, and employees as its business shall
             3212      require and to provide them suitable compensation;
             3213          (ii) to enter into employment contracts not to exceed 10 years without the consent of
             3214      the supervisor;
             3215          (iii) to provide for life, health, and casualty insurance for officers and employees;
             3216          (iv) to adopt and operate reasonable bonus and incentive plans and retirement benefits
             3217      for those officers and employees; and
             3218          (v) to provide for indemnification of its officers, employees, and directors as required
             3219      or permitted in this chapter, whether by insurance or otherwise;
             3220          (g) to obtain and maintain insurance of its deposits by the Federal Deposit Insurance


             3221      Corporation or other federal deposit insurance agency;
             3222          (h) to qualify as and become a member of any federal home loan bank;
             3223          (i) (i) to act as fiscal agent of the United States, and, when so designated by the
             3224      Secretary of the Treasury, to perform, under such regulations as the Secretary of the Treasury
             3225      may prescribe, all such reasonable duties as fiscal agent of the United States as the Secretary of
             3226      the Treasury may require; and
             3227          (ii) to act as agent for any instrumentality of the United States; and when so designated
             3228      by the state treasurer or other appropriate state officer, to act as agent of that state or any
             3229      instrumentality of that state;
             3230          (j) to become a member of, deal with, maintain reserves or deposits with, or make
             3231      reasonable payments or contributions to any organization or instrumentality, government or
             3232      private, to the extent that the organization or instrumentality assists in furthering or facilitating
             3233      the association's purposes, powers, services, or community responsibilities, and to comply with
             3234      any reasonable requirements or conditions of eligibility;
             3235          (k) to act as depository for receipt of payments of federal or state taxes and loan funds,
             3236      and satisfy any federal or state statutory or regulatory requirements in connection therewith,
             3237      including:
             3238          (i) pledging of assets as collateral;
             3239          (ii) payment of earnings at prescribed rates; and
             3240          (iii) notwithstanding any other provision of this chapter, issuing the account subject to
             3241      rights of immediate withdrawal;
             3242          (l) to sell or assign any loan, including any participating interest therein, at any time;
             3243          (m) to service loans and investments for others;
             3244          (n) to act and receive compensation as trustee of any trust created or organized in the
             3245      United States and forming a part of a stock bonus, pension, or profit-sharing plan which
             3246      qualifies or qualified for specific tax treatment under Section 401 of the Internal Revenue Code
             3247      of 1986, and to act as trustee or custodian of an individual retirement account within the
             3248      meaning of Section 408 of that code. All funds held in fiduciary capacity by any such
             3249      association under the authority of this subsection may be commingled and consolidated for
             3250      appropriate purposes of investment, so long as records reflecting each separate beneficial
             3251      interest are maintained by the fiduciary, unless that responsibility is lawfully assumed by


             3252      another appropriate party;
             3253          (o) to act as assignee, agent, receiver, trustee, executor, administrator, conservator,
             3254      guardian, custodian, personal representative, or in any other fiduciary capacity, and to execute
             3255      trusts of every description not inconsistent with law, and to receive reasonable compensation
             3256      therefor. An association exercising trust or other fiduciary powers under this subsection shall
             3257      have all powers, privileges, and immunities granted in Chapter 5. Funds held by an association
             3258      as fiduciary under this subsection may be commingled and consolidated for appropriate
             3259      purposes of investment, provided that records reflecting the separate interest of each
             3260      beneficiary shall be maintained by the fiduciary, unless that responsibility is lawfully assumed
             3261      by another appropriate party. Trust funds available for investment shall be invested at the time
             3262      and in the manner specified by the agreement, instrument, or order creating or defining the
             3263      fiduciary estate, but may be invested in savings accounts of the associations, unless the
             3264      instrument, agreement, or order prohibits such investment;
             3265          (p) subject to Chapter 16a, Automated Teller Machine Act, to engage in financial
             3266      transactions effected by electronic means;
             3267          (q) to maintain and let safes, boxes, or other receptacles or premises for the
             3268      safekeeping of personal property upon such terms and conditions as may be agreed upon;
             3269          (r) to offer money orders, travel checks, and similar instruments for its own account or
             3270      as agent for any organization empowered to sell such instruments through agents within this
             3271      state;
             3272          (s) to act as agent or escrowee for others;
             3273          (t) to declare and pay dividends on capital stock in cash or property out of the
             3274      unreserved and unrestricted earned surplus of the association, or in its own shares, from time to
             3275      time, except when there is a deficiency in the reserves or net worth of the association under
             3276      rules issued by the commissioner under Section 7-7-20 , and except when the association is in
             3277      an impaired condition or when the payment thereof would cause the association to be in an
             3278      impaired condition. A split-up or division of the issued shares of capital stock into a greater
             3279      number of shares without increasing the stated capital of the association is authorized, and
             3280      [shall not] may not be construed to be a dividend within the meaning of this section;
             3281          (u) to acquire deposits from any individual or entity and pay earnings thereon, to offer
             3282      interest bearing or noninterest bearing accounts from which withdrawals may be made by


             3283      negotiable or transferable instruments for the purpose of making transfers to third parties, and
             3284      to lend, and commit to lend, extend credit, and invest its funds as provided for in this chapter;
             3285      and
             3286          (v) to engage in other activities, exercise other powers and to enjoy other rights,
             3287      privileges, benefits, and immunities authorized by rules of the commissioner and, particularly,
             3288      under the authority given to the commissioner in Subsection 7-1-301 (3), which authority shall
             3289      be exercised to prevent competitive disparities between associations chartered in this state and
             3290      federal associations.
             3291          Section 90. Section 7-7-26 is amended to read:
             3292           7-7-26. Redemption of savings accounts.
             3293          At any time funds are on hand for the purpose, the association may redeem by lot or
             3294      otherwise, as the board of directors may determine, all or any part of any of its savings
             3295      accounts on an earnings date by giving 30 days' notice by registered or certified mail addressed
             3296      to each affected account holder at his last address as recorded on the books of the association.
             3297      No association shall redeem any of its savings accounts when the association is in an impaired
             3298      condition or when it has applications for withdrawal which have been on file more than 14
             3299      days and have not been paid. The redemption price of savings accounts redeemed shall be the
             3300      full value of the account redeemed, as determined by the board of directors, but in no event
             3301      shall the redemption price be less than the withdrawal value. If the notice of redemption has
             3302      been duly given and if on or before the redemption date the funds necessary for redemption
             3303      have been set aside so as to be and continue to be available for redemption, earnings upon the
             3304      accounts called for redemption shall cease to accrue from and after the earnings date specified
             3305      as the redemption date, and all rights with respect to these accounts shall forthwith, after the
             3306      redemption date, terminate, excepting only any right of the account holder of record to receive
             3307      the redemption price without interest. All savings account books or certificates evidencing
             3308      former savings accounts which have been validly called for redemption [must] shall be
             3309      tendered for payment within seven years from the date of redemption designated in the
             3310      redemption notice, otherwise they shall be cancelled and the funds set aside for those accounts
             3311      presumed abandoned, and they shall be disposed of in accordance with the provisions of Title
             3312      67, Chapter 4a, Unclaimed Property Act.
             3313          Section 91. Section 7-7-29 is amended to read:


             3314           7-7-29. Investment in service organizations, business development credit
             3315      corporations, and service corporations.
             3316          (1) An association may invest:
             3317          (a) in capital stock, obligations, or other securities of service organizations, and of
             3318      business development credit corporations incorporated in this state, provided that the aggregate
             3319      of those investments [shall not] may not exceed 10% of its assets; or
             3320          (b) in capital stock, obligations, or other securities of any service corporation, provided
             3321      that the aggregate of those investments [shall not] may not exceed 10% of its assets.
             3322          (2) The commissioner may, by regulation, allow investments in excess of those
             3323      permitted by this section, if he finds that such investments promote the viability and stability of
             3324      the associations of this state.
             3325          Section 92. Section 7-7-30 is amended to read:
             3326           7-7-30. Investment in property used in conduct of business -- Investment in
             3327      manner not prohibited by law.
             3328          (1) An association may invest in such real property or interest therein as the directors
             3329      may deem necessary or convenient for the conduct of the business of the association, which for
             3330      the purposes of this chapter may include the stock of a wholly owned subsidiary corporation
             3331      having as its exclusive activity the ownership and management of such property or interests,
             3332      but the amount so invested [shall not] may not exceed 10% of the assets of the association,
             3333      except that the commissioner may authorize a greater amount to be so invested if he finds that
             3334      the investments promote the viability and stability of the associations of this state. An
             3335      association may invest a reasonable amount in property such as furniture, fixtures, and
             3336      equipment for use in carrying on its own business.
             3337          (2) Every association may invest its assets in a manner not expressly prohibited by law
             3338      if the investments are made in the exercise of the judgment and care under the circumstances
             3339      then prevailing which men of prudence, discretion, and intelligence exercise in the
             3340      management of their own affairs not in regard to speculation but in regard to the permanent
             3341      disposition of their funds, considering the probable income as well as the probable safety of
             3342      their capital. The aggregate of investments held under this subsection and not permitted by any
             3343      other section of this chapter may not exceed 5% of the assets of the association.
             3344          Section 93. Section 7-7-32 is amended to read:


             3345           7-7-32. Agreements committing assets to lines of credit -- Stock ownership or
             3346      affiliation with credit card companies.
             3347          An association may, subject to Section 7-7-33 , commit its assets to lines of credit under
             3348      credit agreements and credit card agreements with its credit card holders and with other credit
             3349      card issuers, and pay and agree to pay obligations incurred in connection with those
             3350      agreements, and become a member or stockholder of, or become otherwise affiliated with, any
             3351      credit card corporation, association, or other issuer. The commissioner may, by rule, limit the
             3352      percentage of assets that may be invested in such lines of credit, but the limitation [shall not]
             3353      may not be more restrictive than that of the Office of Thrift Supervision or successor federal
             3354      agency for federally chartered associations.
             3355          Section 94. Section 7-7-33 is amended to read:
             3356           7-7-33. Investments in loans -- Payments to protect real estate loans -- Requiring
             3357      borrower to pay taxes, insurance, and other charges on real estate in advance.
             3358          (1) An association may invest in or otherwise acquire loans and interests in loans,
             3359      secured or unsecured, of any type, amount, and for any purpose, including[, but not limited to]:
             3360          (a) loans evidenced by a participation certificate, mortgage-backed bond or note, or
             3361      mortgage pass-through certificate;
             3362          (b) personal loans evidenced by promissory notes;
             3363          (c) loans containing variable, renegotiable, graduated payment, shared appreciation, or
             3364      other alternative payment features or any combinations of those features;
             3365          (d) loans secured by the pledge of policies of life insurance;
             3366          (e) loans which are callable upon transfer of the security therefor;
             3367          (f) loans to financial institutions, brokers and dealers, secured by loans, obligations or
             3368      investments in which the association could invest directly or unsecured loans to subsidiary
             3369      corporations whether or not those corporations are controlled by the association;
             3370          (g) loans for the payment of expenses of college or applied technology education;
             3371          (h) loans on the security of its savings accounts and loans specifically related to
             3372      negotiable order-of-withdrawal accounts;
             3373          (i) loans secured by deeds of trust, mortgages or real estate contracts on interests in real
             3374      property whether for the acquisition or improvement of homes or of real property or for other
             3375      purposes, subject only to the conditions specified in Subsections (2) and (3); and


             3376          (j) commercial loans to partnerships, corporations, or trusts which are operated for
             3377      profit.
             3378          (2) No association shall make a loan to one person if the sum of (a) the amount of the
             3379      loan and (b) the total balance of all outstanding loans owed to the association and its service
             3380      corporation subsidiaries by that person exceeds an amount equal to 15% of the association's
             3381      equity capital.
             3382          (3) No association shall make any loan authorized by this section unless it first has
             3383      determined that the type, amount, purpose, and repayment provisions of the loan in relation to
             3384      the borrower's resources and credit standing support the reasonable belief that the loan will be
             3385      financially sound and will be repaid according to its terms, and that the loan is not otherwise
             3386      unlawful.
             3387          (4) (a) An association may pay taxes, assessments, ground rents, insurance premiums,
             3388      and other similar charges for the protection of its real estate loans.
             3389          (b) All such payments shall be added to the unpaid balance of the loan and shall be
             3390      equally secured by the first lien on the property as the original amounts advanced.
             3391          (c) An association may require life insurance to be assigned as additional collateral
             3392      upon any real estate loan, and if it does so require, the association shall obtain a first lien upon
             3393      the policy and may advance premiums thereon, and the premium advances shall be added to the
             3394      unpaid balance of the loan and shall be equally secured by the first lien on the property as the
             3395      original amount advanced.
             3396          (5) (a) An association may require, subject to the provisions of the Interest on
             3397      Mortgage Loan Reserve Accounts Act, Sections 7-17-1 through 7-17-10 , that a borrower pay
             3398      monthly in advance, in addition to interest or interest and principal payments, the equivalent of
             3399      1/12 of the estimated annual taxes, assessments, insurance premiums, ground rents, and other
             3400      charges upon the real estate securing a loan, or any of those charges, so as to enable the
             3401      association to pay the charges as they become due from the funds so received.
             3402          (b) The amount of the monthly payments may be increased or decreased to provide
             3403      reasonably for the payment of the estimated annual taxes, assessments, insurance premiums,
             3404      and other charges.
             3405          (c) If the association advances its own funds for the purposes stated, that amount shall
             3406      be secured by the association's mortgage or trust deed, if any, with the same priority as the


             3407      original amount advanced under the mortgage or trust deed.
             3408          Section 95. Section 7-7-43 is amended to read:
             3409           7-7-43. Previously incorporated associations.
             3410          (1) The name, rights, powers, privileges, and immunities of every association
             3411      incorporated in this state before the effective date of this act shall be governed, controlled,
             3412      construed, extended, limited, and determined by the provisions of this chapter to the same
             3413      extent and effect as if the association had been incorporated under this chapter. The articles of
             3414      incorporation, certificate of incorporation, or charter, however entitled, bylaws and
             3415      constitution, or other rules of every such association made or existing before the effective date
             3416      of this act are hereby modified, altered, and amended to conform to the provisions of this
             3417      chapter, with or without the issuance or approval by the commissioner of conformed copies of
             3418      such documents, and are declared void to the extent that they are inconsistent with the
             3419      provisions of this chapter; except, that the obligations of any such pre-existing association,
             3420      whether between the association and its members or stockholders, or any of them, or any other
             3421      person or persons, and any valid contracts between the members or stockholders of any such
             3422      association, or between the association and any other person or persons, existing at the time
             3423      this act takes effect, [shall not] may not in any way be impaired by the provisions of this
             3424      chapter. With these exceptions, every association incorporated before the effective date of this
             3425      act shall possess the rights, powers, privileges, and immunities and shall be subject to the
             3426      duties, liabilities, disabilities, and restrictions conferred and imposed by this chapter
             3427      notwithstanding anything to the contrary in its certificate of authority, certificate of
             3428      incorporation, bylaws, constitution, or rules.
             3429          (2) All obligations to any association incorporated before the effective date of this act
             3430      contracted before the effective date of this act shall be enforceable by it and in its name, and
             3431      demands, claims, and rights of action against the association may be enforced against it as fully
             3432      and completely as they could have been enforced in the absence of this chapter.
             3433          Section 96. Section 7-9-5 is amended to read:
             3434           7-9-5. Powers of credit unions.
             3435          In addition to the powers specified elsewhere in this chapter and subject to any
             3436      limitations specified elsewhere in this chapter, a credit union may:
             3437          (1) make contracts;


             3438          (2) sue and be sued;
             3439          (3) acquire, lease, or hold fixed assets, including real property, furniture, fixtures, and
             3440      equipment as the directors consider necessary or incidental to the operation and business of the
             3441      credit union, but the value of the real property may not exceed 7% of credit union assets, unless
             3442      approved by the commissioner;
             3443          (4) pledge, hypothecate, sell, or otherwise dispose of real or personal property, either in
             3444      whole or in part, necessary or incidental to its operation;
             3445          (5) incur and pay necessary and incidental operating expenses;
             3446          (6) require an entrance or membership fee;
             3447          (7) receive the funds of its members in payment for:
             3448          (a) shares;
             3449          (b) share certificates;
             3450          (c) deposits;
             3451          (d) deposit certificates;
             3452          (e) share drafts;
             3453          (f) NOW accounts; and
             3454          (g) other instruments;
             3455          (8) allow withdrawal of shares and deposits, as requested by a member orally to a third
             3456      party with prior authorization in writing, including[, but not limited to,] drafts drawn on the
             3457      credit union for payment to the member or any third party, in accordance with the procedures
             3458      established by the board of directors, including[, but not limited to,] drafts, third-party
             3459      instruments, and other transaction instruments, as provided in the bylaws;
             3460          (9) charge fees for its services;
             3461          (10) extend credit to its members, at rates established in accordance with the bylaws or
             3462      by the board of directors;
             3463          (11) extend credit secured by real estate;
             3464          (12) (a) subject to Subsection (12)(b), make co-lending arrangements, including loan
             3465      participation arrangements, in accordance with written policies of the board of directors with
             3466      one or more:
             3467          (i) other credit unions;
             3468          (ii) credit union service organizations; or


             3469          (iii) other financial organizations; and
             3470          (b) make co-lending arrangements, including loan participation arrangements, in
             3471      accordance with Subsection (12)(a) subject to the following:
             3472          (i) the credit union or credit union service organization that originates a loan for which
             3473      co-lending arrangements are made shall retain an interest of at least 10% of the loan;
             3474          (ii) on or after May 5, 2003, the originating credit union or credit union service
             3475      organization may sell to a credit union an interest in a co-lending arrangement that involves a
             3476      member-business loan only if the person receiving the member-business loan is a member of
             3477      the credit union to which the interest is sold;
             3478          (iii) on or after May 5, 2003, the originating credit union or credit union service
             3479      organization may sell to a credit union service organization an interest in a co-lending
             3480      arrangement that involves a member-business loan only if the person receiving the
             3481      member-business loan is a member of a credit union that holds an interest in the credit union
             3482      service organization to which the interest is sold; and
             3483          (iv) a nonexempt credit union may not originate, participate in, or obtain any interest in
             3484      a co-lending arrangement, including a loan participation arrangement, in violation of Section
             3485      7-9-58 ;
             3486          (13) sell and pledge eligible obligations in accordance with written policies of the
             3487      board of directors;
             3488          (14) engage in activities and programs of the federal government or this state or any
             3489      agency or political subdivision of the state, when approved by the board of directors and not
             3490      inconsistent with this chapter;
             3491          (15) act as fiscal agent for and receive payments on shares and deposits from the
             3492      federal government, this state, or its agencies or political subdivisions not inconsistent with the
             3493      laws of this state;
             3494          (16) borrow money and issue evidence of indebtedness for a loan or loans for
             3495      temporary purposes in the usual course of its operations;
             3496          (17) discount and sell notes and obligations;
             3497          (18) sell all or any portion of its assets to another credit union or purchase all or any
             3498      portion of the assets of another credit union;
             3499          (19) invest funds as provided in this title and in its bylaws;


             3500          (20) maintain deposits in insured depository institutions as provided in this title and in
             3501      its bylaws;
             3502          (21) (a) hold membership in corporate credit unions organized under this chapter or
             3503      under other state or federal statutes; and
             3504          (b) hold membership or equity interest in associations and organizations of credit
             3505      unions, including credit union service organizations;
             3506          (22) declare and pay dividends on shares, contract for and pay interest on deposits, and
             3507      pay refunds of interest on loans as provided in this title and in its bylaws;
             3508          (23) collect, receive, and disburse funds in connection with the sale of negotiable or
             3509      nonnegotiable instruments and for other purposes that provide benefits or convenience to its
             3510      members, as provided in this title and in its bylaws;
             3511          (24) make donations for the members' welfare or for civic, charitable, scientific, or
             3512      educational purposes as authorized by the board of directors or provided in its bylaws;
             3513          (25) act as trustee of funds permitted by federal law to be deposited in a credit union as
             3514      a deferred compensation or tax deferred device, including[, but not limited to,] individual
             3515      retirement accounts as defined by Section 408, Internal Revenue Code;
             3516          (26) purchase reasonable accident and health insurance, including accidental death
             3517      benefits, for directors and committee members through insurance companies licensed in this
             3518      state as provided in its bylaws;
             3519          (27) provide reasonable protection through insurance or other means to protect board
             3520      members, committee members, and employees from liability arising out of consumer
             3521      legislation [such as, but not limited to,] including truth-in-lending and equal credit laws and as
             3522      provided in its bylaws;
             3523          (28) reimburse directors and committee members for reasonable and necessary
             3524      expenses incurred in the performance of their duties;
             3525          (29) participate in systems which allow the transfer, withdrawal, or deposit of funds of
             3526      credit unions or credit union members by automated or electronic means and hold membership
             3527      in entities established to promote and effectuate these systems, if:
             3528          (a) the participation is not inconsistent with the law and rules of the department; and
             3529          (b) any credit union participating in any system notifies the department as provided by
             3530      law;


             3531          (30) issue credit cards and debit cards to allow members to obtain access to their
             3532      shares, deposits, and extensions of credit;
             3533          (31) provide any act necessary to obtain and maintain membership in the credit union;
             3534          (32) exercise incidental powers necessary to carry out the purpose for which a credit
             3535      union is organized;
             3536          (33) undertake other activities relating to its purpose as its bylaws may provide;
             3537          (34) engage in other activities, exercise other powers, and enjoy other rights,
             3538      privileges, benefits, and immunities authorized by rules of the commissioner;
             3539          (35) act as trustee, custodian, or administrator for Keogh plans, individual retirement
             3540      accounts, credit union employee pension plans, and other employee benefit programs; and
             3541          (36) advertise to the general public the products and services offered by the credit
             3542      union if the advertisement prominently discloses that to use the products or services of the
             3543      credit union a person is required to:
             3544          (a) be eligible for membership in the credit union; and
             3545          (b) become a member of the credit union.
             3546          Section 97. Section 7-9-19 is amended to read:
             3547           7-9-19. Payments to expelled members -- Liability of member not relieved by
             3548      expulsion.
             3549          (1) Except in the case of liquidation or dissolution, the amount paid in on shares or
             3550      deposited by members who have been expelled shall be paid to them with all accrued interest,
             3551      in the order of expulsion.
             3552          (2) Payment shall be made only as funds become available.
             3553          (3) All amounts due the credit union by the expelled member shall be deducted by the
             3554      credit union before any amounts are paid to the expelled member.
             3555          (4) Expulsion [shall not] does not relieve a member from any liability to the credit
             3556      union.
             3557          Section 98. Section 7-9-32 is amended to read:
             3558           7-9-32. Joint accounts -- Accounts providing for payment to designated person on
             3559      death of owner or owners.
             3560          (1) If a deposit or share account is opened in any credit union in the name of two or
             3561      more persons, whether minor or adult, in such form that the money in the account is payable to


             3562      the survivor or survivors, the account and all additions to it are considered held by these
             3563      persons as joint tenants or owners.
             3564          (2) The money in a joint account may be paid to or on the receipt or withdrawal order
             3565      of any one of the joint owners during their lifetimes or to or on receipt of withdrawal order of
             3566      any one of the survivors of them after the death of any one or more of them upon presentation
             3567      of the pass or account book or other evidence of ownership as required by the bylaws of the
             3568      credit union. The opening of the account in such form shall, in the absence of fraud, undue
             3569      influence, or legal proof of other intent, be conclusive evidence in any action or proceedings
             3570      concerning said account of the intention of the parties to the account to vest title to such
             3571      account and the additions thereto in such survivor and survivors.
             3572          (3) By written instructions given to the credit union by all parties to the account, the
             3573      signature of more than one of such persons during their lifetime or of more than one of the
             3574      survivors after the death of any one of them may be required on a receipt or withdrawal order,
             3575      in which case the credit union shall pay the moneys in the account only in accordance with
             3576      such instructions, but no such instructions shall limit the right of the survivor or survivors to
             3577      receive the money in the account.
             3578          (4) Payment of all or part of the money in a joint account as provided in Subsections
             3579      (2) and (3) shall discharge the credit union from liability with respect to the money paid prior
             3580      to receipt by the credit union of a written notice from any one of the joint owners directing the
             3581      credit union not to permit withdrawals in accordance with the terms of the account or the
             3582      instructions. After receipt of such notice a credit union may refuse, without incurring liability,
             3583      to honor any receipt or withdrawal on the account pending determination of the rights of the
             3584      parties. No credit union paying any survivor shall be liable for any estate, inheritance, or
             3585      succession taxes.
             3586          (5) The pledge to a credit union of all or part of a share account in joint tenancy or
             3587      ownership signed by that person or those persons who are authorized in writing to make
             3588      withdrawals from the account shall, unless the terms of the share account provide specifically
             3589      to the contrary, be a valid pledge and transfer to the credit union of that part of the account
             3590      pledged, and [shall not] does not operate to sever or terminate the joint and surviving
             3591      ownership quality of all or any part of the account.
             3592          (6) Any credit union may issue share or deposit accounts in the name of one or more


             3593      persons with the provision that upon the death of the owner or owners thereof the proceeds
             3594      shall be the property of the person or persons designated by the owner or owners and shown by
             3595      the records of such credit union, but such proceeds shall be subject to the debts of the decedent
             3596      and the payment of Utah inheritance tax, if any. However, upon the receipt of acquittance of
             3597      the person so designated or six months having elapsed from the date of death and no claim on
             3598      the account having been made for taxes, the credit union may make payment to the persons
             3599      designated by the deceased owner or owners and having done so is discharged from further
             3600      obligation and relieved from all further liability for payment made under this subsection.
             3601          Section 99. Section 7-14-5 is amended to read:
             3602           7-14-5. Reciprocal exchange of information authorized.
             3603          One or more financial institutions may jointly agree with one or more other financial
             3604      institutions for the reciprocal exchange of any information authorized to be reported by the
             3605      provisions of this chapter. Such reciprocal exchange of information or the acts or refusals to act
             3606      of one or more recipients because of such information [shall not] does not constitute a boycott
             3607      or blacklist, [or] and is not otherwise [be] a basis for liability to any person on the part of any
             3608      participant in the reciprocal exchange of information authorized by this chapter.
             3609          Section 100. Section 7-17-4 is amended to read:
             3610           7-17-4. Options in lieu of reserve account -- Notice by lender -- Selection by
             3611      borrower -- Noninterest-bearing reserve account -- Exemption.
             3612          (1) A lender not requiring the establishment and maintenance of a reserve account shall
             3613      offer the borrower the following options:
             3614          (a) the borrower may elect to maintain a noninterest-bearing reserve account to be
             3615      serviced by the lender at no charge to the borrower; or
             3616          (b) the borrower may manage the payment of insurance premiums, taxes and other
             3617      charges for the borrower's own account.
             3618          (2) (a) The lender shall give written notice of the options to the borrower:
             3619          (i) with respect to real estate loans existing on July 1, 1979, by notice mailed not more
             3620      than 30 days after July 1, 1979; or
             3621          (ii) with respect to real estate loans made on or after July 1, 1979, by notice given at or
             3622      prior to the closing of the loan.
             3623          (b) The notice required by this Subsection (2) shall:


             3624          (i) clearly describe the options; and
             3625          (ii) state that:
             3626          (A) a reserve account is not required by the lender;
             3627          (B) the borrower is legally responsible for the payment of taxes, insurance premiums,
             3628      and other charges; and
             3629          (C) the notice is being given pursuant to this chapter.
             3630          (c) For real estate loans in existence on July 1, 1979, the borrower [must] shall select
             3631      one of the options prior to 60 days after July 1, 1979.
             3632          (d) If no option is selected prior to 60 days after July 1, 1979, the borrower will be
             3633      considered to have selected the option described in Subsection (1)(a), provided, however, that
             3634      the borrower at a later time may select the option described in Subsection (1)(b).
             3635          (e) For loans made on or after July 1, 1979, the borrower shall select one of the options
             3636      at the closing.
             3637          (f) If the borrower selects the option described in Subsection (1)(a), the lender may not
             3638      be required to account for earnings, if any, on the account.
             3639          (3) (a) Subject to Subsection (3)(b), if the borrower who selects the option described in
             3640      Subsection (1)(b), or the borrower's successors or assigns, fails to pay the taxes, insurance
             3641      premiums, or other charges pertaining to the property securing the loan prior to the delinquency
             3642      date for such payments, the lender may require a reserve account without interest or other
             3643      compensation for the use of the funds.
             3644          (b) Notwithstanding Subsection (3)(a), the lender may not require a reserve account
             3645      without interest or other compensation if:
             3646          (i) the borrower pays any delinquency within 30 days; and
             3647          (ii) the borrower has not previously been delinquent in payment of taxes, insurance
             3648      premiums, or other charges.
             3649          (4) This section does not apply to a loan made, renewed, or modified on or after May 6,
             3650      2002.
             3651          Section 101. Section 7-17-6 is amended to read:
             3652           7-17-6. Liability of lender for failure to pay taxes, insurance premiums, or other
             3653      charges.
             3654          A lender administering a reserve account shall make timely payments of taxes,


             3655      insurance premiums and other charges for which the account is established, if funds paid into
             3656      the account by the borrower, his successors or assigns, are sufficient for the payments.
             3657      Negligent failure to make the payments required for taxes, insurance premiums and other
             3658      charges as they become due, from available funds in the reserve account, shall subject the
             3659      lender to liability for all damages directly resulting from the failure; provided that this sentence
             3660      [shall not] does not deprive the lender of the right to present any defense it may have in any
             3661      action brought to enforce the liability. Failure of the borrower or his successors or assigns to
             3662      deliver promptly to the lender all notices of tax assessments and insurance premiums or other
             3663      charges, received by the borrower, his successors or assigns, shall relieve the lender from
             3664      liability under this section.
             3665          Section 102. Section 7-17-8 is amended to read:
             3666           7-17-8. Damages for lender's violation of act -- Limitations on recovery.
             3667          (1) Except as otherwise provided in this act, a lender who violates this act is liable to
             3668      the borrower, his successors or assigns, for the actual damages suffered by the borrower, his
             3669      assigns or successors, or $100, whichever is greater. If an action is commenced, the prevailing
             3670      party may be awarded reasonable attorney's fees as determined by the court.
             3671          (2) A lender has no liability under this section if the court finds that written demand for
             3672      payment of the claim of the borrower, his successors or assigns, was made on the lender not
             3673      less than 30 days before commencement of the action and that the lender tendered to the
             3674      borrower, his successors or assigns, prior to the commencement of the action, an amount not
             3675      less than the damages awarded.
             3676          (3) A lender may not be held liable under this section for a violation of this act if the
             3677      lender shows that the violation was not intentional and resulted from a bona fide error
             3678      notwithstanding the maintenance of procedures to avoid such errors.
             3679          (4) A reserve account established or maintained in violation of this act is voidable, at
             3680      the option of the borrower, his successors or assigns, at any time, but [shall not] does not
             3681      otherwise affect the validity of the loan, the security interest in the real property or any other
             3682      obligation of the borrower.
             3683          (5) No action under this section may be brought more than one year after the date of
             3684      the violation.
             3685          Section 103. Section 7-17-9 is amended to read:


             3686           7-17-9. Actions on accounts established prior to 1979 -- Limitations on recovery.
             3687          (1) With respect to any reserve account established prior to July 1, 1979 and for which
             3688      no legal action is pending as of January 1, 1979, no recovery shall be had in any action brought
             3689      to require payment of interest on, or other compensation for, the use prior to July 1, 1979, of
             3690      the funds in such account unless:
             3691          (a) An agreement in writing expressly so providing was executed by the borrower and
             3692      the lender; or
             3693          (b) The borrower, or his successors or assigns, establishes by clear and convincing
             3694      evidence an agreement between the parties that the lender would pay interest on or to otherwise
             3695      compensate the borrower for the use of the funds in such account. Use in the loan documents of
             3696      such words as "trust" or "pledge" alone [shall not] does not establish the intent of the parties;
             3697      and
             3698          (c) There is no federal law or regulation prohibiting the payment of interest on or
             3699      otherwise compensating the borrower for the use of the funds in such an account.
             3700          (2) No action seeking payment of interest on or other compensation for the use of the
             3701      funds in any reserve account for any period prior to July 1, 1979, shall be brought after June 30,
             3702      1981. Any recovery in any such action shall be limited to the four-year period immediately
             3703      preceding the commencement of the action. No recovery shall be had in respect of any reserve
             3704      account established prior to July 1, 1979 greater than if the provisions of Section 7-17-3 of this
             3705      act were applicable to such accounts.
             3706          (3) With respect to any reserve account established prior to July 1, 1979, an agreement
             3707      in writing between the lender and the borrower, or his successors or assigns, that (a) the
             3708      provisions of Section 7-17-3 of this act shall apply to all payments made subsequent to July 1,
             3709      1979, or (b) the borrower may exercise, for the period subsequent to July 1, 1979, either of the
             3710      options provided in Section 7-17-4 of this act, shall bar any recovery by the borrower, his
             3711      successors or assigns, for interest on or other compensation for the use of the funds in such
             3712      account for any period prior to July 1, 1979.
             3713          Section 104. Section 7-18a-301 is amended to read:
             3714           7-18a-301. Powers of an agency, branch, or representative office of a foreign
             3715      depository institution.
             3716          (1) Subject to the limitations set forth in Subsections (2) and (3), and notwithstanding


             3717      any other law of this state, a foreign depository institution authorized by this state to transact
             3718      business through an agency or branch shall transact business with the same rights, privileges,
             3719      and powers as a Utah depository institution and shall be subject to all the same duties,
             3720      restrictions, penalties, liabilities, conditions, and limitations that would apply under the laws of
             3721      this state to a Utah depository institution.
             3722          (2) The general rights, powers, and privileges of a foreign depository institution
             3723      authorized by this state to transact business through an agency or branch set forth in Subsection
             3724      (1) are limited to the following:
             3725          (a) An agency may not accept any deposits from citizens or residents of the United
             3726      States, other than credit balances that are incidental to or arise out of its exercise of other
             3727      lawful powers, but it may accept deposits from persons who are neither citizens nor residents
             3728      of the United States.
             3729          (b) An agency may pay checks or loan money.
             3730          (c) A branch operating in this state may not accept from citizens or residents of the
             3731      United States deposits, other than credit balances that are incidental to or arise out of its
             3732      exercise of other lawful powers, of less than $100,000.
             3733          (d) An agency or branch [shall not be] is not required to maintain federal deposit
             3734      insurance.
             3735          (e) After considering the applicable limitations on the retail deposit-taking powers and
             3736      privileges of an agency or branch of a foreign depository institution, the commissioner may, by
             3737      rule or order, modify the applicability to an agency or branch, of any law of this state that is
             3738      generally applicable to insured depository institutions doing business in this state.
             3739          (f) The commissioner may adopt such additional standards, conditions, or
             3740      requirements, or modify the applicability of any existing standards, conditions, or
             3741      requirements, by rule or order, as the commissioner may consider necessary to ensure the safety
             3742      and soundness and the protection of creditors of the operations of an agency or branch of a
             3743      foreign depository institution in this state.
             3744          (3) A foreign depository institution authorized by this state to transact business through
             3745      a representative office may only:
             3746          (a) engage in loan production office activities authorized by Section 7-1-715 ;
             3747          (b) solicit new business;


             3748          (c) conduct research; or
             3749          (d) perform administrative functions expressly permitted by rule or order.
             3750          Section 105. Section 8-3-1 is amended to read:
             3751           8-3-1. Plats of cemeteries shall be recorded.
             3752          The executive officers of organizations and all individual owners in control of
             3753      cemeteries, offering burial lots for sale in any county, shall file and cause to be recorded in the
             3754      office of the county recorder of the county within which such cemeteries are situated an
             3755      accurate plat thereof, which shall clearly show the sections of burial lots which have been
             3756      disposed of and the names of the persons owning or holding the same, and the sections of
             3757      burial lots held for disposal; and thereafter such executive officers or owners shall file
             3758      additional plats of any additions to such cemeteries before offering for sale any burial lots
             3759      therein. County recorders [shall not] may not collect any fees for filing and recording such
             3760      original plats.
             3761          Section 106. Section 9-3-407 is amended to read:
             3762           9-3-407. Authority -- Powers.
             3763          (1) (a) The authority shall create, operate, and maintain a center that shall promote the
             3764      purposes described in Section 9-3-402 .
             3765          (b) The center shall:
             3766          (i) have an extensive outreach program that serves all regions of the state; and
             3767          (ii) collaborate and coordinate with education, arts, technology, and engineering
             3768      entities, including schools and industries.
             3769          (2) The authority has perpetual succession as a body politic and corporate and may:
             3770          (a) adopt, amend, and repeal rules, policies, and procedures for the regulation of its
             3771      affairs and the conduct of its business;
             3772          (b) sue and be sued in its own name;
             3773          (c) maintain an office at any place or places within this state it may designate;
             3774          (d) adopt, amend, and repeal bylaws and rules, not inconsistent with this part, to carry
             3775      into effect the powers and purposes of the authority and the conduct of its business;
             3776          (e) purchase, lease, sell, and otherwise dispose of property and rights-of-way;
             3777          (f) employ experts, advisory groups, and other professionals it considers necessary;
             3778          (g) employ and retain independent legal counsel;


             3779          (h) make and execute contracts and all other instruments necessary or convenient for
             3780      the performance of its duties and the exercise of its duties under this part to create, operate, and
             3781      maintain a Science Center in Utah;
             3782          (i) procure insurance for liability and against any loss in connection with its property
             3783      and other assets in amounts and from insurers it considers desirable;
             3784          (j) borrow money, receive appropriation from the Legislature, and receive other public
             3785      moneys and accept aid or contributions from any source of money, property, labor, or other
             3786      things of value to be held, used, and applied to carry out the purposes of this part subject to the
             3787      conditions upon which the grants and contributions are made, including[, but not limited to,]
             3788      gifts or grants from any department, agency, or instrumentality of the United States or of this
             3789      state for any purpose consistent with this part;
             3790          (k) enter into agreements with any department, agency, or instrumentality or political
             3791      subdivision of the United States or this state for the purpose of providing for the creation,
             3792      operation, and maintenance of a Science Center in Utah; and
             3793          (l) to do any act necessary or convenient to the exercise of the powers granted by this
             3794      part.
             3795          (3) All monies received by the authority under Subsection (2)(j) and from any other
             3796      source shall be for the exclusive use of the authority to create, operate, maintain, improve, and
             3797      provide for a Science Center in Utah. The monies received by the authority may not be used for
             3798      any other purpose or by any other entity.
             3799          Section 107. Section 9-4-301 is amended to read:
             3800           9-4-301. Legislative intent -- Purpose and policy.
             3801          (1) It is the intent of the Legislature to make available funds received by the state from
             3802      federal mineral lease revenues under Section 59-21-2 , bonus payments on federal oil shale
             3803      lease tracts U-A and U-B, and all other bonus payments on federal mineral leases to be used for
             3804      the alleviation of social, economic, and public finance impacts resulting from the development
             3805      of natural resources in this state, subject to the limitations provided for in Section 35 of the
             3806      Mineral Leasing Act of 1920 (41 Stat. 450, 30 U.S.C. Sec. 191).
             3807          (2) The purpose of this part is to maximize the long term benefit of funds derived from
             3808      these lease revenues and bonus payments by fostering funding mechanisms which will,
             3809      consistent with sound financial practices, result in the greatest use of financial resources for the


             3810      greatest number of citizens of this state, with priority given to those communities designated as
             3811      impacted by the development of natural resources covered by the Mineral Leasing Act.
             3812          (3) The policy of this state is to promote cooperation and coordination between the
             3813      state and its agencies and political subdivisions with individuals, firms, and business
             3814      organizations engaged in the development of the natural resources of this state. The purpose of
             3815      such efforts [should] include private sector participation, financial and otherwise, in the
             3816      alleviation of impacts associated with resources development activities.
             3817          Section 108. Section 9-4-602 is amended to read:
             3818           9-4-602. Definitions.
             3819          As used in this part:
             3820          (1) "Area of operation" means:
             3821          (a) in the case of an authority of a city, the city, except that the area of operation of an
             3822      authority of any city does not include any area that lies within the territorial boundaries of some
             3823      other city; or
             3824          (b) in the case of an authority of a county, all of the county for which it is created
             3825      except, that a county authority may not undertake any project within the boundaries of any city
             3826      unless a resolution has been adopted by the governing body of the city (and by any authority
             3827      which shall have been theretofore established and authorized to exercise its powers in the city)
             3828      declaring that there is need for the county authority to exercise its powers within that city.
             3829          (2) "Blighted area" means any area where dwellings predominate that, by reason of
             3830      dilapidation, overcrowding, faulty arrangement or design, lack of ventilation, light, or sanitary
             3831      facilities or any combination of these factors, are detrimental to safety, health, and morals.
             3832          (3) "Bonds" means any bonds, notes, interim certificates, debentures, or other
             3833      obligations issued by an authority pursuant to this part.
             3834          (4) "City" means any city or town in the state.
             3835          (5) "Clerk" means the city clerk or the county clerk, or the officer charged with the
             3836      duties customarily imposed on the clerk.
             3837          (6) "County" means any county in the state.
             3838          (7) "Elderly" means a person who meets the age, disability, or other conditions
             3839      established by regulation of the authority.
             3840          (8) "Federal government" includes the United States of America, the Department of


             3841      Housing and Urban Development, or any other agency or instrumentality, corporate or
             3842      otherwise, of the United States.
             3843          (9) "Governing body" means, in the case of a city, the council or other body of the city
             3844      in which is vested legislative authority customarily imposed on the city council, and in the case
             3845      of a county, the board of county commissioners.
             3846          (10) "Housing authority" or "authority" means any public body corporate and politic
             3847      created by this part.
             3848          (11) (a) "Housing project" or "project" means any work or undertaking, on contiguous
             3849      or noncontiguous sites to:
             3850          (i) demolish, clear, or remove buildings from any blighted area;
             3851          (ii) provide or assist in providing decent, safe, and sanitary urban or rural dwellings,
             3852      apartments, or other living accommodations for persons of medium and low income by any
             3853      suitable methods, including [but not limited to] rental, sale of individual units in single or
             3854      multifamily structures under conventional condominium, cooperative sales contract,
             3855      lease-purchase agreement, loans, or subsidizing of rentals or charges; or
             3856          (iii) accomplish a combination of the foregoing.
             3857          (b) "Housing project" includes:
             3858          (i) buildings, land, equipment, facilities, and other real or personal property for
             3859      necessary, convenient, or desirable appurtenances;
             3860          (ii) streets, sewers, water service, utilities, parks, site preparation and landscaping;
             3861          (iii) facilities for administrative, community, health, recreational, welfare, or other
             3862      purposes;
             3863          (iv) the planning of the buildings and other improvements;
             3864          (v) the acquisition of property or any interest therein;
             3865          (vi) the demolition of existing structures;
             3866          (vii) the construction, reconstruction, rehabilitation, alteration, or repair of the
             3867      improvements and all other work in connection with them; and
             3868          (viii) all other real and personal property and all tangible or intangible assets held or
             3869      used in connection with the housing project.
             3870          (12) "Major disaster" means any flood, drought, fire, hurricane, earthquake, storm, or
             3871      other catastrophe which in the determination of the governing body is of sufficient severity and


             3872      magnitude to warrant the use of available resources of the federal, state, and local governments
             3873      to alleviate the damage, hardship, or suffering caused.
             3874          (13) "Mayor" means the mayor of the city or the officer charged with the duties
             3875      customarily imposed on the mayor or executive head of a city.
             3876          (14) "Obligee of an authority" or "obligee" includes any bondholder, agent or trustee
             3877      for any bondholder, any lessor demising to the authority used in connection with a project, any
             3878      assignee or assignees of the lessor's interest in whole or in part, and the federal government
             3879      when it is a party to any contract with the authority.
             3880          (15) "Persons of medium and low income" mean persons or families who, as
             3881      determined by the authority undertaking a project, cannot afford to pay the amounts at which
             3882      private enterprise, unaided by appropriate assistance, is providing a substantial supply of
             3883      decent, safe and sanitary housing.
             3884          (16) "Person with a disability" means a person with any disability as defined by and
             3885      covered under the Americans with Disabilities Act of 1990, 42 U.S.C. 12102.
             3886          (17) "Public body" means any city, county or municipal corporation, commission,
             3887      district, authority, agency, subdivision, or other body of any of the foregoing.
             3888          (18) "Real property" includes all lands, improvements, and fixtures on them, property
             3889      of any nature appurtenant to them or used in connection with them, and every estate, interest,
             3890      and right, legal or equitable, including terms for years.
             3891          Section 109. Section 9-4-703 is amended to read:
             3892           9-4-703. Housing loan fund board -- Duties -- Expenses.
             3893          (1) There is created the Olene Walker Housing Loan Fund Board.
             3894          (2) The board shall be composed of 11 voting members.
             3895          (a) The governor shall appoint the following members to four-year terms:
             3896          (i) two members from local governments;
             3897          (ii) two members from the mortgage lending community;
             3898          (iii) one member from real estate sales interests;
             3899          (iv) one member from home builders interests;
             3900          (v) one member from rental housing interests;
             3901          (vi) one member from housing advocacy interests;
             3902          (vii) one member of the manufactured housing interest; and


             3903          (viii) two members of the general public.
             3904          (b) The director or his designee shall serve as the secretary of the committee.
             3905          (c) The members of the board shall annually elect a chair from among the voting
             3906      membership of the board.
             3907          (3) (a) Notwithstanding the requirements of Subsection (2), the governor shall, at the
             3908      time of appointment or reappointment, adjust the length of terms to ensure that the terms of
             3909      board members are staggered so that approximately half of the board is appointed every two
             3910      years.
             3911          (b) When a vacancy occurs in the membership for any reason, the replacement shall be
             3912      appointed for the unexpired term.
             3913          (4) (a) The board shall:
             3914          (i) meet regularly, at least quarterly, on dates fixed by the board;
             3915          (ii) keep minutes of its meetings; and
             3916          (iii) comply with the procedures and requirements of Title 52, Chapter 4, Open and
             3917      Public Meetings Act.
             3918          (b) Seven members of the board constitute a quorum, and the governor, the chair, or a
             3919      majority of the board may call a meeting of the board.
             3920          (5) The board shall:
             3921          (a) review the housing needs in the state;
             3922          (b) determine the relevant operational aspects of any grant, loan, or revenue collection
             3923      program established under the authority of this chapter;
             3924          (c) determine the means to implement the policies and goals of this chapter;
             3925          (d) [determine] select specific projects [that the board considers should] to receive
             3926      grant or loan moneys; and
             3927          (e) determine how fund moneys shall be allocated and distributed.
             3928          (6) (a) (i) Members who are not government employees shall receive no compensation
             3929      or benefits for their services, but may receive per diem and expenses incurred in the
             3930      performance of the member's official duties at the rates established by the Division of Finance
             3931      under Sections 63A-3-106 and 63A-3-107 .
             3932          (ii) Members may decline to receive per diem and expenses for their service.
             3933          (b) (i) State government employee members who do not receive salary, per diem, or


             3934      expenses from their agency for their service may receive per diem and expenses incurred in the
             3935      performance of their official duties from the board at the rates established by the Division of
             3936      Finance under Sections 63A-3-106 and 63A-3-107 .
             3937          (ii) State government employee members may decline to receive per diem and
             3938      expenses for their service.
             3939          (c) (i) Local government members who do not receive salary, per diem, or expenses
             3940      from the entity that they represent for their service may receive per diem and expenses incurred
             3941      in the performance of their official duties at the rates established by the Division of Finance
             3942      under Sections 63A-3-106 and 63A-3-107 .
             3943          (ii) Local government members may decline to receive per diem and expenses for their
             3944      service.
             3945          Section 110. Section 9-4-914 is amended to read:
             3946           9-4-914. Capital reserve funds -- Capital reserve fund requirement --
             3947      Establishment of other funds.
             3948          (1) (a) (i) The corporation may create and establish one or more reserve funds, herein
             3949      referred to as "capital reserve funds", from:
             3950          (A) any proceeds of sale of notes or bonds, to the extent provided in the resolution or
             3951      resolutions of the corporation authorizing the issuance thereof;
             3952          (B) any monies appropriated and made available by the state for the purpose of the
             3953      funds;
             3954          (C) any monies directed by the corporation to be transferred to the funds; and
             3955          (D) any other monies which may be made available to the corporation for the purpose
             3956      of the funds from any other source or sources.
             3957          (ii) All monies held in any capital reserve fund shall be used, as required, solely for the
             3958      payment of the principal of bonds or of the sinking fund payments with respect to the bonds,
             3959      the purchase or redemption of bonds, the payment of interest on bonds, or the payment of any
             3960      redemption premium required to be paid when the bonds are redeemed prior to maturity.
             3961          (b) (i) Monies in any capital reserve fund may not be withdrawn from the fund at any
             3962      time in an amount as would reduce the level of monies in the fund to less than the capital
             3963      reserve fund requirement, except for the purpose of paying principal and redemption price of
             3964      and interest on bonds and the sinking fund payments, as the payments become due and for the


             3965      payment of which other monies of the corporation are not available.
             3966          (ii) Any income or interest earned by the investment of monies held in any fund may be
             3967      transferred by the corporation to other funds or accounts of the corporation to the extent that
             3968      the transfer does not reduce the amount of the fund to below the capital reserve fund
             3969      requirement.
             3970          (c) The corporation may provide by resolution or resolutions that it may not issue
             3971      bonds under a resolution or resolutions at any time if upon issuance the amount in the capital
             3972      reserve fund which will secure the bonds shall be less than the capital reserve fund
             3973      requirement, unless the corporation at the time of issuance of the bonds shall deposit in the
             3974      fund from the proceeds of the bonds to be so issued, or other sources, an amount which,
             3975      together with the amount then in the fund, [shall not] may not be less than the capital reserve
             3976      fund requirement.
             3977          (d) In computing the amount of the capital reserve funds for the purpose of this part,
             3978      securities in which all or a portion of the funds shall be invested shall be valued at par, cost, or
             3979      by other method of valuation as the corporation may provide by resolution.
             3980          (e) (i) "Capital reserve fund requirement" means, as of any particular date of
             3981      computation, and with respect to any particular issue of bonds, an amount as the corporation
             3982      may provide, or may have previously provided, by resolution, which amount may be in the
             3983      form of a sum certain or a formula.
             3984          (ii) In establishing reserves and setting capital reserve fund requirements, the
             3985      corporation shall consider the following:
             3986          (A) the qualifications for obtaining an investment grade rating from one or more
             3987      nationally recognized bond rating agencies;
             3988          (B) the economic feasibility and marketability of the bonds being issued, taking into
             3989      account all security for the bonds, including the capital reserve fund; and
             3990          (C) applicable requirements pertaining to reserve funds under federal and state income
             3991      tax laws and regulations.
             3992          (f) (i) To assure the continued operation and solvency of the corporation for carrying
             3993      out of its corporate purposes, provision is made in Subsection (1)(b) for the accumulation in
             3994      the capital reserve funds of an amount equal to the maximum capital reserve fund requirement.
             3995          (ii) The president of the corporation shall annually, on or before December first, certify


             3996      to the governor and to the director of finance the amount, if any, required to restore the capital
             3997      reserve funds to the capital reserve fund requirement.
             3998          (iii) The governor may request from the Legislature an appropriation of the certified
             3999      amount to restore the capital reserve funds to the capital reserve fund requirement.
             4000          (g) Amounts appropriated, if any, shall be repaid to the General Fund of the state, from
             4001      any monies in excess of the amounts which the corporation determines will keep it
             4002      self-supporting.
             4003          (2) The corporation may create and establish any other funds as may be necessary or
             4004      desirable for its corporate purposes.
             4005          Section 111. Section 9-4-924 is amended to read:
             4006           9-4-924. Allocation of qualified mortgage bonds to counties, cities, and towns.
             4007          (1) (a) The corporation is authorized to allocate all or part of the amount to one or more
             4008      counties, cities, and towns within the state or to any authority or agency of any such entities
             4009      that is authorized to issue qualified mortgage bonds.
             4010          (b) An allocation may not be made under this section unless the entity applies to the
             4011      corporation for an allocation and the corporation finds that the proposed allocation would be in
             4012      the best interest of the state.
             4013          (c) The corporation shall take the following factors into consideration before making
             4014      its finding:
             4015          (i) the number of "low and moderate income persons," within the meaning of the Utah
             4016      Housing Corporation Act, within a given area;
             4017          (ii) the likelihood that the proposed issuing entity would use the allocation to issue
             4018      qualified mortgage bonds in a timely manner;
             4019          (iii) the cost to the proposed issuing entity to issue the bonds relative to the cost to the
             4020      corporation to issue the bonds;
             4021          (iv) any special costs or benefits which would result from the issuance of such bonds
             4022      by the proposed issuing entity;
             4023          (v) the capability of the proposed issuing entity to administer an issuance of qualified
             4024      mortgage bonds;
             4025          (vi) the needs of the proposed issuing entity relative to the needs of other counties,
             4026      cities, and towns;


             4027          (vii) the effects of the proposed allocation on counties, cities, and towns which are not
             4028      served by the proposed issuing entity; and
             4029          (viii) any other factors the corporation considers relevant to a determination of what is
             4030      in the best interest of Utah with regard to single family housing.
             4031          (2) (a) The corporation shall specify the time within which an issuing entity [must]
             4032      shall use the allocation.
             4033          (b) Any part of the allocation which is not used within the time prescribed
             4034      automatically terminates.
             4035          (c) The corporation may extend the time initially prescribed for use of the allocation.
             4036          Section 112. Section 9-6-203 is amended to read:
             4037           9-6-203. Division powers relating to property.
             4038          (1) The division may:
             4039          (a) take by purchase, grant, gift, devise, or bequest, any property, real or personal, for
             4040      any purpose appropriate to its objects; and
             4041          (b) convert property received by gift, grant, devise, or bequest and not suitable for its
             4042      uses, into other property so available or into money.
             4043          (2) The property received or converted under Subsection (1) shall be held, invested,
             4044      and managed and its proceeds used by the division for the purposes and under the conditions
             4045      prescribed in the grant or donation.
             4046          (3) If by the terms of any grant, gift, devise, or bequest, conditions are imposed that are
             4047      impracticable under the law, the grant or donation [shall not] does not fail but the conditions
             4048      shall be rejected and the intent of the grantor or donor carried out as nearly as may be.
             4049          (4) A grant, gift, devise, or bequest for the benefit of the division may not be defeated
             4050      or prejudiced by any misnomer, misdescription, or informality if the intention of the grantor or
             4051      donor can be shown or ascertained with reasonable certainty.
             4052          Section 113. Section 9-6-405 is amended to read:
             4053           9-6-405. Procedures, guidelines, and rules.
             4054          (1) The division shall follow these guidelines in administering the program:
             4055          (a) Works of art shall be acquired under the program for use only with respect to those
             4056      buildings or facilities that the division determines have significant public use or access,
             4057      especially where the design and technical construction of the building or facility lend


             4058      themselves to works of art. All funds set aside and administered by the program from
             4059      appropriations for any state building or facility of which any part is obtained from the issuance
             4060      of bonds shall be used only to acquire works of art that will be placed in or at, and remain a
             4061      part of, that building or facility, to the extent necessary to preserve the federal income tax
             4062      exemption otherwise allowed for interest paid on the bonds.
             4063          (b) The goal of the division in administering the program is to fairly distribute works of
             4064      art throughout the various social, economic, and geographic communities of the state.
             4065          (c) The division shall give first preference to Utah artists, and to artists from other
             4066      states which have similar percent-for-art programs and demonstrate a reciprocal preference for
             4067      Utah artists.
             4068          (d) The division shall involve the director of the Division of Facilities Construction
             4069      and Management, or the director's designee, and the project architect in the process of
             4070      screening or selecting works of art or artists to create works of art for each project and shall
             4071      involve in that process representatives from the project's principal user or contracting agency,
             4072      the community in which the project is located, and the art profession. The project's principal
             4073      user or contracting agency shall have representation at least equal to any other entity on the
             4074      selection committee, as designated by the project's president or director. Any selection and
             4075      placement of art shall be by a majority decision of the user agency representatives on the
             4076      committee and a majority decision of the entire committee. The selection and placement
             4077      [must] shall be approved by the president or director of the principal user.
             4078          (e) Any relocation of art placed under this program shall be done with the participation
             4079      from the division and the Division of Facilities Construction and Management and with
             4080      approval from the president or director of the principal user.
             4081          (f) The costs of administering the program and conserving and maintaining all works
             4082      of art placed under the program are limited to 15% of the funds deposited in the Utah
             4083      Percent-for-Art Account.
             4084          (2) The division shall adopt procedures, guidelines, and rules as necessary to
             4085      implement this chapter and administer the program.
             4086          Section 114. Section 9-6-504 is amended to read:
             4087           9-6-504. Duties of board.
             4088          The board shall:


             4089          (1) allocate moneys from the state fund to the endowment fund created by a qualifying
             4090      organization under Section 9-6-503 ;
             4091          (2) determine the eligibility of each qualifying organization to receive moneys from the
             4092      state fund into the endowment fund of the qualifying organization and be the final arbiter of
             4093      eligibility;
             4094          (3) determine the matching amount each qualifying organization [must] shall raise in
             4095      order to qualify to receive moneys from the state fund;
             4096          (4) establish a date by which each qualifying organization [must] shall provide its
             4097      matching funds;
             4098          (5) verify that matching funds have been provided by each qualifying organization by
             4099      the date determined in Subsection (4); and
             4100          (6) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
             4101      establish criteria by rule not otherwise prescribed in this chapter for determining the eligibility
             4102      of qualifying organizations to receive moneys from the state fund.
             4103          Section 115. Section 9-7-213 is amended to read:
             4104           9-7-213. Rulemaking.
             4105          The division may make rules in accordance with Title 63G, Chapter 3, Utah
             4106      Administrative Rulemaking Act, necessary to implement and administer the provisions of this
             4107      chapter including:
             4108          (1) standards which [must] shall be met by libraries to obtain and retain a designation
             4109      as a depository library;
             4110          (2) the method by which grants are made to individual libraries, but not including
             4111      appropriations made directly to any other agency or institution;
             4112          (3) standards for the certification of public librarians; and
             4113          (4) standards for the public library online access policy required in Section 9-7-215 .
             4114          Section 116. Section 9-7-504 is amended to read:
             4115           9-7-504. Library board duties -- Library fund deposits.
             4116          (1) The library board of directors shall, with the approval of the county executive and
             4117      in accordance with county ordinances, policies, and procedures:
             4118          (a) be responsible for:
             4119          (i) the expenditure of the library fund;


             4120          (ii) the construction, lease, or sale of library buildings and land; and
             4121          (iii) the operation and care of the library; and
             4122          (b) purchase, lease, or sell land, and purchase, lease, construct, or sell buildings, for the
             4123      benefit of the library.
             4124          (2) The board has those powers and duties as prescribed by county ordinance,
             4125      including[, but not limited to,] establishing policies for collections and information resources
             4126      that are consistent with state and federal law.
             4127          (3) (a) All tax moneys received for the library shall be deposited in the county treasury
             4128      to the credit of the library fund, and may not be used for any purpose except that of the county
             4129      library.
             4130          (b) All moneys collected by the library shall be deposited to the credit of the library
             4131      fund.
             4132          Section 117. Section 9-12-103 is amended to read:
             4133           9-12-103. Eligibility criteria.
             4134          In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             4135      department may make rules establishing eligibility criteria for recipients of assistance under
             4136      this chapter. A recipient of assistance under this chapter [must] shall demonstrate:
             4137          (1) that the recipient's family, household, or individual income is 150% of the federal
             4138      poverty level or less;
             4139          (2) that the recipient is responsible for paying the recipient's home energy costs; and
             4140          (3) compliance with any rules established by the department under this section.
             4141          Section 118. Section 9-12-201 is amended to read:
             4142           9-12-201. Moratorium on involuntary termination for nonpayment of utility bills
             4143      -- Eligibility criteria -- Department to establish and certify.
             4144          (1) The department shall establish a program for a seasonal moratorium for involuntary
             4145      termination for nonpayment by residential customers of essential utility bills. An essential
             4146      utility is a utility regulated by the Public Service Commission under Title 54, which is in the
             4147      business of the retail distribution of electricity or natural gas. A residential customer is a
             4148      customer defined as in a residential class by the Public Service Commission.
             4149          (2) A residential customer [must] shall meet the following criteria to qualify for the
             4150      program:


             4151          (a) gross household income is less than 125% of the federal poverty level or the
             4152      household has suffered a medical or other emergency, loss of employment, or is experiencing
             4153      other circumstances which have resulted in a substantial loss of income;
             4154          (b) the customer has made application to public and private energy assistance
             4155      programs;
             4156          (c) the customer is willing to make a good faith effort to pay these utility bills on a
             4157      consistent basis; and
             4158          (d) any additional information required by the department.
             4159          (3) A residential customer may file with a local department office an affidavit attesting
             4160      eligibility under the criteria in Subsection (2). The department shall certify that the customer
             4161      has met the eligibility requirements and forward a copy of the affidavit to the effected utility.
             4162          Section 119. Section 10-1-105 is amended to read:
             4163           10-1-105. No changes intended.
             4164          Unless otherwise specifically provided in this act, the provisions of this act [shall not]
             4165      may not operate in any way to affect the property or contract rights or other actions which may
             4166      exist in favor of or against any municipality. Nor shall this act operate in any way to change or
             4167      affect any ordinance, order or resolution in force in any municipality and such ordinances,
             4168      orders and resolutions which are not repugnant to law, shall continue in full force and effect
             4169      until repealed or amended.
             4170          Section 120. Section 10-1-108 is amended to read:
             4171           10-1-108. Cumulative powers -- Powers not in derogation of state agencies.
             4172          The provisions of this act or any other act not expressly repealed by Section 10-1-114
             4173      shall be considered as an alternative or additional power and not as a limitation on any other
             4174      power granted to or possessed by municipalities. The provisions of this act [shall not] may not
             4175      be considered as impairing, altering, modifying or repealing any of the jurisdiction or powers
             4176      possessed by any department, division, commission, board, or office of state government.
             4177          Section 121. Section 10-1-109 is amended to read:
             4178           10-1-109. Saving clause.
             4179          The repeal of the titles, chapters and sections specified in Section 10-1-114 [shall not]
             4180      do not:
             4181          (1) affect suits pending or rights existing immediately prior to the effective date of this


             4182      act;
             4183          (2) impair, avoid, or affect any grant or conveyance made or right acquired or cause of
             4184      action now existing under any repealed act or amendment thereto; or
             4185          (3) affect or impair the validity of any bonds or other obligation issued or sold prior to
             4186      the effective date of this act.
             4187          The repeal of any validating act or part thereof [shall not] does not avoid the effect of
             4188      the validation. No act repealed by Section 10-1-114 shall repeal any act or part thereof which
             4189      embraces the same or similar subject matter as the act repealed.
             4190          Section 122. Section 10-1-112 is amended to read:
             4191           10-1-112. Headings do not limit sections.
             4192          Title, chapter, part, or section headings contained herein [shall not] may not be deemed
             4193      to govern, limit, modify or in any manner affect the scope, meaning or intent of the provisions
             4194      of any title, chapter, part or section of this act.
             4195          Section 123. Section 10-1-113 is amended to read:
             4196           10-1-113. Severability clause.
             4197          If any chapter, part, section, paragraph or subsection of this act, or the application
             4198      thereof is held to be invalid, the remainder of this act [shall not be] is not affected thereby.
             4199          Section 124. Section 10-2-109 is amended to read:
             4200           10-2-109. Incorporation petition -- Requirements and form.
             4201          (1) At any time within 18 months of the completion of the public hearings required
             4202      under Subsection 10-2-108 (1), a petition for incorporation of the area proposed to be
             4203      incorporated as a city may be filed in the office of the clerk of the county in which the area is
             4204      located.
             4205          (2) Each petition under Subsection (1) shall:
             4206          (a) be signed by the owners of private real property that:
             4207          (i) is located within the area proposed to be incorporated;
             4208          (ii) covers at least 1/3 of the total private land area within the area; and
             4209          (iii) is equal in value to at least 1/3 of the value of all private real property within the
             4210      area;
             4211          (b) indicate the typed or printed name and current residence address of each owner
             4212      signing the petition;


             4213          (c) describe the area proposed to be incorporated as a city, as described in the
             4214      feasibility study request or modified request that meets the requirements of Subsection (3);
             4215          (d) state the proposed name for the proposed city;
             4216          (e) designate five signers of the petition as petition sponsors, one of whom shall be
             4217      designated as the contact sponsor, with the mailing address and telephone number of each;
             4218          (f) state that the signers of the petition appoint the sponsors, if the incorporation
             4219      measure passes, to represent the signers in the process of:
             4220          (i) selecting the number of commission or council members the new city [should] will
             4221      have; and
             4222          (ii) drawing district boundaries for the election of commission or council members, if
             4223      the voters decide to elect commission or council members by district;
             4224          (g) be accompanied by and circulated with an accurate plat or map, prepared by a
             4225      licensed surveyor, showing the boundaries of the proposed city; and
             4226          (h) substantially comply with and be circulated in the following form:
             4227          PETITION FOR INCORPORATION OF (insert the proposed name of the proposed
             4228      city)
             4229          To the Honorable County Legislative Body of (insert the name of the county in which
             4230      the proposed city is located) County, Utah:
             4231          We, the undersigned owners of real property within the area described in this petition,
             4232      respectfully petition the county legislative body to submit to the registered voters residing
             4233      within the area described in this petition, at a special election held for that purpose, the
             4234      question of whether the area should incorporate as a city. Each of the undersigned affirms that
             4235      each has personally signed this petition and is an owner of real property within the described
             4236      area, and that the current residence address of each is correctly written after the signer's name.
             4237      The area proposed to be incorporated as a city is described as follows: (insert an accurate
             4238      description of the area proposed to be incorporated).
             4239          (3) A petition for incorporation of a city under Subsection (1) may not be filed unless
             4240      the results of the feasibility study or supplemental feasibility study show that the average
             4241      annual amount of revenue under Subsection 10-2-106 (4)(a)(ix) does not exceed the average
             4242      annual amount of cost under Subsection 10-2-106 (4)(a)(viii) by more than 5%.
             4243          (4) A signature on a request under Section 10-2-103 or a modified request under


             4244      Section 10-2-107 may be used toward fulfilling the signature requirement of Subsection (2)(a):
             4245          (a) if the request under Section 10-2-103 or modified request under Section 10-2-107
             4246      notified the signer in conspicuous language that the signature, unless withdrawn, would also be
             4247      used for purposes of a petition for incorporation under this section; and
             4248          (b) unless the signer files with the county clerk a written withdrawal of the signature
             4249      before the petition under this section is filed with the clerk.
             4250          Section 125. Section 10-2-303 is amended to read:
             4251           10-2-303. Effect of change in class.
             4252          (1) If a municipality changes from one class to another:
             4253          (a) all property, property rights, and other rights that belonged to or were vested in the
             4254      municipality at the time of the change shall belong to and be vested in it after the change;
             4255          (b) no contract, claim, or right of the municipality or demand or liability against it shall
             4256      be altered or affected in any way by the change;
             4257          (c) each ordinance, order, and resolution in force in the municipality when it changes
             4258      classes shall, to the extent that it is not inconsistent with law, not be affected by the change and
             4259      shall remain in effect until repealed or amended;
             4260          (d) the change [shall not] may not affect the identity of the municipality;
             4261          (e) each municipal officer in office at the time of the change shall continue as an
             4262      officer until that officer's term expires and a successor is duly elected and qualified; and
             4263          (f) the municipality maintains after the change in class the same form of government
             4264      that it had immediately before the change.
             4265          (2) (a) A change in class does not affect an action at law, prosecution, business, or
             4266      work of the municipality changing classes, and proceedings shall continue and may be
             4267      conducted and proceed as if no change in class had occurred.
             4268          (b) Notwithstanding Subsection (2)(a), if the law applicable to a municipality under the
             4269      new class provides the municipality a different remedy with respect to a right that it possessed
             4270      at the time of the change, the remedy shall be cumulative to the remedy applicable before the
             4271      change in class.
             4272          Section 126. Section 10-2-403 is amended to read:
             4273           10-2-403. Annexation petition -- Requirements -- Notice required before filing.
             4274          (1) Except as provided in Section 10-2-418 , the process to annex an unincorporated


             4275      area to a municipality is initiated by a petition as provided in this section.
             4276          (2) (a) (i) Before filing a petition under Subsection (1) with respect to the proposed
             4277      annexation of an area located in a county of the first class, the person or persons intending to
             4278      file a petition shall:
             4279          (A) file with the city recorder or town clerk of the proposed annexing municipality a
             4280      notice of intent to file a petition; and
             4281          (B) send a copy of the notice of intent to each affected entity.
             4282          (ii) Each notice of intent under Subsection (2)(a)(i) shall include an accurate map of the
             4283      area that is proposed to be annexed.
             4284          (b) (i) Subject to Subsection (2)(b)(ii), the county in which the area proposed to be
             4285      annexed is located shall:
             4286          (A) mail the notice described in Subsection (2)(b)(iii) to:
             4287          (I) each owner of real property located within the area proposed to be annexed; and
             4288          (II) each owner of real property located within 300 feet of the area proposed to be
             4289      annexed; and
             4290          (B) send to the proposed annexing municipality a copy of the notice and a certificate
             4291      indicating that the notice has been mailed as required under Subsection (2)(b)(i)(A).
             4292          (ii) The county shall mail the notice required under Subsection (2)(b)(i)(A) within 20
             4293      days after receiving from the person or persons who filed the notice of intent:
             4294          (A) a written request to mail the required notice; and
             4295          (B) payment of an amount equal to the county's expected actual cost of mailing the
             4296      notice.
             4297          (iii) Each notice required under Subsection (2)(b)(i)(A) shall:
             4298          (A) be in writing;
             4299          (B) state, in bold and conspicuous terms, substantially the following:
             4300          "Attention: Your property may be affected by a proposed annexation.
             4301          Records show that you own property within an area that is intended to be included in a
             4302      proposed annexation to (state the name of the proposed annexing municipality) or that is within
             4303      300 feet of that area. If your property is within the area proposed for annexation, you may be
             4304      asked to sign a petition supporting the annexation. You may choose whether or not to sign the
             4305      petition. By signing the petition, you indicate your support of the proposed annexation. If you


             4306      sign the petition but later change your mind about supporting the annexation, you may
             4307      withdraw your signature by submitting a signed, written withdrawal with the recorder or clerk
             4308      of (state the name of the proposed annexing municipality) within 30 days after (state the name
             4309      of the proposed annexing municipality) receives notice that the petition has been certified.
             4310          There will be no public election on the proposed annexation because Utah law does not
             4311      provide for an annexation to be approved by voters at a public election. Signing or not signing
             4312      the annexation petition is the method under Utah law for the owners of property within the area
             4313      proposed for annexation to demonstrate their support of or opposition to the proposed
             4314      annexation.
             4315          You may obtain more information on the proposed annexation by contacting (state the
             4316      name, mailing address, telephone number, and email address of the official or employee of the
             4317      proposed annexing municipality designated to respond to questions about the proposed
             4318      annexation), (state the name, mailing address, telephone number, and email address of the
             4319      county official or employee designated to respond to questions about the proposed annexation),
             4320      or (state the name, mailing address, telephone number, and email address of the person who
             4321      filed the notice of intent under Subsection (2)(a)(i)(A), or, if more than one person filed the
             4322      notice of intent, one of those persons). Once filed, the annexation petition will be available for
             4323      inspection and copying at the office of (state the name of the proposed annexing municipality)
             4324      located at (state the address of the municipal offices of the proposed annexing municipality).";
             4325      and
             4326          (C) be accompanied by an accurate map identifying the area proposed for annexation.
             4327          (iv) A county may not mail with the notice required under Subsection (2)(b)(i)(A) any
             4328      other information or materials related or unrelated to the proposed annexation.
             4329          (c) (i) After receiving the certificate from the county as provided in Subsection
             4330      (2)(b)(i)(B), the proposed annexing municipality shall, upon request from the person or persons
             4331      who filed the notice of intent under Subsection (2)(a)(i)(A), provide an annexation petition for
             4332      the annexation proposed in the notice of intent.
             4333          (ii) An annexation petition provided by the proposed annexing municipality may be
             4334      duplicated for circulation for signatures.
             4335          (3) Each petition under Subsection (1) shall:
             4336          (a) be filed with the city recorder or town clerk, as the case may be, of the proposed


             4337      annexing municipality;
             4338          (b) contain the signatures of:
             4339          (i) the owners of private real property that:
             4340          (A) is located within the area proposed for annexation;
             4341          (B) (I) subject to Subsection (3)(b)(i)(B)(II), covers a majority of the private land area
             4342      within the area proposed for annexation; and
             4343          (II) covers 100% of the private land area within the area proposed for annexation, if the
             4344      area is within:
             4345          (Aa) an agriculture protection area created under Title 17, Chapter 41, Agriculture and
             4346      Industrial Protection Areas; or
             4347          (Bb) a migratory bird production area created under Title 23, Chapter 28, Migratory
             4348      Bird Production Area; and
             4349          (C) is equal in value to at least 1/3 of the value of all private real property within the
             4350      area proposed for annexation; or
             4351          (ii) if all the real property within the area proposed for annexation is owned by a public
             4352      entity other than the federal government, the owner of all the publicly owned real property;
             4353          (c) if the petition proposes the annexation of an area located within a township, explain
             4354      that if the annexation petition is granted, the area will also be withdrawn from the township;
             4355          (d) be accompanied by:
             4356          (i) an accurate and recordable map, prepared by a licensed surveyor, of the area
             4357      proposed for annexation; and
             4358          (ii) a copy of the notice sent to affected entities as required under Subsection
             4359      (2)(a)(i)(B) and a list of the affected entities to which notice was sent;
             4360          (e) if the area proposed to be annexed is located in a county of the first class, contain
             4361      on each signature page a notice in bold and conspicuous terms that states substantially the
             4362      following:
             4363          "Notice:
             4364          * There will be no public election on the annexation proposed by this petition because
             4365      Utah law does not provide for an annexation to be approved by voters at a public election.
             4366          * If you sign this petition and later decide that you do not support the petition, you may
             4367      withdraw your signature by submitting a signed, written withdrawal with the recorder or clerk


             4368      of (state the name of the proposed annexing municipality). If you choose to withdraw your
             4369      signature, you [must] shall do so no later than 30 days after (state the name of the proposed
             4370      annexing municipality) receives notice that the petition has been certified.";
             4371          (f) if the petition proposes the annexation of an area located in a county that is not the
             4372      county in which the proposed annexing municipality is located, be accompanied by a copy of
             4373      the resolution, required under Subsection 10-2-402 (6), of the legislative body of the county in
             4374      which the area is located; and
             4375          (g) designate up to five of the signers of the petition as sponsors, one of whom shall be
             4376      designated as the contact sponsor, and indicate the mailing address of each sponsor.
             4377          (4) A petition under Subsection (1) may not propose the annexation of all or part of an
             4378      area proposed for annexation to a municipality in a previously filed petition that has not been
             4379      denied, rejected, or granted.
             4380          (5) A petition under Subsection (1) proposing the annexation of an area located in a
             4381      county of the first class may not propose the annexation of an area that includes some or all of
             4382      an area proposed to be incorporated in a request for a feasibility study under Section 10-2-103
             4383      or a petition under Section 10-2-125 if:
             4384          (a) the request or petition was filed before the filing of the annexation petition; and
             4385          (b) the request, a petition under Section 10-2-109 based on that request, or a petition
             4386      under Section 10-2-125 is still pending on the date the annexation petition is filed.
             4387          (6) If practicable and feasible, the boundaries of an area proposed for annexation shall
             4388      be drawn:
             4389          (a) along the boundaries of existing local districts and special service districts for
             4390      sewer, water, and other services, along the boundaries of school districts whose boundaries
             4391      follow city boundaries or school districts adjacent to school districts whose boundaries follow
             4392      city boundaries, and along the boundaries of other taxing entities;
             4393          (b) to eliminate islands and peninsulas of territory that is not receiving municipal-type
             4394      services;
             4395          (c) to facilitate the consolidation of overlapping functions of local government;
             4396          (d) to promote the efficient delivery of services; and
             4397          (e) to encourage the equitable distribution of community resources and obligations.
             4398          (7) On the date of filing, the petition sponsors shall deliver or mail a copy of the


             4399      petition to:
             4400          (a) the clerk of the county in which the area proposed for annexation is located; and
             4401          (b) if any of the area proposed for annexation is within a township:
             4402          (i) the legislative body of the county in which the township is located; and
             4403          (ii) the chair of the township planning commission.
             4404          (8) A property owner who signs an annexation petition proposing to annex an area
             4405      located in a county of the first class may withdraw the owner's signature by filing a written
             4406      withdrawal, signed by the property owner, with the city recorder or town clerk no later than 30
             4407      days after the municipal legislative body's receipt of the notice of certification under
             4408      Subsection 10-2-405 (2)(c)(i).
             4409          Section 127. Section 10-2-510 is amended to read:
             4410           10-2-510. Boundary adjustment procedure not affected.
             4411          This part [shall not] may not be construed to abrogate, modify, or replace the boundary
             4412      adjustment procedure provided in Section 10-2-419 .
             4413          Section 128. Section 10-2-614 is amended to read:
             4414           10-2-614. Ordinances, resolutions, and orders.
             4415          All ordinances, resolutions and orders, in force in any of the municipalities when it is
             4416      consolidated, shall remain in full force and effect within the respective areas of the
             4417      municipalities which existed prior to consolidation insofar as the ordinances, resolutions and
             4418      orders are not repugnant to law, until repealed or amended, but [shall not] may not in any case
             4419      exceed three years. The governing body of the new municipality shall as soon as possible adopt
             4420      new ordinances, resolutions and orders for the uniform governance of the new municipality.
             4421          Section 129. Section 10-3-508 is amended to read:
             4422           10-3-508. Reconsideration.
             4423          Any action taken by the governing body [shall not] may not be reconsidered or
             4424      rescinded at any special meeting unless the number of members of the governing body present
             4425      at the special meeting is equal to or greater than the number of members present at the meeting
             4426      when the action was approved.
             4427          Section 130. Section 10-3-608 is amended to read:
             4428           10-3-608. Rules of conduct for the public.
             4429          The governing body on a two-thirds vote may expel any person who is disorderly


             4430      during the meeting of the governing body. This section or any action taken by the governing
             4431      body pursuant hereto [shall not] does not preclude prosecution under any other provision of
             4432      law.
             4433          Section 131. Section 10-3-702 is amended to read:
             4434           10-3-702. Extent of power exercised by ordinance.
             4435          The governing body may pass any ordinance to regulate, require, prohibit, govern,
             4436      control or supervise any activity, business, conduct or condition authorized by this act or any
             4437      other provision of law. An officer of the municipality [shall not] may not be convicted of a
             4438      criminal offense where he relied on or enforced an ordinance he reasonably believed to be a
             4439      valid ordinance. It shall be a defense to any action for punitive damages that the official acted
             4440      in good faith in enforcing an ordinance or that he enforced an ordinance on advice of legal
             4441      counsel.
             4442          Section 132. Section 10-3-704 is amended to read:
             4443           10-3-704. Form of ordinance.
             4444          Any ordinance passed by the governing body, after the effective date of this act, shall
             4445      contain and be in substantially the following order and form:
             4446          (1) a number;
             4447          (2) a title which indicates the nature of the subject matter of the ordinance;
             4448          (3) a preamble which states the need or reason for the ordinance;
             4449          (4) an ordaining clause which states "Be it ordained by the ____ (name of the
             4450      governing body and municipality):";
             4451          (5) the body or subject of the ordinance;
             4452          (6) when applicable, a statement indicating the penalty for violation of the ordinance or
             4453      a reference that the punishment is covered by an ordinance which prescribes the fines and
             4454      terms of imprisonment for the violation of a municipal ordinance; or, the penalty may establish
             4455      a classification of penalties and refer to such ordinance in which the penalty for such violation
             4456      is established;
             4457          (7) a statement indicating the effective date of the ordinance or the date when the
             4458      ordinance shall become effective after publication or posting as required by this chapter;
             4459          (8) a line for the signature of the mayor or acting mayor to sign the ordinance;
             4460          (9) a place for the municipal recorder to attest the ordinance and fix the seal of the


             4461      municipality; and
             4462          (10) in municipalities where the mayor may disapprove an ordinance passed by the
             4463      legislative body, the ordinance [must] shall show, that it was passed with the mayor's approval
             4464      or that if the mayor disapproved the ordinance, that it was passed over his disapproval. If the
             4465      mayor neither approves, or disapproves an ordinance, the ordinance [should] shall show that it
             4466      became effective without the approval or disapproval of the mayor.
             4467          Section 133. Section 10-3-717 is amended to read:
             4468           10-3-717. Purpose of resolutions.
             4469          Unless otherwise required by law, the governing body may exercise all administrative
             4470      powers by resolution including[, but not limited to]: (1) establishing water and sewer rates; (2)
             4471      charges for garbage collection and fees charged for municipal services; (3) establishing
             4472      personnel policies and guidelines; and (4) regulating the use and operation of municipal
             4473      property. Punishment, fines or forfeitures may not be imposed by resolution.
             4474          Section 134. Section 10-3-905 is amended to read:
             4475           10-3-905. Fees to be paid in advance.
             4476          The city engineer [shall not] may not record any drawings or instruments, or file any
             4477      papers or notices, or furnish any copies, or render any service connected with his office, until
             4478      the fees for the same are paid or tendered as prescribed by law or ordinance.
             4479          Section 135. Section 10-3-907 is amended to read:
             4480           10-3-907. Recordation not to interfere with other recordation.
             4481          The recording or filing of any drawing or instrument in the city engineer's office [shall
             4482      not] may not interfere or conflict in any way with the recording or filing of the same in other
             4483      offices of record.
             4484          Section 136. Section 10-3-912 is amended to read:
             4485           10-3-912. Chief of department may suspend subordinates.
             4486          (1) The chief of each department may at any time suspend any subordinate officers,
             4487      members, employees, or agents employed therein when in his judgment the good of the service
             4488      demands it, and during the time of suspension, the person suspended [shall not be] is not
             4489      entitled to any salary or compensation whatsoever.
             4490          (2) Any suspension of employees in the classified civil service which exceeds three
             4491      days or 24 working hours is subject to an appeal to the civil service commission as provided in


             4492      Section 10-3-1012 .
             4493          Section 137. Section 10-3-1004 is amended to read:
             4494           10-3-1004. Qualifications of commissioners -- Salary -- Removal.
             4495          Not more than two members of the civil service commission shall at any one time be of
             4496      the same political party. No member of the civil service commission shall during his tenure of
             4497      office hold any other public office, or be a candidate for any other public office. Each member
             4498      shall receive $25 for each meeting of the commission which he shall attend, but [shall not] may
             4499      not receive more than $100 in any one month. In case of misconduct, inability or willful
             4500      neglect in the performance of the duties of the office by any member, the member may be
             4501      removed from office by the board of city commissioners by a majority vote of the entire
             4502      membership, but the member shall, if he so desires, have opportunity to be heard in defense.
             4503          Section 138. Section 10-3-1011 is amended to read:
             4504           10-3-1011. Temporary employees.
             4505          The head of each department, with the advice and consent of the board of city
             4506      commissioners, may employ any person for temporary work only, without making the
             4507      appointment from the certified list, but the appointment [shall not] may not be longer than one
             4508      month in the same calendar year, and under no circumstances shall the temporary employee be
             4509      appointed to a permanent position unless he shall have been duly certified by the civil service
             4510      commission as in other cases.
             4511          Section 139. Section 10-3-1012.5 is amended to read:
             4512           10-3-1012.5. Appeal to Court of Appeals -- Scope of review.
             4513          Any final action or order of the commission may be appealed to the Court of Appeals
             4514      for review. The notice of appeal [must] shall be filed within 30 days of the issuance of the
             4515      final action or order of the commission. The review by Court of Appeals shall be on the record
             4516      of the commission and shall be for the purpose of determining if the commission has abused its
             4517      discretion or exceeded its authority.
             4518          Section 140. Section 10-3-1306 is amended to read:
             4519           10-3-1306. Interest in business entity regulated by municipality -- Disclosure
             4520      statement required.
             4521          (1) Every appointed or elected officer or municipal employee who is an officer,
             4522      director, agent, or employee or the owner of a substantial interest in any business entity which


             4523      is subject to the regulation of the municipality in which he is an elected or appointed officer or
             4524      municipal employee shall disclose the position held and the nature and value of his interest
             4525      upon first becoming appointed, elected, or employed by the municipality, and again at any
             4526      time thereafter if the elected or appointed officer's or municipal employee's position in the
             4527      business entity has changed significantly or if the value of his interest in the entity has
             4528      increased significantly since the last disclosure.
             4529          (2) The disclosure shall be made in a sworn statement filed with the mayor. The mayor
             4530      shall report the substance of all such disclosure statements to the members of the governing
             4531      body, or may provide to the members of the governing body copies of the disclosure statement
             4532      within 30 days after the statement is received by him.
             4533          (3) This section does not apply to instances where the value of the interest does not
             4534      exceed $2,000. Life insurance policies and annuities [shall not] may not be considered in
             4535      determining the value of any such interest.
             4536          Section 141. Section 10-5-103 is amended to read:
             4537           10-5-103. Withholding state money of town failing to file budget.
             4538          The state auditor is authorized to withhold state money allocated to a town if that town
             4539      fails to file a copy of a formally adopted budget or fails to comply with the annual financial
             4540      reporting and independent auditing requirements of this chapter. Such money [shall not] may
             4541      not be withheld if the town substantially complies with the requirements of this chapter.
             4542          Section 142. Section 10-5-107 is amended to read:
             4543           10-5-107. Tentative budgets required for public inspection -- Contents --
             4544      Adoption of tentative budget.
             4545          (1) (a) On or before the first regularly scheduled town council meeting of May, the
             4546      mayor shall:
             4547          (i) prepare for the ensuing year, on forms provided by the state auditor, a tentative
             4548      budget for each fund for which a budget is required;
             4549          (ii) make the tentative budget available for public inspection; and
             4550          (iii) submit the tentative budget to the town council.
             4551          (b) The tentative budget of each fund shall set forth in tabular form:
             4552          (i) actual revenues and expenditures in the last completed fiscal year;
             4553          (ii) estimated total revenues and expenditures for the current fiscal year; and


             4554          (iii) the mayor's estimates of revenues and expenditures for the budget year.
             4555          (2) (a) The mayor shall:
             4556          (i) estimate the amount of revenue available to serve the needs of each fund;
             4557          (ii) estimate the portion to be derived from all sources other than general property
             4558      taxes; and
             4559          (iii) estimate the portion that [must] shall be derived from general property taxes.
             4560          (b) From the estimates required by Subsection (2)(a), the mayor shall compute and
             4561      disclose in the budget the lowest rate of property tax levy that will raise the required amount of
             4562      revenue, calculating the levy on the latest taxable value.
             4563          (3) (a) Before the public hearing required under Section 10-5-108 , the town council:
             4564          (i) shall review, consider, and tentatively adopt the tentative budget in any regular
             4565      meeting or special meeting called for that purpose; and
             4566          (ii) may amend or revise the tentative budget.
             4567          (b) At the meeting at which the town council adopts the tentative budget, the council
             4568      shall establish the time and place of the public hearing required under Section 10-5-108 .
             4569          (4) (a) If within any enterprise utility fund, allocations or transfers that are not
             4570      reasonable allocations of costs between funds are included in a tentative budget, a written
             4571      notice of the date, time, place, and purpose of the hearing shall be mailed to utility fund
             4572      customers at least seven days before the hearing.
             4573          (b) The purpose portion of the notice shall identify:
             4574          (i) the enterprise utility fund from which money is being transferred;
             4575          (ii) the amount being transferred; and
             4576          (iii) the fund to which the money is being transferred.
             4577          Section 143. Section 10-5-114 is amended to read:
             4578           10-5-114. Appropriations limited to estimated revenue.
             4579          The council [shall not] may not make any appropriation in the final budget of any fund
             4580      in excess of the estimated expendable revenue for the budget year of such fund.
             4581          Section 144. Section 10-5-115 is amended to read:
             4582           10-5-115. Expenditures limited to appropriations -- Obligations in excess invalid
             4583      -- Processing claims required.
             4584          Town officers [shall not] may not make or incur expenditures or encumbrances in


             4585      excess of total appropriations for any department in the budget as adopted or as subsequently
             4586      amended. Any obligation contracted by any such officer [shall not] may not be or become
             4587      valid or enforceable against the town. No check or warrant to cover any claim against any
             4588      appropriation shall be drawn until the claim has been processed as provided by this chapter.
             4589          Section 145. Section 10-6-111 is amended to read:
             4590           10-6-111. Tentative budget to be prepared -- Contents -- Estimate of expenditures
             4591      -- Budget message -- Review by governing body.
             4592          (1) (a) On or before the first regularly scheduled meeting of the governing body in the
             4593      last May of the current period, the budget officer shall prepare for the ensuing fiscal period, on
             4594      forms provided by the state auditor, and file with the governing body, a tentative budget for
             4595      each fund for which a budget is required.
             4596          (b) The tentative budget of each fund shall set forth in tabular form:
             4597          (i) the actual revenues and expenditures in the last completed fiscal period;
             4598          (ii) the budget estimates for the current fiscal period;
             4599          (iii) the actual revenues and expenditures for a period of 6 to 21 months, as
             4600      appropriate, of the current fiscal period;
             4601          (iv) the estimated total revenues and expenditures for the current fiscal period;
             4602          (v) the budget officer's estimates of revenues and expenditures for the budget period,
             4603      computed as provided in Subsection (1)(c); and
             4604          (vi) if the governing body elects, the actual performance experience to the extent
             4605      established by Section 10-6-154 and available in work units, unit costs, man hours, or man
             4606      years for each budgeted fund on an actual basis for the last completed fiscal period, and
             4607      estimated for the current fiscal period and for the ensuing budget period.
             4608          (c) (i) In making estimates of revenues and expenditures under Subsection (1)(b)(v),
             4609      the budget officer shall estimate:
             4610          (A) on the basis of demonstrated need, the expenditures for the budget period, after:
             4611          (I) hearing each department head; and
             4612          (II) reviewing the budget requests and estimates of the department heads; and
             4613          (B) (I) the amount of revenue available to serve the needs of each fund;
             4614          (II) the portion of revenue to be derived from all sources other than general property
             4615      taxes; and


             4616          (III) the portion of revenue that [must] shall be derived from general property taxes.
             4617          (ii) The budget officer may revise any department's estimate under Subsection
             4618      (1)(c)(i)(A)(II) that the officer considers advisable for the purpose of presenting the budget to
             4619      the governing body.
             4620          (iii) From the estimate made under Subsection (1)(c)(i)(B)(III), the budget officer shall
             4621      compute and disclose in the budget the lowest rate of property tax levy that will raise the
             4622      required amount of revenue, calculating the levy upon the latest taxable value.
             4623          (2) (a) Each tentative budget, when filed by the budget officer with the governing body,
             4624      shall contain the estimates of expenditures submitted by department heads, together with
             4625      specific work programs and such other supporting data as this chapter requires or the governing
             4626      body may request. Each city of the first or second class shall, and a city of the third, fourth, or
             4627      fifth class may, submit a supplementary estimate of all capital projects which each department
             4628      head believes should be undertaken within the next three succeeding years.
             4629          (b) Each tentative budget submitted by the budget officer to the governing body shall
             4630      be accompanied by a budget message, which shall explain the budget, contain an outline of the
             4631      proposed financial policies of the city for the budget period, and shall describe the important
             4632      features of the budgetary plan. It shall set forth the reasons for salient changes from the
             4633      previous fiscal period in appropriation and revenue items and shall explain any major changes
             4634      in financial policy.
             4635          (3) Each tentative budget shall be reviewed, considered, and tentatively adopted by the
             4636      governing body in any regular meeting or special meeting called for the purpose and may be
             4637      amended or revised in such manner as is considered advisable prior to public hearings, except
             4638      that no appropriation required for debt retirement and interest or reduction of any existing
             4639      deficits pursuant to Section 10-6-117 , or otherwise required by law or ordinance, may be
             4640      reduced below the minimums so required.
             4641          (4) (a) If the municipality is acting pursuant to Section 10-2-120 , the tentative budget
             4642      shall:
             4643          (i) be submitted to the governing body-elect as soon as practicable; and
             4644          (ii) cover each fund for which a budget is required from the date of incorporation to the
             4645      end of the fiscal year.
             4646          (b) The governing body shall substantially comply with all other provisions of this


             4647      chapter, and the budget shall be passed upon incorporation.
             4648          Section 146. Section 10-6-116 is amended to read:
             4649           10-6-116. Accumulated fund balances -- Limitations -- Excess balances --
             4650      Unanticipated excess of revenues -- Reserves for capital improvements.
             4651          (1) Cities are permitted to accumulate retained earnings or fund balances, as
             4652      appropriate, in any fund. With respect to the General Fund only, any accumulated fund balance
             4653      is restricted to the following purposes:
             4654          (a) to provide working capital to finance expenditures from the beginning of the budget
             4655      period until general property taxes, sales taxes, or other applicable revenues are collected,
             4656      thereby reducing the amount which the city must borrow during the period, but this Subsection
             4657      (1)(a) does not permit the appropriation of any fund balance for budgeting purposes except as
             4658      provided in Subsection (4);
             4659          (b) to provide a resource to meet emergency expenditures under Section 10-6-129 ; and
             4660          (c) to cover a pending year-end excess of expenditures over revenues from an
             4661      unavoidable shortfall in revenues. This provision does not permit the appropriation of any
             4662      fund balance to avoid an operating deficit during any budget period except as provided under
             4663      Subsection (4), or for emergency purposes under Section 10-6-129 .
             4664          (2) The accumulation of a fund balance in the General Fund [shall not] may not exceed
             4665      18% of the total estimated revenue of the General Fund.
             4666          (3) If the fund balance at the close of any fiscal period exceeds the amount permitted
             4667      under Subsection (2), the excess shall be appropriated in the manner provided in Section
             4668      10-6-117 .
             4669          (4) Any fund balance in excess of 5% of the total revenues of the General Fund may be
             4670      utilized for budget purposes.
             4671          (5) (a) Within a capital improvements fund the governing body may, in any budget
             4672      period, appropriate from estimated revenue or fund balance to a reserve for capital
             4673      improvements for the purpose of financing future specific capital improvements, under a
             4674      formal long-range capital plan adopted by the governing body.
             4675          (b) The reserves may accumulate from fiscal period to fiscal period until the
             4676      accumulated total is sufficient to permit economical expenditure for the specified purposes.
             4677          (c) Disbursements from these reserves shall be made only by transfer to a revenue or


             4678      transfer account within the capital improvements fund, under a budget appropriation in a
             4679      budget for the fund adopted in the manner provided by this chapter.
             4680          (d) Expenditures from the above appropriation budget accounts shall conform to all
             4681      requirements of this chapter relating to execution and control of budgets.
             4682          Section 147. Section 10-6-123 is amended to read:
             4683           10-6-123. Expenditures or encumbrances in excess of appropriations prohibited
             4684      -- Processing claims.
             4685          City officers [shall not] may not make or incur expenditures or encumbrances in excess
             4686      of total appropriations for any department in the budget as adopted or as subsequently
             4687      amended. Any obligation contracted by any such officer [shall not] may not be or become valid
             4688      or enforceable against the city. No check or warrant to cover any claim against any
             4689      appropriation shall be drawn until the claim has been processed as provided by this chapter.
             4690          Section 148. Section 10-6-159 is amended to read:
             4691           10-6-159. Financial administration ordinance -- Provisions.
             4692          The financial administration ordinances adopted pursuant to Section 10-6-158 shall
             4693      provide for the following:
             4694          (1) a maximum sum over which all purchases may not be made without the approval of
             4695      the mayor in the council-mayor optional form of government or the governing body in other
             4696      cities; however, this section [shall not] does not prevent the mayor in the council-mayor
             4697      optional form of government or the governing body in other cities from approving all or part of
             4698      a list of verified claims, including a specific claim in an amount in excess of the stated
             4699      maximum, where certified by the appropriate financial officer or officers of the city;
             4700          (2) that the financial officer be bonded for a reasonable amount; and
             4701          (3) such other provisions as the governing body may deem advisable.
             4702          Section 149. Section 10-7-4 is amended to read:
             4703           10-7-4. Water supply -- Acquisition -- Condemnation -- Protest -- Special election
             4704      -- Determination of just compensation.
             4705          (1) The board of commissioners, city council or board of trustees of any city or town
             4706      may acquire, purchase or lease all or any part of any water, waterworks system, water supply or
             4707      property connected therewith, and whenever the governing body of a city or town shall deem it
             4708      necessary for the public good such city or town may bring condemnation proceedings to


             4709      acquire the same; provided, that if within 30 days after the passage and publication of a
             4710      resolution or ordinance for the purchase or lease or condemnation herein provided for one-third
             4711      of the resident taxpayers of the city or town, as shown by the assessment roll, shall protest
             4712      against the purchase, lease or condemnation proceedings contemplated, such proposed
             4713      purchase, lease or condemnation shall be referred to a special election, and if confirmed by a
             4714      majority vote thereat, shall take effect; otherwise it shall be void.
             4715          (2) In all condemnation proceedings the value of land affected by the taking [must]
             4716      shall be considered in connection with the water or water rights taken for the purpose of
             4717      supplying the city or town or the inhabitants thereof with water.
             4718          (3) In determining just compensation in a condemnation proceeding under this section
             4719      in a municipality located in a county of the first class where a determination of market value of
             4720      what is proposed to be taken is impractical because there is no meaningful market for what is
             4721      proposed to be taken, the value shall be:
             4722          (a) presumed to be the amount the owner paid to acquire ownership of what is
             4723      proposed to be taken, as adjusted by a change in value due to post-acquisition deterioration and
             4724      any other factor reasonably and equitably bearing on the value of what is proposed to be taken;
             4725      and
             4726          (b) determined by applying equitable considerations including:
             4727          (i) whether the owner will be unjustly enriched;
             4728          (ii) whether the owner acquired the property by exaction or similar method; and
             4729          (iii) the extent to which the consideration the owner provided in acquiring the property
             4730      consists of an obligation to maintain the property and whether that obligation will be assumed
             4731      by the municipality because of the condemnation.
             4732          (4) This section may not be construed to provide the basis for a municipality's
             4733      condemnation of a political subdivision of the state or of the political subdivision's property or
             4734      holdings.
             4735          Section 150. Section 10-7-5 is amended to read:
             4736           10-7-5. Limitations on lease or purchase.
             4737          It [shall not be] is not lawful for any city or town to lease or purchase any part of such
             4738      waterworks less than the whole, or to lease the same, unless the contract therefor shall provide
             4739      that the city or town shall have control thereof and that the net revenues therefrom shall be


             4740      divided proportionately to the interests of the parties thereto; said contract shall also provide a
             4741      list of water rates to be enforced during the term of such contract.
             4742          Section 151. Section 10-7-18 is amended to read:
             4743           10-7-18. Disposition of money received.
             4744          (1) All money received from the sale of property under Sections 10-7-15 through
             4745      10-7-17 shall be kept in a separate fund, and [shall not] may not be expended, or mixed with
             4746      other funds of the city or town, until all bonds and other indebtedness issued for the purchase
             4747      or construction of the plant or works, together with accumulated interest thereon, have first
             4748      been paid.
             4749          (2) If the property sold brings an amount in excess of the outstanding bonds and other
             4750      indebtedness issued for the purchase or construction of the property sold, the excess shall be
             4751      deposited in a bank in this state under direction of the municipal legislative body, and may not
             4752      thereafter be expended except for some municipal purpose by authority given by the registered
             4753      voters of the city or town at a general or special election called and conducted in the manner set
             4754      forth in Sections 10-7-7 and 10-7-8 .
             4755          Section 152. Section 10-7-32 is amended to read:
             4756           10-7-32. Actions to recover taxes.
             4757          It shall also be competent for any municipality to bring a civil action against any party
             4758      owning or operating any such railway liable to pay such taxes to recover the amount thereof, or
             4759      any part thereof, delinquent and unpaid, in any court having jurisdiction of the amount, and
             4760      obtain judgment and have execution therefor, and no property, real or personal, shall be exempt
             4761      from any such execution; provided, that real estate [shall not] may not be levied upon by
             4762      execution except by execution out of the district court on judgment therein, or transcript of
             4763      judgment filed therein, as is now or hereafter may be provided by law. No defense shall be
             4764      allowed in any such civil action except such as goes to the groundwork, equity and justice of
             4765      the tax, and the burden of proof shall rest upon the party assailing the tax. In case part of such
             4766      special tax shall be shown to be invalid, unjust or inequitable, judgment shall be rendered for
             4767      such amount as is just and equitable.
             4768          Section 153. Section 10-7-71 is amended to read:
             4769           10-7-71. Corporate violation -- Summons -- Time and manner of service.
             4770          The summons and copy of complaint [must] shall be served at least 24 hours before the


             4771      hour of appearance fixed therein by delivering to and leaving a copy thereof with the president
             4772      or other head of the corporation, or the secretary, the cashier, or the managing or process agent
             4773      thereof, and by showing to him the original summons.
             4774          Section 154. Section 10-7-72 is amended to read:
             4775           10-7-72. Appearance by agent of corporation -- Bench warrant for default.
             4776          At the time appointed in the summons, the corporation [must] shall appear by agent or
             4777      attorney and plead thereto the same as a natural person. In case no appearance is made on or
             4778      before the hour appointed, the court may issue a bench warrant for the person served as the
             4779      officer or agent of the corporation, requiring him to be brought forthwith before the court to
             4780      plead on its behalf.
             4781          Section 155. Section 10-7-73 is amended to read:
             4782           10-7-73. Corporate violation -- Hearing -- Penalty imposed to be a fine.
             4783          After the plea of the corporation is entered the court [must] shall fix a time for the
             4784      hearing of the cause, and thereafter the proceedings therein shall be the same as in the cases of
             4785      natural persons charged with violating a city or town ordinance, except that in cases of
             4786      conviction the penalty imposed in all instances shall be by way of fine.
             4787          Section 156. Section 10-7-85 is amended to read:
             4788           10-7-85. Support of the arts.
             4789          The governing body of any municipality may provide for and appropriate funds for the
             4790      support of the arts, including [but not limited to] music, dance, theatre, crafts and visual, folk
             4791      and literary art, for the purpose of enriching the lives of its residents and may establish
             4792      guidelines for the support of the arts.
             4793          Section 157. Section 10-8-15 is amended to read:
             4794           10-8-15. Waterworks -- Construction -- Extraterritorial jurisdiction.
             4795          They may construct or authorize the construction of waterworks within or without the
             4796      city limits, and for the purpose of maintaining and protecting the same from injury and the
             4797      water from pollution their jurisdiction shall extend over the territory occupied by such works,
             4798      and over all reservoirs, streams, canals, ditches, pipes and drains used in and necessary for the
             4799      construction, maintenance and operation of the same, and over the stream or source from which
             4800      the water is taken, for 15 miles above the point from which it is taken and for a distance of 300
             4801      feet on each side of such stream and over highways along such stream or watercourse within


             4802      said 15 miles and said 300 feet; provided, that the jurisdiction of cities of the first class shall be
             4803      over the entire watershed, except that livestock shall be permitted to graze beyond one
             4804      thousand feet from any such stream or source; and provided further, that each city of the first
             4805      class shall provide a highway in and through its corporate limits, and so far as its jurisdiction
             4806      extends, which [shall not] may not be closed to cattle, horses, sheep or hogs driven through any
             4807      such city, or through any territory adjacent thereto over which such city has jurisdiction, but the
             4808      board of commissioners of such city may enact ordinances placing under police regulations the
             4809      manner of driving such cattle, sheep, horses and hogs through such city, or any territory
             4810      adjacent thereto over which it has jurisdiction. They may enact all ordinances and regulations
             4811      necessary to carry the power herein conferred into effect, and are authorized and empowered to
             4812      enact ordinances preventing pollution or contamination of the streams or watercourses from
             4813      which the inhabitants of cities derive their water supply, in whole or in part, for domestic and
             4814      culinary purposes, and may enact ordinances prohibiting or regulating the construction or
             4815      maintenance of any closet, privy, outhouse or urinal within the area over which the city has
             4816      jurisdiction, and provide for permits for the construction and maintenance of the same. In
             4817      granting such permits they may annex thereto such reasonable conditions and requirements for
             4818      the protection of the public health as they deem proper, and may, if deemed advisable, require
             4819      that all closets, privies and urinals along such streams shall be provided with effective septic
             4820      tanks or other germ-destroying instrumentalities.
             4821          Section 158. Section 10-8-16 is amended to read:
             4822           10-8-16. Watercourses leading to and within city -- Mill privileges.
             4823          They may control the water and watercourses leading to the city and regulate and
             4824      control the watercourses and mill privileges within the city; provided, that the control [shall
             4825      not] may not be exercised to the injury of any right already acquired by actual owners.
             4826          Section 159. Section 10-8-17 is amended to read:
             4827           10-8-17. City may act as distributing agent -- Collection of operating costs from
             4828      users.
             4829          When the governing body of a city is acting as distributing agent of water, not the
             4830      property of the corporation, outside of or within its corporate limits, the governing body may
             4831      annually prior to the commencement of the irrigation season determine and fix the sum deemed
             4832      necessary to meet the expense of the current year for the purpose of controlling, regulating and


             4833      distributing such water and constructing and keeping in repair the necessary means for
             4834      diverting, conveying and distributing the same, and they may collect such sum from the
             4835      persons entitled to the use of such water, pro rata according to acreage, whether the acreage is
             4836      situate within or without the corporate boundary of the city; provided, that the funds so derived
             4837      [shall not] may not be appropriated or used for any other purpose, and in the event that a
             4838      greater sum is collected in any one year than is necessary for said purpose, the excess thereof
             4839      shall be carried to the account of the year next following and applied to the purpose for which
             4840      it was collected. Such sum shall be fixed and collected as provided by ordinance, and until
             4841      collected the same shall be a lien on such water rights and the land irrigated thereby.
             4842          Section 160. Section 10-8-33 is amended to read:
             4843           10-8-33. Railroads -- Tracks and franchises.
             4844          They may permit, regulate or prohibit the locating, constructing or laying of the tracks
             4845      of any railroad, or tramway in any street, alley or public place; and may by ordinance grant
             4846      franchises to railroad and street railroad companies, and to union railroad depot companies, to
             4847      lay, maintain and operate in any street or part or parts of streets or other public places tracks
             4848      therefor, but such permission [shall not] may not be exclusive or for a longer time than one
             4849      hundred years.
             4850          Section 161. Section 10-8-36 is amended to read:
             4851           10-8-36. Flagmen -- Grade crossings -- Drains along tracks.
             4852          They may require railroad companies to keep flagmen at railroad crossings of streets, or
             4853      otherwise provide protection against injury to persons or property; may compel railroad and
             4854      street railroad companies to raise or lower their tracks to conform to any grade which at any
             4855      time may be established by the city, so that such tracks may be crossed at any place on any
             4856      street, alley or highway; may compel railway companies to make and keep open, and keep in
             4857      repair, ditches, drains, sewers and culverts along and under their tracks, so that the natural or
             4858      artificial drainage of adjacent property [shall not] may not be impaired.
             4859          Section 162. Section 10-8-58.5 is amended to read:
             4860           10-8-58.5. Contracting for management, maintenance, operation, or construction
             4861      of jails.
             4862          (1) (a) The governing body of a city or town may contract with private contractors for
             4863      management, maintenance, operation, and construction of city jails.


             4864          (b) The governing body may include a provision in the contract that requires that any
             4865      jail facility meet any federal, state, or local standards for the construction of jails.
             4866          (2) If the governing body contracts only for the management, maintenance, or
             4867      operation of a jail, the governing body shall include provisions in the contract that:
             4868          (a) require the private contractor to post a performance bond in the amount set by the
             4869      governing body;
             4870          (b) establish training standards that [must] shall be met by jail personnel;
             4871          (c) require the private contractor to provide and fund training for jail personnel so that
             4872      the personnel meet the standards established in the contract and any other federal, state, or local
             4873      standards for the operation of jails and the treatment of jail prisoners;
             4874          (d) require the private contractor to indemnify the city or town for errors, omissions,
             4875      defalcations, and other activities committed by the private contractor that result in liability to
             4876      the city or town;
             4877          (e) require the private contractor to show evidence of liability insurance protecting the
             4878      city or town and its officers, employees, and agents from liability arising from the construction,
             4879      operation, or maintenance of the jail, in an amount not less than those specified in Title 63G,
             4880      Chapter 7, Governmental Immunity Act of Utah;
             4881          (f) require the private contractor to:
             4882          (i) receive all prisoners committed to the jail by competent authority; and
             4883          (ii) provide them with necessary food, clothing, and bedding in the manner prescribed
             4884      by the governing body; and
             4885          (g) prohibit the use of inmates by the private contractor for private business purposes
             4886      of any kind.
             4887          (3) A contractual provision requiring the private contractor to maintain liability
             4888      insurance in an amount not less than the liability limits established by Title 63G, Chapter 7,
             4889      Governmental Immunity Act of Utah, may not be construed as waiving the limitation on
             4890      damages recoverable from a governmental entity or its employees established by that chapter.
             4891          Section 163. Section 10-9a-403 is amended to read:
             4892           10-9a-403. Plan preparation.
             4893          (1) (a) The planning commission shall provide notice, as provided in Section
             4894      10-9a-203 , of its intent to make a recommendation to the municipal legislative body for a


             4895      general plan or a comprehensive general plan amendment when the planning commission
             4896      initiates the process of preparing its recommendation.
             4897          (b) The planning commission shall make and recommend to the legislative body a
             4898      proposed general plan for the area within the municipality.
             4899          (c) The plan may include areas outside the boundaries of the municipality if, in the
             4900      planning commission's judgment, those areas are related to the planning of the municipality's
             4901      territory.
             4902          (d) Except as otherwise provided by law or with respect to a municipality's power of
             4903      eminent domain, when the plan of a municipality involves territory outside the boundaries of
             4904      the municipality, the municipality may not take action affecting that territory without the
             4905      concurrence of the county or other municipalities affected.
             4906          (2) (a) At a minimum, the proposed general plan, with the accompanying maps, charts,
             4907      and descriptive and explanatory matter, shall include the planning commission's
             4908      recommendations for the following plan elements:
             4909          (i) a land use element that:
             4910          (A) designates the long-term goals and the proposed extent, general distribution, and
             4911      location of land for housing, business, industry, agriculture, recreation, education, public
             4912      buildings and grounds, open space, and other categories of public and private uses of land as
             4913      appropriate; and
             4914          (B) may include a statement of the projections for and standards of population density
             4915      and building intensity recommended for the various land use categories covered by the plan;
             4916          (ii) a transportation and traffic circulation element consisting of the general location
             4917      and extent of existing and proposed freeways, arterial and collector streets, mass transit, and
             4918      any other modes of transportation that the planning commission considers appropriate, all
             4919      correlated with the population projections and the proposed land use element of the general
             4920      plan; and
             4921          (iii) for cities, an estimate of the need for the development of additional moderate
             4922      income housing within the city, and a plan to provide a realistic opportunity to meet estimated
             4923      needs for additional moderate income housing if long-term projections for land use and
             4924      development occur.
             4925          (b) In drafting the moderate income housing element, the planning commission:


             4926          (i) shall consider the Legislature's determination that cities [should] shall facilitate a
             4927      reasonable opportunity for a variety of housing, including moderate income housing:
             4928          (A) to meet the needs of people desiring to live there; and
             4929          (B) to allow persons with moderate incomes to benefit from and fully participate in all
             4930      aspects of neighborhood and community life; and
             4931          (ii) may include an analysis of why the recommended means, techniques, or
             4932      combination of means and techniques provide a realistic opportunity for the development of
             4933      moderate income housing within the planning horizon, which means or techniques may include
             4934      a recommendation to:
             4935          (A) rezone for densities necessary to assure the production of moderate income
             4936      housing;
             4937          (B) facilitate the rehabilitation or expansion of infrastructure that will encourage the
             4938      construction of moderate income housing;
             4939          (C) encourage the rehabilitation of existing uninhabitable housing stock into moderate
             4940      income housing;
             4941          (D) consider general fund subsidies to waive construction related fees that are
             4942      otherwise generally imposed by the city;
             4943          (E) consider utilization of state or federal funds or tax incentives to promote the
             4944      construction of moderate income housing;
             4945          (F) consider utilization of programs offered by the Utah Housing Corporation within
             4946      that agency's funding capacity; and
             4947          (G) consider utilization of affordable housing programs administered by the
             4948      Department of Community and Culture.
             4949          (c) In drafting the land use element, the planning commission shall:
             4950          (i) identify and consider each agriculture protection area within the municipality; and
             4951          (ii) avoid proposing a use of land within an agriculture protection area that is
             4952      inconsistent with or detrimental to the use of the land for agriculture.
             4953          (3) The proposed general plan may include:
             4954          (a) an environmental element that addresses:
             4955          (i) the protection, conservation, development, and use of natural resources, including
             4956      the quality of air, forests, soils, rivers and other waters, harbors, fisheries, wildlife, minerals,


             4957      and other natural resources; and
             4958          (ii) the reclamation of land, flood control, prevention and control of the pollution of
             4959      streams and other waters, regulation of the use of land on hillsides, stream channels and other
             4960      environmentally sensitive areas, the prevention, control, and correction of the erosion of soils,
             4961      protection of watersheds and wetlands, and the mapping of known geologic hazards;
             4962          (b) a public services and facilities element showing general plans for sewage, water,
             4963      waste disposal, drainage, public utilities, rights-of-way, easements, and facilities for them,
             4964      police and fire protection, and other public services;
             4965          (c) a rehabilitation, redevelopment, and conservation element consisting of plans and
             4966      programs for:
             4967          (i) historic preservation;
             4968          (ii) the diminution or elimination of blight; and
             4969          (iii) redevelopment of land, including housing sites, business and industrial sites, and
             4970      public building sites;
             4971          (d) an economic element composed of appropriate studies and forecasts, as well as an
             4972      economic development plan, which may include review of existing and projected municipal
             4973      revenue and expenditures, revenue sources, identification of basic and secondary industry,
             4974      primary and secondary market areas, employment, and retail sales activity;
             4975          (e) recommendations for implementing all or any portion of the general plan, including
             4976      the use of land use ordinances, capital improvement plans, community development and
             4977      promotion, and any other appropriate action;
             4978          (f) provisions addressing any of the matters listed in Subsection 10-9a-401 (2); and
             4979          (g) any other element the municipality considers appropriate.
             4980          Section 164. Section 10-9a-509.5 is amended to read:
             4981           10-9a-509.5. Review for application completeness -- Substantive application
             4982      review -- Reasonable diligence required for determination of whether improvements or
             4983      warranty work meets standards -- Money damages claim prohibited.
             4984          (1) (a) Each municipality shall, in a timely manner, determine whether an application is
             4985      complete for the purposes of subsequent, substantive land use authority review.
             4986          (b) After a reasonable period of time to allow the municipality diligently to evaluate
             4987      whether all objective ordinance-based application criteria have been met, if application fees


             4988      have been paid, the applicant may in writing request that the municipality provide a written
             4989      determination either that the application is:
             4990          (i) complete for the purposes of allowing subsequent, substantive land use authority
             4991      review; or
             4992          (ii) deficient with respect to a specific, objective, ordinance-based application
             4993      requirement.
             4994          (c) Within 30 days of receipt of an applicant's request under this section, the
             4995      municipality shall either:
             4996          (i) mail a written notice to the applicant advising that the application is deficient with
             4997      respect to a specified, objective, ordinance-based criterion, and stating that the application
             4998      [must] shall be supplemented by specific additional information identified in the notice; or
             4999          (ii) accept the application as complete for the purposes of further substantive
             5000      processing by the land use authority.
             5001          (d) If the notice required by Subsection (1)(c)(i) is not timely mailed, the application
             5002      shall be considered complete, for purposes of further substantive land use authority review.
             5003          (e) (i) The applicant may raise and resolve in a single appeal any determination made
             5004      under this Subsection (1) to the appeal authority, including an allegation that a reasonable
             5005      period of time has elapsed under Subsection (1)(a).
             5006          (ii) The appeal authority shall issue a written decision for any appeal requested under
             5007      this Subsection (1)(e).
             5008          (f) (i) The applicant may appeal to district court the decision of the appeal authority
             5009      made under Subsection (1)(e).
             5010          (ii) Each appeal under Subsection (1)(f)(i) shall be made within 30 days of the date of
             5011      the written decision.
             5012          (2) (a) Each land use authority shall substantively review a complete application and an
             5013      application considered complete under Subsection (1)(d), and shall approve or deny each
             5014      application with reasonable diligence.
             5015          (b) After a reasonable period of time to allow the land use authority to consider an
             5016      application, the applicant may in writing request that the land use authority take final action
             5017      within 45 days from date of service of the written request.
             5018          (c) The land use authority shall take final action, approving or denying the application


             5019      within 45 days of the written request.
             5020          (d) If the land use authority denies an application processed under the mandates of
             5021      Subsection (2)(b), or if the applicant has requested a written decision in the application, the
             5022      land use authority shall include its reasons for denial in writing, on the record, which may
             5023      include the official minutes of the meeting in which the decision was rendered.
             5024          (e) If the land use authority fails to comply with Subsection (2)(c), the applicant may
             5025      appeal this failure to district court within 30 days of the date on which the land use authority
             5026      [should have taken] is required to take final action under Subsection (2)(c).
             5027          (3) (a) With reasonable diligence, each land use authority shall determine whether the
             5028      installation of required subdivision improvements or the performance of warranty work meets
             5029      the municipality's adopted standards.
             5030          (b) (i) An applicant may in writing request the land use authority to accept or reject the
             5031      applicant's installation of required subdivision improvements or performance of warranty work.
             5032          (ii) The land use authority shall accept or reject subdivision improvements within 15
             5033      days after receiving an applicant's written request under Subsection (3)(b)(i), or as soon as
             5034      practicable after that 15-day period if inspection of the subdivision improvements is impeded
             5035      by winter weather conditions.
             5036          (iii) The land use authority shall accept or reject the performance of warranty work
             5037      within 45 days after receiving an applicant's written request under Subsection (3)(b)(i), or as
             5038      soon as practicable after that 45-day period if inspection of the warranty work is impeded by
             5039      winter weather conditions.
             5040          (c) If a land use authority determines that the installation of required subdivision
             5041      improvements or the performance of warranty work does not meet the municipality's adopted
             5042      standards, the land use authority shall comprehensively and with specificity list the reasons for
             5043      its determination.
             5044          (4) Subject to Section 10-9a-509 , nothing in this section and no action or inaction of
             5045      the land use authority relieves an applicant's duty to comply with all applicable substantive
             5046      ordinances and regulations.
             5047          (5) There shall be no money damages remedy arising from a claim under this section.
             5048          Section 165. Section 10-9a-514 is amended to read:
             5049           10-9a-514. Manufactured homes.


             5050          (1) For purposes of this section, a manufactured home is the same as defined in Section
             5051      58-56-3 , except that the manufactured home [must] shall be attached to a permanent
             5052      foundation in accordance with plans providing for vertical loads, uplift, and lateral forces and
             5053      frost protection in compliance with the applicable building code. All appendages, including
             5054      carports, garages, storage buildings, additions, or alterations [must] shall be built in compliance
             5055      with the applicable building code.
             5056          (2) A manufactured home may not be excluded from any land use zone or area in
             5057      which a single-family residence would be permitted, provided the manufactured home
             5058      complies with all local land use ordinances, building codes, and any restrictive covenants,
             5059      applicable to a single family residence within that zone or area.
             5060          (3) A municipality may not:
             5061          (a) adopt or enforce an ordinance or regulation that treats a proposed development that
             5062      includes manufactured homes differently than one that does not include manufactured homes;
             5063      or
             5064          (b) reject a development plan based on the fact that the development is expected to
             5065      contain manufactured homes.
             5066          Section 166. Section 10-9a-519 is amended to read:
             5067           10-9a-519. Elderly residential facilities in areas zoned exclusively for
             5068      single-family dwellings.
             5069          (1) For purposes of this section:
             5070          (a) no person who is being treated for alcoholism or drug abuse may be placed in a
             5071      residential facility for elderly persons; and
             5072          (b) placement in a residential facility for elderly persons shall be on a strictly voluntary
             5073      basis and may not be a part of, or in lieu of, confinement, rehabilitation, or treatment in a
             5074      correctional institution.
             5075          (2) Subject to the granting of a conditional use permit, a residential facility for elderly
             5076      persons shall be allowed in any zone that is regulated to permit exclusively single-family
             5077      dwelling use, if that facility:
             5078          (a) conforms to all applicable health, safety, land use, and building codes;
             5079          (b) is capable of use as a residential facility for elderly persons without structural or
             5080      landscaping alterations that would change the structure's residential character; and


             5081          (c) conforms to the municipality's criteria, adopted by ordinance, governing the
             5082      location of residential facilities for elderly persons in areas zoned to permit exclusively
             5083      single-family dwellings.
             5084          (3) A municipality may, by ordinance, provide that no residential facility for elderly
             5085      persons be established within three-quarters mile of another existing residential facility for
             5086      elderly persons or residential facility for persons with a disability.
             5087          (4) The use granted and permitted by this section is nontransferable and terminates if
             5088      the structure is devoted to a use other than as a residential facility for elderly persons or if the
             5089      structure fails to comply with applicable health, safety, and building codes.
             5090          (5) (a) Municipal ordinances shall prohibit discrimination against elderly persons and
             5091      against residential facilities for elderly persons.
             5092          (b) The decision of a municipality regarding the application for a permit by a
             5093      residential facility for elderly persons [must] shall be based on legitimate land use criteria and
             5094      may not be based on the age of the facility's residents.
             5095          (6) The requirements of this section that a residential facility for elderly persons obtain
             5096      a conditional use permit or other permit do not apply if the facility meets the requirements of
             5097      existing land use ordinances that allow a specified number of unrelated persons to live
             5098      together.
             5099          Section 167. Section 10-11-2 is amended to read:
             5100           10-11-2. Notice to property owners.
             5101          It shall be the duty of such city inspector to make careful examination and investigation,
             5102      as may be provided by ordinance, of the growth and spread of such injurious and noxious
             5103      weeds, and of garbage, refuse or unsightly or deleterious objects or structures; and it shall be
             5104      his duty to ascertain the names of the owners and descriptions of the premises where such
             5105      weeds, garbage, refuse, objects or structures exist, and to serve notice in writing upon the
             5106      owner or occupant of such land, either personally or by mailing notice, postage prepaid,
             5107      addressed to the owner or occupant at the last known post-office address as disclosed by the
             5108      records of the county assessor, requiring such owner or occupant, as the case may be, to
             5109      eradicate, or destroy and remove, the same within such time as the inspector may designate,
             5110      which [shall not] may not be less than 10 days from the date of service of such notice. One
             5111      notice shall be deemed sufficient on any lot or parcel of property for the entire season of weed


             5112      growth during that year. The inspector shall make proof of service of such notice under oath,
             5113      and file the same in the office of the county treasurer.
             5114          Section 168. Section 10-15-4 is amended to read:
             5115           10-15-4. Powers of legislative body of municipality.
             5116          The legislative body of the municipalities of this state shall have the power:
             5117          (1) to establish pedestrian malls;
             5118          (2) to prohibit, in whole or in part, vehicular traffic on a pedestrian mall;
             5119          (3) to pay from the general funds of the municipality, or from other available money, or
             5120      from the proceeds of assessments levied on land benefited by the establishment of a pedestrian
             5121      mall, the damages, if any, allowed or awarded to any property owner by reason of the
             5122      establishment of the pedestrian mall;
             5123          (4) to acquire, construct, and maintain on the municipality's streets which are
             5124      established as a pedestrian mall, improvements of any kind or nature necessary or convenient
             5125      to the operation of such streets as a pedestrian mall, [included but not limited to] including
             5126      paving, sidewalks, curbs, gutters, sewers, drainage works, lighting facilities, fire protection
             5127      facilities, flood protection facilities, water distribution facilities, vehicular parking areas,
             5128      retaining walls, landscaping, tree planting, statuaries, fountains, decorative structures, benches,
             5129      rest rooms, child care facilities, display facilities, information booths, public assembly
             5130      facilities, and other structures, works or improvements necessary or convenient to serve
             5131      members of the public using such pedestrian malls, including the reconstruction or relocation
             5132      of existing municipally owned works, improvements, or facilities on such municipal streets;
             5133      which foregoing changes or any portions thereof, are referred to in this act as "improvements";
             5134          (5) to pay from the general funds of the municipality or other available moneys, or
             5135      from the proceeds of assessments levied on property benefited by any such improvements, or
             5136      from the proceeds of special improvement warrants or bonds, the whole or any portion of the
             5137      costs of acquisition, construction, and maintenance of such improvements in accordance with
             5138      the provisions of Title 11, Chapter 42, Assessment Area Act, relating to special improvement
             5139      assessments; and
             5140          (6) to do any and all other acts or things necessary or convenient for the
             5141      accomplishment of the purposes of this chapter.
             5142          Section 169. Section 11-8-1 is amended to read:


             5143           11-8-1. Contracts for joint use, operation, and ownership of sewage lines and
             5144      sewage treatment and disposal systems.
             5145          Any county, incorporated municipality, improvement district, taxing district or other
             5146      political subdivision of the state of Utah which now or hereafter owns and operates sanitary
             5147      sewer facilities (each of which is hereinafter referred to as a "public owner") is hereby granted
             5148      authority:
             5149          (a) To enter into long-term contracts with any other public owner or public owners
             5150      pursuant to which sewage lines, sewage treatment and sewage disposal facilities, or any part
             5151      thereof, of one or more public owners shall be available for collection, treatment and disposal,
             5152      or any part thereof, of the sewage collected by one or more other public owners, or of sewage
             5153      collected jointly, pursuant to such terms and conditions and for such consideration as may be
             5154      provided in such contracts. Annual payments due by any such public owner for services
             5155      received under any such contract [shall not] may not be construed to be an indebtedness of such
             5156      public owner within the meaning of any constitutional or statutory restriction, and no election
             5157      shall be necessary for the authorization of such contract. Any public owner or owners so
             5158      contracting to make available sewage collection, sewage treatment and disposal facilities, or
             5159      any part thereof, may in any such contract agree to make available to such other public owner
             5160      or owners a specified part of its facilities, without regard to its future need of such specified
             5161      part for its own use, and may in such contract agree to increase the capacity of its facilities
             5162      from time to time in the future if necessary in order to take care of its own needs and to
             5163      perform its obligations to the other parties to such contract.
             5164          (b) To construct or otherwise acquire joint interests in, and to own jointly, sewer lines,
             5165      sewage treatment and disposal facilities, or any part thereof for their common use. To such end,
             5166      any public owner may sell to any other public owner or owners a partial interest or interests in
             5167      any of its sewer lines, sewage treatment and disposal facilities. Any public owner may issue its
             5168      bonds for the purpose of acquiring such joint interest in sewer lines, sewage treatment and
             5169      disposal facilities, or any part thereof, whether such joint interest is to be acquired through the
             5170      construction of new facilities or the purchase of such interest in existing facilities, which bonds
             5171      may be issued under the provisions and in the manner provided in any available law
             5172      authorizing the issuance of bonds for the acquisition of sanitary sewer facilities by such public
             5173      owner.


             5174          (c) To operate jointly with any other public owner or owners, sewer lines, sewage
             5175      treatment and disposal facilities, or any part thereof, which they may own jointly.
             5176          Section 170. Section 11-13-309 is amended to read:
             5177           11-13-309. Venue for civil action -- No trial de novo.
             5178          (1) Any civil action seeking to challenge, enforce, or otherwise have reviewed, any
             5179      order of the board, or any alleviation contract, shall be brought only in the district court for the
             5180      county within which is located the candidate to which the order or contract pertains. If the
             5181      candidate is the state of Utah, the action shall be brought in the district court for Salt Lake
             5182      County. Any action brought in any judicial district shall be ordered transferred to the court
             5183      where venue is proper under this section.
             5184          (2) In any civil action seeking to challenge, enforce, or otherwise review, any order of
             5185      the board, a trial de novo [shall not] may not be held. The matter shall be considered on the
             5186      record compiled before the board, and the findings of fact made by the board [shall not] may
             5187      not be set aside by the district court unless the board clearly abused its discretion.
             5188          Section 171. Section 11-13-311 is amended to read:
             5189           11-13-311. Credit for impact alleviation payments against in lieu of ad valorem
             5190      property taxes -- Federal or state assistance.
             5191          (1) In consideration of the impact alleviation payments and means provided by the
             5192      project entity or other public agency pursuant to the contracts and determination orders, the
             5193      project entity or other public agency, as the case may be, shall be entitled to a credit against the
             5194      fees paid in lieu of ad valorem property taxes as provided by Section 11-13-302 , ad valorem
             5195      property or other taxation by, or other payments in lieu of ad valorem property taxation or other
             5196      form of tax equivalent payments required by any candidate which is a party to an impact
             5197      alleviation contract or board order.
             5198          (2) Each candidate may make application to any federal or state governmental authority
             5199      for any assistance that may be available from that authority to alleviate the impacts to the
             5200      candidate. To the extent that the impact was attributable to the project or to the facilities
             5201      providing additional project capacity, any assistance received from that authority shall be
             5202      credited to the alleviation obligation with respect to the project or the facilities providing
             5203      additional project capacity, as the case may be, in proportion to the percentage of impact
             5204      attributable to the project or facilities providing additional project capacity, but in no event


             5205      shall the candidate realize less revenues than would have been realized without receipt of any
             5206      assistance.
             5207          (3) With respect to school districts the fee in lieu of ad valorem property tax for the
             5208      state minimum school program required to be paid by the project entity or other public agency
             5209      under Subsection 11-13-302 (2)(b)(i) shall be treated as a separate fee and [shall not] does not
             5210      affect any credits for alleviation payments received by the school districts under Subsection
             5211      11-13-302 (2)(b)(i), or Sections 11-13-305 and 11-13-306 .
             5212          Section 172. Section 11-14-302 is amended to read:
             5213           11-14-302. Resolution -- Negotiability -- Registration -- Maturity -- Interest --
             5214      Payment -- Redemption -- Combining issues -- Sale -- Financing plan.
             5215          (1) Bonds issued under this chapter shall be authorized by resolution of the governing
             5216      body, shall be fully negotiable for all purposes, may be made registrable as to principal alone or
             5217      as to principal and interest, shall mature at such time or times not more than 40 years from their
             5218      date, shall bear interest at such rate or rates, if any, shall be payable at such place or places,
             5219      shall be in such form, shall be executed in such manner, may be made redeemable prior to
             5220      maturity at such times and on such terms, shall be sold in such manner and at such prices,
             5221      either at, in excess of, or below face value, and generally shall be issued in such manner and
             5222      with such details as may be provided by resolution; it being the express intention of the
             5223      legislature that interest rate limitations elsewhere appearing in the laws of Utah [shall not] do
             5224      not apply to nor limit the rate of interest on bonds issued under this chapter. The resolution
             5225      shall specify either the rate or rates of interest, if any, on the bonds or specify the method by
             5226      which the interest rate or rates on the bonds may be determined while the bonds are
             5227      outstanding. If the resolution specifies a method by which interest on the bonds may be
             5228      determined, the resolution shall also specify the maximum rate of interest the bonds may bear.
             5229      Bonds voted for different purposes by separate propositions at the same or different bond
             5230      elections may in the discretion of the governing body be combined and offered for sale as one
             5231      issue of bonds. The resolution providing for this combination and the printed bonds for the
             5232      combined issue shall separately set forth the amount being issued for each of the purposes
             5233      provided for in each proposition submitted to the electors. If the local political subdivision has
             5234      retained a fiscal agent to assist and advise it with respect to the bonds and the fiscal agent has
             5235      received or is to receive a fee for such services, the bonds may be sold to the fiscal agent but


             5236      only if the sale is made pursuant to a sealed bid submitted by the fiscal agent at an advertised
             5237      public sale.
             5238          (2) (a) All bonds shall be paid by the treasurer of the local political subdivision or the
             5239      treasurer's duly authorized agent on their respective maturity dates or on the dates fixed for the
             5240      bonds redemption. All bond coupons, other than coupons cancelled because of the redemption
             5241      of the bonds to which they apply, shall similarly be paid on their respective dates or as soon
             5242      thereafter as the bonds or coupons are surrendered.
             5243          (b) Upon payment of a bond or coupon, the treasurer of the local political subdivision
             5244      or the treasurer's duly authorized agent, shall perforate the bond or coupon with a device
             5245      suitable to indicate payment.
             5246          (c) Any bonds or coupons which have been paid or cancelled may be destroyed by the
             5247      treasurer of the local political subdivision or by the treasurer's duly authorized agent.
             5248          (3) Bonds, bond anticipation notes, or tax anticipation notes with maturity dates of one
             5249      year or less may be authorized by a local political subdivision from time to time pursuant to a
             5250      plan of financing adopted by the governing body. The plan of financing shall specify the terms
             5251      and conditions under which the bonds or notes may be issued, sold, and delivered, the officers
             5252      of the local political subdivision authorized to issue the bonds or notes, the maximum amount
             5253      of bonds or notes which may be outstanding at any one time, the source or sources of payment
             5254      of the bonds or notes, and all other details necessary for issuance of the bonds or notes.
             5255      Subject to the Constitution, the governing body of the local political subdivision may include
             5256      in the plan of financing the terms and conditions of agreements which may be entered into by
             5257      the local political subdivision with banking institutions for letters of credit or for standby letters
             5258      of credit to secure the bonds or notes, including payment from any legally available source of
             5259      fees, charges, or other amounts coming due under the agreements entered into by the local
             5260      political subdivision.
             5261          Section 173. Section 11-14-308 is amended to read:
             5262           11-14-308. Special service district bonds secured by federal mineral lease
             5263      payments -- Use of bond proceeds -- Bond resolution -- Nonimpairment of appropriation
             5264      formula -- Issuance of bonds.
             5265          (1) Special service districts may:
             5266          (a) issue bonds payable, in whole or in part, from federal mineral lease payments which


             5267      are to be deposited into the Mineral Lease Account under Section 59-21-1 and distributed to
             5268      special service districts under Subsection 59-21-2 (2)(h); or
             5269          (b) pledge all or any part of the mineral lease payments referred to in Subsection (1)(a)
             5270      as an additional source of payment for their general obligation bonds.
             5271          (2) The proceeds of these bonds may be used:
             5272          (a) to construct, repair, and maintain streets and roads;
             5273          (b) to fund any reserves and costs incidental to the issuance of the bonds and pay any
             5274      associated administrative costs; and
             5275          (c) for capital projects of the special service district.
             5276          (3) (a) The special service district board shall enact a resolution authorizing the
             5277      issuance of bonds which, until the bonds have been paid in full:
             5278          (i) shall be irrevocable; and
             5279          (ii) may not be amended in any manner that would:
             5280          (A) impair the rights of the bond holders; or
             5281          (B) jeopardize the timely payment of principal or interest when due.
             5282          (b) Notwithstanding any other provision of this chapter, the resolution may contain
             5283      covenants with the bond holder regarding:
             5284          (i) mineral lease payments, or their disposition;
             5285          (ii) the issuance of future bonds; or
             5286          (iii) other pertinent matters considered necessary by the governing body to:
             5287          (A) assure the marketability of the bonds; or
             5288          (B) insure the enforcement, collection, and proper application of mineral lease
             5289      payments.
             5290          (4) (a) Except as provided in Subsection (4)(b), the state may not alter, impair, or limit
             5291      the statutory appropriation formula provided in Subsection 59-21-2 (2)(h), in a manner that
             5292      reduces the amounts to be distributed to the special service district until the bonds and the
             5293      interest on the bonds are fully met and discharged. Each special service district may include
             5294      this pledge and undertaking of the state in these bonds.
             5295          (b) Nothing in this section:
             5296          (i) may preclude the alteration, impairment, or limitation of these bonds if adequate
             5297      provision is made by law for the protection of the bond holders; or


             5298          (ii) shall be construed:
             5299          (A) as a pledge guaranteeing the actual dollar amount ultimately received by individual
             5300      special service districts;
             5301          (B) to require the Department of Transportation to allocate the mineral lease payments
             5302      in a manner contrary to the general allocation method described in Subsection 59-21-2 (2)(h); or
             5303          (C) to limit the Department of Transportation in making rules or procedures allocating
             5304      mineral lease payments pursuant to Subsection 59-21-2 (2)(h).
             5305          (5) (a) The average annual installments of principal and interest on bonds to which
             5306      mineral lease payments have been pledged as the sole source of payment may not at any one
             5307      time exceed:
             5308          (i) 80% of the total mineral lease payments received by the issuing entity during the
             5309      fiscal year of the issuing entity immediately preceding the fiscal year in which the resolution
             5310      authorizing the issuance of bonds is adopted; or
             5311          (ii) if the bonds are issued during the first fiscal year the issuing entity is eligible to
             5312      receive funds, 60% of the amount estimated by the Department of Transportation to be
             5313      appropriated to the issuing entity in that fiscal year.
             5314          (b) The Department of Transportation [shall not be] is not liable for any loss or damage
             5315      resulting from reliance on the estimates.
             5316          (6) The final maturity date of the bonds may not exceed 15 years from the date of their
             5317      issuance.
             5318          (7) Bonds may not be issued under this section after December 31, 2010.
             5319          (8) Bonds which are payable solely from a special fund into which mineral lease
             5320      payments are deposited constitute a borrowing based solely upon the credit of the mineral lease
             5321      payments received or to be received by the special service district and do not constitute an
             5322      indebtedness or pledge of the general credit of the special service district or the state.
             5323          Section 174. Section 11-14-313 is amended to read:
             5324           11-14-313. Issuance of negotiable notes or bonds authorized -- Limitation on
             5325      amount of tax anticipation notes or bonds -- Procedure.
             5326          (1) (a) For the purpose of meeting the current expenses of the local political
             5327      subdivision and for any other purpose for which funds of the local political subdivision may be
             5328      expended, a local political subdivision may, if authorized by a resolution of its governing body,


             5329      borrow money by issuing its negotiable notes or bonds in an initial principal amount:
             5330          (i) not in excess of 90% of the taxes and other revenues of the local political
             5331      subdivision for the current fiscal year, if the notes or bonds are issued after the annual tax levy
             5332      for taxes falling due during the fiscal year in which the notes or bonds are issued;
             5333          (ii) not in excess of 75% of the taxes and other revenues of the local political
             5334      subdivision for the preceding fiscal year, if the notes or bonds are issued prior to the annual tax
             5335      levy for taxes falling due during the fiscal year in which the bonds or notes are issued; or
             5336          (iii) not in excess of 75% of the taxes and other revenues that the governing body of
             5337      the local political subdivision estimates that the local political subdivision will receive for the
             5338      current fiscal year, if the notes or bonds are issued within 24 months following the creation of
             5339      the local political subdivision.
             5340          (b) The proceeds of the notes or bonds shall be applied only in payment of current and
             5341      necessary expenses and other purposes for which funds of the local political subdivision may
             5342      be expended.
             5343          (c) There shall be included in the annual levy a tax and there shall be provision made
             5344      for the imposition and collection of sufficient revenues other than taxes sufficient to pay the
             5345      notes or bonds at maturity.
             5346          (d) If the taxes and other revenues in any one year are insufficient through delinquency
             5347      or uncollectibility of taxes or other cause to pay when due all the lawful debts of the local
             5348      political subdivision which have been or may hereafter be contracted, the governing body of
             5349      the local political subdivision is authorized and directed to levy and collect in the next
             5350      succeeding year a sufficient tax and to provide for the imposition and collection of sufficient
             5351      revenues other than taxes to pay all of such lawfully contracted indebtedness, and may borrow
             5352      as provided in this section in anticipation of such tax and other revenues to pay any such
             5353      lawfully contracted indebtedness.
             5354          (e) Each resolution authorizing the issuance of tax anticipation notes or bonds shall:
             5355          (i) describe the taxes or revenues in anticipation of which the notes or bonds are to be
             5356      issued; and
             5357          (ii) specify the principal amount of the notes or bonds, any interest rates, including a
             5358      variable interest rate, the notes or bonds shall bear, and the maturity dates of the notes or
             5359      bonds, which dates [shall not] may not extend beyond the last day of the issuing local political


             5360      subdivision's fiscal year.
             5361          (2) Tax anticipation notes or bonds shall be issued and sold in such manner and at such
             5362      prices, whether at, below, or above face value, as the governing body shall by resolution
             5363      determine. Tax anticipation notes or bonds shall be in bearer form, except that the governing
             5364      body may provide for the registration of the notes or bonds in the name of the owner, either as
             5365      to principal alone, or as to principal and interest. Tax anticipation notes or bonds may be made
             5366      redeemable prior to maturity at the option of the governing body in the manner and upon the
             5367      terms fixed by the resolution authorizing their issuance. Tax anticipation notes or bonds shall
             5368      be executed and shall be in such form and have such details and terms as shall be provided in
             5369      the authorizing resolution.
             5370          (3) The provisions of Sections 11-14-303 , 11-14-304 , 11-14-305 , 11-14-313 ,
             5371      11-14-315 , 11-14-316 , 11-14-401 , 11-14-403 , and 11-14-404 shall apply to all tax anticipation
             5372      notes or bonds issued under this section. In applying these sections to tax anticipation notes,
             5373      "bond" or "bonds" as used in these sections shall be deemed to include tax anticipation notes.
             5374          Section 175. Section 11-14-315 is amended to read:
             5375           11-14-315. Nature and validity of bonds issued -- Applicability of other statutory
             5376      provisions -- Budget provision required -- Applicable procedures for issuance.
             5377          Bonds issued under this chapter shall have all the qualities of negotiable paper, shall be
             5378      incontestable in the hands of bona fide purchasers or holders for value and [shall not be] are
             5379      not invalid for any irregularity or defect in the proceedings for their issuance and sale. This
             5380      chapter is intended to afford an alternative method for the issuance of bonds by local political
             5381      subdivisions and [shall not] may not be so construed as to deprive any local political
             5382      subdivision of the right to issue its bonds under authority of any other statute, but nevertheless
             5383      this chapter shall constitute full authority for the issue and sale of bonds by local political
             5384      subdivisions. The provisions of Section 11-1-1 , Utah Code Annotated 1953, [shall not be] are
             5385      not applicable to bonds issued under this chapter. Any local political subdivision subject to the
             5386      provisions of any budget law shall in its annual budget make proper provision for the payment
             5387      of principal and interest currently falling due on bonds issued hereunder, but no provision need
             5388      be made in any such budget prior to the issuance of the bonds for the issuance thereof or for the
             5389      expenditure of the proceeds thereof. No ordinance, resolution or proceeding in respect to the
             5390      issuance of bonds hereunder shall be necessary except as herein specifically required, nor shall


             5391      the publication of any resolution, proceeding or notice relating to the issuance of the bonds be
             5392      necessary except as herein required. Any publication made hereunder may be made in any
             5393      newspaper conforming to the terms hereof in which legal notices may be published under the
             5394      laws of Utah, without regard to the designation thereof as the official journal or newspaper of
             5395      the local political subdivision, and as required in Section 45-1-101 . No resolution adopted or
             5396      proceeding taken hereunder shall be subject to referendum petition or to an election other than
             5397      as herein required. All proceedings adopted hereunder may be adopted on a single reading at
             5398      any legally convened meeting of the governing body.
             5399          Section 176. Section 11-17-1.5 is amended to read:
             5400           11-17-1.5. Purpose of chapter.
             5401          (1) (a) The purposes of this chapter are to stimulate the economic growth of the state,
             5402      to promote employment and achieve greater industrial development in the state, to maintain or
             5403      enlarge domestic or foreign markets for Utah industrial products, to authorize municipalities
             5404      and counties in the state to facilitate capital formation, finance, acquire, own, lease, or sell
             5405      projects for the purpose of reducing, abating, or preventing pollution and to protect and
             5406      promote the health, welfare, and safety of the citizens of the state and to improve local health
             5407      and the general welfare by inducing corporations, persons, or entities engaged in health care
             5408      services, including hospitals, nursing homes, extended care facilities, facilities for the care of
             5409      persons with a physical or mental disability, and administrative and support facilities, to locate,
             5410      relocate, modernize, or expand in this state and to assist in the formation of investment capital
             5411      with respect thereto.
             5412          (b) The Legislature declares that the acquisition or financing, or both, of projects under
             5413      the Utah Industrial Facilities and Development Act and the issuance of bonds under it
             5414      constitutes a proper public purpose.
             5415          (2) (a) It is declared that the policy of the state is to encourage the development of free
             5416      enterprise and entrepreneurship for the purpose of the expansion of employment opportunities
             5417      and economic development.
             5418          (b) It is declared that there exists in the state an inadequate amount of locally managed,
             5419      pooled venture capital in the private sector available to invest in early stage businesses having
             5420      high growth potential and that can provide jobs for Utah citizens.
             5421          (c) It is found that venture capital is required for healthy economic development of


             5422      sectors of the economy having high growth and employment potential.
             5423          (d) It is further found that the public economic development purposes of the state and
             5424      its counties and municipalities can be fostered by the sale of industrial revenue bonds for the
             5425      purpose of providing funding for locally managed, pooled new venture and economic
             5426      development funds in accordance with the provisions of this chapter.
             5427          (e) It is declared that in order to assure adequate investment of private capital for these
             5428      uses, cooperation between private enterprise and state and local government is necessary and in
             5429      the public interest and that the facilitation of capital accumulation is the appropriate activity of
             5430      the counties and municipalities of this state and also of the Governor's Office of Economic
             5431      Development.
             5432          (f) It is found that venture capital funds historically, because of the more intensive
             5433      nature of their relationship with companies in which they invest, tend to concentrate their
             5434      investments within a relatively close geographical area to their headquarters location.
             5435          (g) It is found and declared that investors in economic development or new venture
             5436      investment funds require for the overall security of their investments reasonable diversification
             5437      of investment portfolios and that, in the course of this diversification, investments are often
             5438      syndicated or jointly made among several financial institutions or funds. It is expressly found
             5439      and declared that an economic development or new venture investment fund [must] shall from
             5440      time to time for its optimal profitability and efficiency (which are important for the security and
             5441      profit of bond purchasers providing funds therefor) cooperate with others who may be located
             5442      outside of Utah or the county or municipality where the fund is headquartered in the making of
             5443      investments and that the fund [must] shall be free in the interests of reciprocal relationships
             5444      with other financial institutions and diversification of risks to invest from time to time in
             5445      enterprises that are located outside of Utah or the counties or municipalities. It is specifically
             5446      found that such activity by a locally managed fund, funded in whole or in part with the
             5447      proceeds of bonds sold under this chapter, is within the public purposes of the state and any
             5448      county or municipality offering the bonds, provided that the fund locates within Utah or the
             5449      county or municipality its headquarters where its actual investment decisions and management
             5450      functions occur and limits the aggregate amount of its investments in companies located
             5451      outside of Utah to an amount that in the aggregate does not exceed the aggregate amount of
             5452      investments made by institutions and funds located outside of Utah in Utah companies, that the


             5453      locally managed fund has sponsored or in which it has invested and that it has brought to the
             5454      attention of investors outside of Utah.
             5455          Section 177. Section 11-17-2 is amended to read:
             5456           11-17-2. Definitions.
             5457          As used in this chapter:
             5458          (1) "Bonds" means bonds, notes, or other evidences of indebtedness.
             5459          (2) "Finance" or "financing" includes the issuing of bonds by a municipality, county, or
             5460      state university for the purpose of using a portion, or all or substantially all of the proceeds to
             5461      pay for or to reimburse the user or its designee for the costs of the acquisition of facilities of a
             5462      project, or to create funds for the project itself where appropriate, whether these costs are
             5463      incurred by the municipality, the county, the state university, the user, or a designee of the user.
             5464      If title to or in these facilities at all times remains in the user, the bonds of the municipality or
             5465      county shall be secured by a pledge of one or more notes, debentures, bonds, other secured or
             5466      unsecured debt obligations of the user, or such sinking fund or other arrangement as in the
             5467      judgment of the governing body is appropriate for the purpose of assuring repayment of the
             5468      bond obligations to investors in accordance with their terms.
             5469          (3) "Governing body" means:
             5470          (a) for a county, city, or town, the legislative body of the county, city, or town;
             5471          (b) for the military installation development authority created in Section 63H-1-201 ,
             5472      the authority board, as defined in Section 63H-1-102 ;
             5473          (c) for the University of Utah and Utah State University, the board or body having the
             5474      control and supervision of the University of Utah and Utah State University; and
             5475          (d) for a nonprofit corporation or foundation created by and operating under the
             5476      auspices of a state university, the board of directors or board of trustees of that corporation or
             5477      foundation.
             5478          (4) "Industrial park" means land, including all necessary rights, appurtenances,
             5479      easements, and franchises relating to it, acquired and developed by any municipality, county, or
             5480      state university for the establishment and location of a series of sites for plants and other
             5481      buildings for industrial, distribution, and wholesale use. There may be included as part of the
             5482      development of the land for any industrial park under this chapter the acquisition and provision
             5483      of water, sewerage, drainage, street, road, sidewalk, curb, gutter, street lighting, electrical


             5484      distribution, railroad, or docking facilities, or any combination of them, but only to the extent
             5485      that these facilities are incidental to the use of the land as an industrial park.
             5486          (5) "Mortgage" means a mortgage, trust deed, or other security device.
             5487          (6) "Municipality" means any incorporated city or town in the state, including cities or
             5488      towns operating under home rule charters.
             5489          (7) "Pollution" means any form of environmental pollution including[, but not limited
             5490      to,] water pollution, air pollution, pollution caused by solid waste disposal, thermal pollution,
             5491      radiation contamination, or noise pollution.
             5492          (8) "Project" means:
             5493          (a) any industrial park, land, interest in land, building, structure, facility, system,
             5494      fixture, improvement, appurtenance, machinery, equipment, or any combination of them,
             5495      whether or not in existence or under construction:
             5496          (i) that is suitable for industrial, manufacturing, warehousing, research, business, and
             5497      professional office building facilities, commercial, shopping services, food, lodging, low
             5498      income rental housing, recreational, or any other business purposes;
             5499          (ii) that is suitable to provide services to the general public;
             5500          (iii) that is suitable for use by any corporation, person, or entity engaged in health care
             5501      services, including hospitals, nursing homes, extended care facilities, facilities for the care of
             5502      persons with a physical or mental disability, and administrative and support facilities; or
             5503          (iv) that is suitable for use by a state university for the purpose of aiding in the
             5504      accomplishment of its authorized academic, scientific, engineering, technical, and economic
             5505      development functions, but "project" does not include any property, real, personal, or mixed,
             5506      for the purpose of the construction, reconstruction, improvement, or maintenance of a public
             5507      utility as defined in Section 54-2-1 , and except as provided in Subsection (8)(b);
             5508          (b) any land, interest in land, building, structure, facility, system, fixture, improvement,
             5509      appurtenance, machinery, equipment, or any combination of them, used by any individual,
             5510      partnership, firm, company, corporation, public utility, association, trust, estate, political
             5511      subdivision, state agency, or any other legal entity, or its legal representative, agent, or assigns,
             5512      for the reduction, abatement, or prevention of pollution, including[, but not limited to,] the
             5513      removal or treatment of any substance in process material, if that material would cause
             5514      pollution if used without the removal or treatment;


             5515          (c) facilities, machinery, or equipment, the manufacturing and financing of which will
             5516      maintain or enlarge domestic or foreign markets for Utah industrial products; or
             5517          (d) any economic development or new venture investment fund to be raised other than
             5518      from:
             5519          (i) municipal or county general fund moneys;
             5520          (ii) moneys raised under the taxing power of any county or municipality; or
             5521          (iii) moneys raised against the general credit of any county or municipality.
             5522          (9) "State university" means the University of Utah and Utah State University and
             5523      includes any nonprofit corporation or foundation created by and operating under their authority.
             5524          (10) "User" means the person, whether natural or corporate, who will occupy, operate,
             5525      maintain, and employ the facilities of, or manage and administer a project after the financing,
             5526      acquisition, or construction of it, whether as owner, manager, purchaser, lessee, or otherwise.
             5527          Section 178. Section 11-17-4 is amended to read:
             5528           11-17-4. Bonds -- Limitations -- Form and provisions -- Sale -- Negotiability.
             5529          (1) All bonds issued by a municipality or county under this chapter shall be limited
             5530      obligations of the municipality or county. Bonds and interest coupons issued under this chapter
             5531      [shall not] may not constitute nor give rise to a general obligation or liability of the
             5532      municipality or county or a charge against its general credit or taxing powers. Such limitation
             5533      shall be plainly stated upon the face of such bonds.
             5534          (2) The bonds referred to in Subsection (1) may be authorized by resolution of the
             5535      governing body, and may:
             5536          (a) be executed and delivered at any time and from time to time;
             5537          (b) be in such form and denominations;
             5538          (c) be of such tenor;
             5539          (d) be in registered or bearer form either as to principal or interest or both;
             5540          (e) be payable in such installments and at such time or times as the governing body
             5541      may deem advisable;
             5542          (f) be payable at such place or places either within or without the state of Utah;
             5543          (g) bear interest at such rate or rates, payable at such place or places, and evidenced in
             5544      such manner;
             5545          (h) be redeemable prior to maturity, with or without premium;


             5546          (i) be convertible into equity positions in any asset or assets acquired or developed with
             5547      the proceeds of the sale of the bonds; and
             5548          (j) contain such other provisions not inconsistent with this chapter as shall be deemed
             5549      for the best interests of the municipality or county and provided for in the proceedings of the
             5550      governing body under which the bonds shall be authorized to be issued.
             5551          (3) Any bonds issued under this chapter may be sold at public or private sale in such
             5552      manner and at such time or times as may be determined by the governing body to be most
             5553      advantageous. The municipality or county may pay all expenses, premiums, and commissions
             5554      which the governing body may deem necessary or advantageous in connection with the
             5555      authorization, sale, and issuance of such bonds from the proceeds of the sale of such bonds or
             5556      from the revenues of the project or projects.
             5557          (4) All bonds issued under this chapter and all interest coupons applicable thereto shall
             5558      be construed to be negotiable instruments, despite the fact that they are payable solely from a
             5559      specified source.
             5560          Section 179. Section 11-17-5 is amended to read:
             5561           11-17-5. Security for bonds -- Provisions in security agreements -- Limitations --
             5562      Liens.
             5563          (1) The principal of and interest on any bonds issued under this chapter:
             5564          (a) shall be secured by a pledge and assignment of the revenues out of which the bonds
             5565      are made payable or by such other sinking fund or security provision as shall in the judgment of
             5566      the governing body be reasonably designed to assure payment of the obligations to the
             5567      purchasers thereof; however, the bond purchasers [shall not] may not in any event have
             5568      recourse against the general funds or general credit of the governmental offeror;
             5569          (b) may be secured by a mortgage covering all or any part of the project; and
             5570          (c) may be secured by any other security device deemed most advantageous by the
             5571      governing body issuing the bonds.
             5572          (2) The proceedings under which the bonds are authorized to be issued under this
             5573      chapter and any mortgage given to secure them may contain any agreements and provisions
             5574      customarily contained in instruments securing bonds, including, without limiting the generality
             5575      of the foregoing, provisions respecting:
             5576          (a) the fixing and collection of revenues for any project covered by the proceedings or


             5577      mortgage;
             5578          (b) the terms to be incorporated in the lease, installment purchase agreement, rental
             5579      agreement, mortgage, trust indenture, loan agreement, financing agreement, or other agreement
             5580      for the project;
             5581          (c) the maintenance and insurance of the project;
             5582          (d) the creation and maintenance of special funds from the revenues of projects; and
             5583          (e) the rights and remedies available in the event of a default to the bondholders or to
             5584      the trustee under a mortgage, all as the governing body deems advisable and which is not in
             5585      conflict with this chapter, except that in making any agreements or provisions a municipality or
             5586      county may not obligate itself except with respect to the project and the application of the
             5587      revenues from it and may not incur a general obligation or liability or a charge upon its general
             5588      credit or against its taxing powers.
             5589          (3) The proceedings authorizing any bonds under this chapter and any mortgage
             5590      securing bonds may provide that, in the event of a default in the payment of the principal of or
             5591      the interest on the bonds or in the performance of any agreement contained in the proceedings
             5592      or mortgage, payment and performance may be enforced by the appointment of a receiver with
             5593      power to charge and collect the revenues from the project and to apply the revenues from the
             5594      project in accordance with the proceedings or the provisions of the mortgage.
             5595          (4) Any mortgage made under this chapter to secure bonds issued under it may also
             5596      provide that, in the event of a default in payment or the violation of any agreement contained in
             5597      the mortgage, the mortgage may be foreclosed or otherwise realized on in any manner
             5598      permitted by law. The mortgage may also provide that any trustee under the mortgage or the
             5599      holder of any of the bonds secured by the mortgage may become the purchaser at any
             5600      foreclosure sale if the highest bidder. No breach of any agreement imposes any general
             5601      obligation or liability upon a municipality or county or any charge upon their general credit or
             5602      against their taxing powers.
             5603          (5) The revenues pledged and received are immediately subject to the lien of the pledge
             5604      without any physical delivery of any lease, purchase agreement, financing agreement, loan
             5605      agreement, note, debenture, bond, or other obligation under which the revenues are payable, or
             5606      any other act, except that the proceedings or agreement by which the pledge is created shall be
             5607      recorded in the records of the municipality, county, or state university. The proceedings or


             5608      agreement by which the pledge is created, or a financing statement, need not be filed or
             5609      recorded under the Uniform Commercial Code, or otherwise, except in the records of the
             5610      municipality, county, or state university as provided in this Subsection (5). The lien of any
             5611      pledge is valid and binding and has priority as against all parties having claims of any kind in
             5612      tort, contract, or otherwise against the municipality, county, or state university, irrespective of
             5613      whether the parties have notice of the lien. Each pledge and agreement made for the benefit or
             5614      security of any of the revenue bonds issued under this chapter shall continue effective until the
             5615      principal, interest, and premium, if any, on the revenue bonds have been fully paid or provision
             5616      for payment has been made.
             5617          Section 180. Section 11-17-7 is amended to read:
             5618           11-17-7. Disposition of proceeds of bonds.
             5619          The proceeds from the sale of any bonds issued under this act shall be applied only for
             5620      the purposes for which the bonds were issued; but any accrued interest and premium received
             5621      upon any such sale shall be applied to the payment of the principal of or the interest on the
             5622      bonds sold, and if for any reason any portion of such proceeds [shall not be] are not needed for
             5623      the purposes for which the bonds were issued, then such unneeded portion of such proceeds
             5624      shall be applied to the payment of the principal of or the interest on such bonds or in
             5625      accordance with such other plan or device for the furtherance of the project and the protection
             5626      of the bondholder as the governing body shall deem appropriate under the circumstances.
             5627          Section 181. Section 11-17-10 is amended to read:
             5628           11-17-10. Tax exemption for property and bonds -- Exception.
             5629          All property acquired or held by the county or municipality under this chapter is
             5630      declared to be public property used for essential public and governmental purposes; and all
             5631      such property and bonds issued under this chapter and the income from them are exempt from
             5632      all taxes imposed by the state, any county, any municipality, or any other political subdivision
             5633      of the state, except for the corporate franchise tax. This exemption [shall not] does not extend
             5634      to the interests of any private person, firm, association, partnership, corporation, or other
             5635      private business entity in such property or in any other property such business entity may place
             5636      upon or use in connection with any project, all of which shall be subject to the provisions of
             5637      Section 59-4-101 and all other applicable laws nor to any income of such private business
             5638      entity, which, except as provided in this section for such bonds and the income from them,


             5639      shall be subject to all applicable laws, regarding the taxing of such income.
             5640          Section 182. Section 11-25-9 is amended to read:
             5641           11-25-9. Bonds payable solely from revenues -- Cities, towns, and counties not
             5642      obligated.
             5643          Revenues shall be the sole source of funds pledged by the agency for repayment of its
             5644      bonds. Bonds issued under the provisions of this part [shall not] may not be deemed to
             5645      constitute a debt or liability of the agency or a pledge of the faith and credit of the agency but
             5646      shall be payable solely from revenues. The issuance of bonds [shall not] may not directly,
             5647      indirectly, or contingently obligate a city, town or county, or a city or town and county which
             5648      has designated its governing body as an agency to levy or pledge any form of taxation or to
             5649      make any appropriation for payment of bonds issued by an agency.
             5650          Section 183. Section 11-25-11 is amended to read:
             5651           11-25-11. Comprehensive financing program ordinance -- Contents.
             5652          Prior to the issuance of any bonds or bond anticipation notes of the agency for
             5653      residential rehabilitation, the agency shall by ordinance adopt a comprehensive residential
             5654      rehabilitation financing program, including:
             5655          (1) Criteria for selection of residential rehabilitation areas by the agency including
             5656      findings by the agency that:
             5657          (a) There are a substantial number of deteriorating structures in the area which do not
             5658      conform to community standards for decent, safe, sanitary housing.
             5659          (b) Financial assistance from the agency for residential rehabilitation is necessary to
             5660      arrest the deterioration of the area.
             5661          (c) Financing of residential rehabilitation in the area is economically feasible. These
             5662      findings are not required, however, when the residential rehabilitation area is located within the
             5663      boundaries of a project area covered by an urban renewal project area plan adopted in
             5664      accordance with Section 17C-2-107 .
             5665          (2) Procedures for selection of residential rehabilitation areas by the agency including:
             5666          (a) Provisions for citizen participation in selection of residential rehabilitation areas.
             5667          (b) Provisions for a public hearing by the agency prior to selection of any particular
             5668      residential rehabilitation area.
             5669          (3) A commitment that rehabilitation standards will be enforced on each residence for


             5670      which financing is provided.
             5671          (4) Guidelines for financing residential rehabilitation which shall be subject to the
             5672      following limitations:
             5673          (a) Outstanding loans on the property to be rehabilitated including the amount of the
             5674      loans for rehabilitation, [shall not] may not exceed 80% of the anticipated after-rehabilitation
             5675      value of the property to be rehabilitated, except that the agency may authorize loans of up to
             5676      95% of the anticipated after-rehabilitation value of the property if loans are made for the
             5677      purpose of rehabilitating the property for residential purposes, there is demonstrated need for
             5678      such higher limit, and there is a high probability that the value of the property will not be
             5679      impaired during the term of the loan.
             5680          (b) The maximum repayment period for residential rehabilitation loans shall be 20
             5681      years or 3/4 of the economic life of the property, whichever is less.
             5682          (c) The maximum amount loan for rehabilitation for each dwelling unit and for each
             5683      commercial unit which is, or is part of a "residence" as defined in this chapter, shall be
             5684      established by resolution of the agency.
             5685          Section 184. Section 11-27-5 is amended to read:
             5686           11-27-5. Negotiability of bonds -- Intent and construction of chapter -- Budget for
             5687      payment of bonds -- Proceedings limited to those required by chapter -- No election
             5688      required -- Application of chapter.
             5689          (1) Refunding bonds shall have all the qualities of negotiable paper, shall be
             5690      incontestable in the hands of bona fide purchasers or holders for value, and [shall not be] are
             5691      not invalid for any irregularity or defect in the proceedings for their issuance and sale. This
             5692      chapter is intended to afford an alternative method for the issuance of refunding bonds by
             5693      public bodies and [shall not] may not be [so] construed [as] to deprive any public body of the
             5694      right to issue bonds for refunding purposes under authority of any other statute, but this
             5695      chapter, nevertheless, shall constitute full authority for the issue and sale of refunding bonds by
             5696      public bodies. Section 11-1-1 , however, [shall not be] is not applicable to refunding bonds.
             5697          (2) Any public body subject to any budget law shall in its annual budget make proper
             5698      provision for the payment of principal and interest currently falling due on refunding bonds,
             5699      but no provision need be made in the budget prior to the issuance of the refunding bonds for
             5700      their issuance or for the expenditure of the proceeds from them.


             5701          (3) (a) No ordinance, resolution, or proceeding concerning the issuance of refunding
             5702      bonds nor the publication of any resolution, proceeding, or notice relating to the issuance of the
             5703      refunding bonds shall be necessary except as specifically required by this chapter.
             5704          (b) A publication made under this chapter may be made:
             5705          (i) in any newspaper in which legal notices may be published under the laws of Utah,
             5706      without regard to its designation as the official journal or newspaper of the public body; and
             5707          (ii) as required in Section 45-1-101 .
             5708          (4) No resolution adopted or proceeding taken under this chapter shall be subject to any
             5709      referendum petition or to an election other than as required by this chapter. All proceedings
             5710      adopted under this chapter may be adopted on a single reading at any legally-convened meeting
             5711      of the governing body. This chapter shall apply to all bonds issued and outstanding at the time
             5712      this chapter takes effect as well as to bonds issued after this chapter takes effect.
             5713          Section 185. Section 11-30-2 is amended to read:
             5714           11-30-2. Definitions.
             5715          As used in this chapter:
             5716          (1) "Attorney general" means the attorney general of the state or one of his assistants.
             5717          (2) "Bonds" means any evidence or contract of indebtedness that is issued or
             5718      authorized by a public body, including, without limitation, bonds, refunding bonds, advance
             5719      refunding bonds, bond anticipation notes, tax anticipation notes, notes, certificates of
             5720      indebtedness, warrants, commercial paper, contracts, and leases, whether they are general
             5721      obligations of the issuing public body or are payable solely from a specified source, including[,
             5722      but not limited to,] annual appropriations by the public body.
             5723          (3) "County attorney" means the county attorney of a county or one of his assistants.
             5724          (4) "Lease" means any lease agreement, lease purchase agreement, and installment
             5725      purchase agreement, and any certificate of interest or participation in any of the foregoing.
             5726      Reference in this chapter to issuance of bonds includes execution and delivery of leases.
             5727          (5) "Person" means any person, association, corporation, or other entity.
             5728          (6) "Public body" means the state or any agency, authority, instrumentality, or
             5729      institution of the state, or any county, municipality, quasi-municipal corporation, school
             5730      district, local district, special service district, political subdivision, or other governmental entity
             5731      existing under the laws of the state, whether or not possessed of any taxing power. With


             5732      respect to leases, public body, as used in this chapter, refers to the public body which is the
             5733      lessee, or is otherwise the obligor with respect to payment under any such leases.
             5734          (7) "Refunding bonds" means any bonds that are issued to refund outstanding bonds,
             5735      including both refunding bonds and advance refunding bonds.
             5736          (8) "State" means the state of Utah.
             5737          (9) "Validity" means any matter relating to the legality and validity of the bonds and
             5738      the security therefor, including, without limitation, the legality and validity of:
             5739          (a) a public body's authority to issue and deliver the bonds;
             5740          (b) any ordinance, resolution, or statute granting the public body authority to issue and
             5741      deliver the bonds;
             5742          (c) all proceedings, elections, if any, and any other actions taken or to be taken in
             5743      connection with the issuance, sale, or delivery of the bonds;
             5744          (d) the purpose, location, or manner of the expenditure of funds;
             5745          (e) the organization or boundaries of the public body;
             5746          (f) any assessments, taxes, rates, rentals, fees, charges, or tolls levied or that may be
             5747      levied in connection with the bonds;
             5748          (g) any lien, proceeding, or other remedy for the collection of those assessments, taxes,
             5749      rates, rentals, fees, charges, or tolls;
             5750          (h) any contract or lease executed or to be executed in connection with the bonds;
             5751          (i) the pledge of any taxes, revenues, receipts, rentals, or property, or encumbrance
             5752      thereon or security interest therein to secure the bonds; and
             5753          (j) any covenants or provisions contained in or to be contained in the bonds. If any
             5754      deed, will, statute, resolution, ordinance, lease, indenture, contract, franchise, or other
             5755      instrument may have an effect on any of the aforementioned, validity also means a declaration
             5756      of the validity and legality thereof and of rights, status, or other legal relations arising
             5757      therefrom.
             5758          Section 186. Section 11-31-2 is amended to read:
             5759           11-31-2. Definitions.
             5760          As used in this chapter:
             5761          (1) "Bonds" means any evidence or contract of indebtedness that is issued or
             5762      authorized by a public body, including, without limitation, bonds, refunding bonds, advance


             5763      refunding bonds, bond anticipation notes, tax anticipation notes, notes, certificates of
             5764      indebtedness, warrants, commercial paper, contracts, and leases, whether they are general
             5765      obligations of the issuing public body or are payable solely from a specified source, including[,
             5766      but not limited to,] annual appropriations by the public body.
             5767          (2) "Legislative body" means, with respect to any action to be taken by a public body
             5768      with respect to bonds, the board, commission, council, agency, or other similar body authorized
             5769      by law to take legislative action on behalf of the public body, and in the case of the state, the
             5770      Legislature, the state treasurer, the commission created under Section 63B-1-201 , and any other
             5771      entities the Legislature designates.
             5772          (3) "Public body" means the state and any public department, public agency, or other
             5773      public entity existing under the laws of the state, including, without limitation, any agency,
             5774      authority, instrumentality, or institution of the state, and any county, city, town, municipal
             5775      corporation, quasi-municipal corporation, state university or college, school district, special
             5776      service district, local district, separate legal or administrative entity created under the Interlocal
             5777      Cooperation Act or other joint agreement entity, community development and renewal agency,
             5778      and any other political subdivision, public authority, public agency, or public trust existing
             5779      under the laws of the state.
             5780          Section 187. Section 11-32-7 is amended to read:
             5781           11-32-7. Bond principal and interest -- Security agreements -- Trustee.
             5782          (1) The principal of and interest on any bonds issued under this chapter:
             5783          (a) shall be secured by a pledge and assignment of the revenues received by the
             5784      financing authority under the assignment agreement with respect to the delinquent tax
             5785      receivables purchased with the proceeds of the sale of these bonds;
             5786          (b) may be secured by a pledge and security interest in the assignment agreement; and
             5787          (c) may be secured by amounts held in reserve funds, letters of credit, bond insurance,
             5788      surety bonds, or by such other security devices with respect to the delinquent tax receivables
             5789      deemed most advantageous by the authority.
             5790          (2) The proceedings under which the bonds are authorized to be issued under this
             5791      chapter and any security agreement given to secure the bonds may contain any agreements and
             5792      provisions customarily contained in instruments securing bonds, including[, but not limited to,]
             5793      provisions respecting:


             5794          (a) the collection of the delinquent taxes covered by these proceedings or any security
             5795      agreement;
             5796          (b) the terms to be incorporated in the assignment agreement with respect to the
             5797      delinquent tax receivables;
             5798          (c) the creation and maintenance of reserve funds from the proceeds of sale of bonds or
             5799      from the collection of the delinquent taxes;
             5800          (d) the rights and remedies available to the holders of bonds or to the trustee in the
             5801      event of a default, as the board of trustees of the authority may determine in accordance with
             5802      this chapter.
             5803          (3) The security agreements, trust indentures, or other security devices shall provide
             5804      that following the exhaustion of all legal means of collection of the delinquent tax receivables
             5805      no judgment may be entered against the authority or the county or any participant members or
             5806      the state of Utah or any of its political subdivisions.
             5807          (4) The proceedings authorizing bonds under this chapter, and any security agreement
             5808      securing these bonds, may provide that upon default in the payment of the principal of or
             5809      interest on the bonds or in the performance of any covenant or agreement contained in the
             5810      proceedings or security agreement, the payment or performance may be enforced by the
             5811      appointment of a receiver for the delinquent tax receivables with power to compel the county to
             5812      use the statutory means it has to collect the delinquent tax receivables and apply the revenues in
             5813      accordance with these proceedings or the security agreement.
             5814          (5) No breach of a security agreement, covenant, or other agreement may impose any
             5815      general obligation or liability upon, nor a charge against, the county or any participant member,
             5816      nor the general credit or taxing power of this state or any of its political subdivisions.
             5817          (6) The proceedings authorizing the issuance of bonds may provide for the
             5818      appointment of a trustee, which may be a trust company or bank having trust powers located in
             5819      or outside of this state.
             5820          Section 188. Section 11-34-1 is amended to read:
             5821           11-34-1. Definitions.
             5822          As used in this chapter:
             5823          (1) "Bonds" means any evidence or contract of indebtedness that is issued or
             5824      authorized by a public body, including, without limitation, bonds, refunding bonds, advance


             5825      refunding bonds, bond anticipation notes, tax anticipation notes, notes, certificates of
             5826      indebtedness, warrants, commercial paper, contracts, and leases, whether they are general
             5827      obligations of the issuing public body or are payable solely from a specified source, including[,
             5828      but not limited to,] annual appropriations by the public body.
             5829          (2) "Public body" means the state and any public department, public agency, or other
             5830      public entity existing under the laws of the state, including, without limitation, any agency,
             5831      authority, instrumentality, or institution of the state, and any county, city, town, municipal
             5832      corporation, quasi-municipal corporation, state university or college, school district, special
             5833      service district, local district, separate legal or administrative entity created under the Interlocal
             5834      Cooperation Act or other joint agreement entity, community development and renewal agency,
             5835      and any other political subdivision, public authority, public agency, or public trust existing
             5836      under the laws of this state.
             5837          Section 189. Section 11-34-2 is amended to read:
             5838           11-34-2. Bonds issued in foreign denominations -- Required conditions and
             5839      agreements.
             5840          Any bonds issued by a public body may be denominated in a foreign currency, but only
             5841      if, at the time of the issuance of the bonds, the public body which issues them enters into one or
             5842      more foreign exchange agreements, forward exchange agreements, foreign currency exchange
             5843      agreements, or other similar agreements with a bank or other financial institution, foreign or
             5844      domestic, the senior unsecured long-term debt obligations of which are rated in one of the
             5845      highest two rating categories by Moody's Investors Service, Inc. or Standard & Poor's
             5846      Corporation or another similar nationally recognized securities rating agency, to protect the
             5847      public body against the risk of a decline in the value of the United States dollar in relation to
             5848      the foreign currency in which the bonds are denominated. Such agreements [must protect]
             5849      shall contain a provision that protects against [such] the risk of a decline in the value of the
             5850      United States dollar with respect to the interest on the bonds and the principal of the bonds to
             5851      the maturity or redemption thereof. The costs of such agreements, including without limitation
             5852      periodic fees and other amounts due to the other party or parties to such agreements, may be
             5853      paid by the public body from the proceeds of the bonds and other revenues of the public body.
             5854          Section 190. Section 11-36-401 is amended to read:
             5855           11-36-401. Impact fees -- Challenges -- Appeals.


             5856          (1) Any person or entity residing in or owning property within a service area, and any
             5857      organization, association, or corporation representing the interests of persons or entities owning
             5858      property within a service area, may file a declaratory judgment action challenging the validity
             5859      of the fee.
             5860          (2) (a) Any person or entity required to pay an impact fee who believes the fee does not
             5861      meet the requirements of law may file a written request for information with the local political
             5862      subdivision who established the fee.
             5863          (b) Within two weeks after the receipt of the request for information, the local political
             5864      subdivision shall provide the person or entity with the written analysis required by Section
             5865      11-36-201 , the capital facilities plan, and with any other relevant information relating to the
             5866      impact fee.
             5867          (3) (a) Any local political subdivision may establish, by ordinance or resolution, an
             5868      administrative appeals procedure to consider and decide challenges to impact fees.
             5869          (b) If the local political subdivision establishes an administrative appeals procedure,
             5870      the local political subdivision shall ensure that the procedure includes a requirement that the
             5871      local political subdivision make its decision no later than 30 days after the date the challenge to
             5872      the impact fee is filed.
             5873          (4) (a) In addition to the method of challenging an impact fee under Subsection (1), a
             5874      person or entity that has paid an impact fee that was imposed by a local political subdivision
             5875      may challenge:
             5876          (i) if the impact fee enactment was adopted on or after July 1, 2000:
             5877          (A) whether the local political subdivision complied with the notice requirements of
             5878      this chapter with respect to the imposition of the impact fee; and
             5879          (B) whether the local political subdivision complied with other procedural
             5880      requirements of this chapter for imposing the impact fee; and
             5881          (ii) except as limited by Subsection (4)(a)(i), the impact fee.
             5882          (b) A challenge under Subsection (4)(a) may not be initiated unless it is initiated
             5883      within:
             5884          (i) for a challenge under Subsection (4)(a)(i)(A), 30 days after the person or entity pays
             5885      the impact fee;
             5886          (ii) for a challenge under Subsection (4)(a)(i)(B), 180 days after the person or entity


             5887      pays the impact fee; or
             5888          (iii) for a challenge under Subsection (4)(a)(ii), one year after the person or entity pays
             5889      the impact fee.
             5890          (c) A challenge under Subsection (4)(a) is initiated by filing:
             5891          (i) if the local political subdivision has established an administrative appeals procedure
             5892      under Subsection (3), the necessary document, under the administrative appeals procedure, for
             5893      initiating the administrative appeal;
             5894          (ii) a request for arbitration as provided in Subsection 11-36-402 (1); or
             5895          (iii) an action in district court.
             5896          (d) (i) The sole remedy for a challenge under Subsection (4)(a)(i)(A) is the equitable
             5897      remedy of requiring the local political subdivision to correct the defective notice and repeat the
             5898      process.
             5899          (ii) The sole remedy for a challenge under Subsection (4)(a)(i)(B) is the equitable
             5900      remedy of requiring the local political subdivision to correct the defective process.
             5901          (iii) The sole remedy for a challenge under Subsection (4)(a)(ii) is a refund of the
             5902      difference between what the person or entity paid as an impact fee and the [amount the impact
             5903      fee should have been if it had been correctly calculated] correct impact fee amount.
             5904          (e) Nothing in this Subsection (4) may be construed as requiring a person or entity to
             5905      exhaust administrative remedies with the local political subdivision before filing an action in
             5906      district court under this Subsection (4).
             5907          (f) The protections given to a municipality under Section 10-9a-801 and to a county
             5908      under Section 17-27a-801 do not apply in a challenge under Subsection (4)(a)(i)(A).
             5909          (5) The judge may award reasonable attorneys' fees and costs to the prevailing party in
             5910      any action brought under this section.
             5911          (6) Nothing in this chapter may be construed as restricting or limiting any rights to
             5912      challenge impact fees that were paid before the effective date of this chapter.
             5913          Section 191. Section 13-1-1 is amended to read:
             5914           13-1-1. Legislative findings and declarations.
             5915          The Legislature finds that many businesses and occupations in the state have a
             5916      pronounced physical and economic impact on the health, safety, and welfare of the citizens of
             5917      the state. The Legislature further finds that while the overall impact is generally beneficial to


             5918      the public, the potential for harm and injury frequently warrants intervention by state
             5919      government.
             5920          The Legislature declares that it is appropriate and necessary for state government to
             5921      protect its citizens from harmful and injurious acts by persons offering or providing essential or
             5922      necessary goods and services to the general public. The Legislature further declares that
             5923      business regulation should not be unfairly discriminatory. However, the general public interest
             5924      [must] shall be recognized and regarded as the primary purpose of all regulation by state
             5925      government.
             5926          Section 192. Section 13-1a-6 is amended to read:
             5927           13-1a-6. Powers of Division of Corporations and Commercial Code -- Document
             5928      retention.
             5929          (1) The Division of Corporations and Commercial Code shall have the power and
             5930      authority reasonably necessary to enable it to efficiently administer the laws and rules for
             5931      which it is responsible and to perform the duties imposed upon it by law.
             5932          (2) The division has authority under Title 63G, Chapter 3, Utah Administrative
             5933      Rulemaking Act, to make rules and procedures for the processing, retention, and disposal of
             5934      filed documents to efficiently utilize electronic and computerized document image storage and
             5935      retrieval.
             5936          (3) Notwithstanding the provisions of Section 63A-12-105 , original documents filed in
             5937      the division offices [shall not] may not be considered property of the state if electronic image
             5938      reproductions thereof which comply with the provisions of Title 63G, Chapter 2, Government
             5939      Records Access and Management Act, are retained by the division.
             5940          Section 193. Section 13-2-6 is amended to read:
             5941           13-2-6. Enforcement powers.
             5942          (1) In accordance with Title 63G, Chapter 4, Administrative Procedures Act, the
             5943      division shall have authority to convene administrative hearings, issue cease and desist orders,
             5944      and impose fines under all the chapters identified in Section 13-2-1 .
             5945          (2) Any person who intentionally violates a final cease and desist order entered by the
             5946      division of which the person has notice is guilty of a third degree felony.
             5947          (3) If the division has reasonable cause to believe that any person is engaged in
             5948      violating any chapter listed in Section 13-2-1 , the division may promptly issue the alleged


             5949      violator a citation signed by the division's director or the director's designee.
             5950          (a) Each citation shall be in writing and shall:
             5951          (i) set forth with particularity the nature of the violation, including a reference to the
             5952      statutory or administrative rule provision being violated;
             5953          (ii) state that any request for review of the citation [must] shall be made in writing and
             5954      be received by the division no more than 10 days following issuance;
             5955          (iii) state the consequences of failing to make a timely request for review; and
             5956          (iv) state all other information required by Subsection 63G-4-201 (2).
             5957          (b) In computing any time period prescribed by this section, the following days may
             5958      not be included:
             5959          (i) the day a citation is issued by the division;
             5960          (ii) the day the division received a request for review of a citation;
             5961          (iii) Saturdays and Sundays; and
             5962          (iv) a legal holiday set forth in Subsection 63G-1-301 (1)(a).
             5963          (c) If the recipient of a citation makes a timely request for review, within 10 days of
             5964      receiving the request, the division shall convene an adjudicative proceeding in accordance with
             5965      Title 63G, Chapter 4, Administrative Procedures Act.
             5966          (d) (i) If the presiding officer finds that there is not substantial evidence that the
             5967      recipient violated a chapter listed in Section 13-2-1 at the time the citation was issued, the
             5968      citation may not become final, and the division shall immediately vacate the citation and
             5969      promptly notify the recipient in writing.
             5970          (ii) If the presiding officer finds there is substantial evidence that the recipient violated
             5971      a chapter listed in Section 13-2-1 at the time the citation was issued, the citation shall become
             5972      final and the division may enter a cease and desist order against the recipient.
             5973          (e) A citation issued under this chapter may be personally served upon any person upon
             5974      whom a summons may be served in accordance with the Utah Rules of Civil Procedure. A
             5975      citation also may be served by first-class mail, postage prepaid.
             5976          (f) If the recipient fails to make a timely request for review, the citation shall become
             5977      the final order of the division. The period to contest the citation may be extended by the
             5978      director for good cause shown.
             5979          (g) If the chapter violated allows for an administrative fine, after a citation becomes


             5980      final, the director may impose the administrative fine.
             5981          (4) (a) A person violating a chapter identified in Section 13-2-1 is subject to the
             5982      division's jurisdiction if:
             5983          (i) the violation or attempted violation is committed either wholly or partly within the
             5984      state;
             5985          (ii) conduct committed outside the state constitutes an attempt to commit a violation
             5986      within the state; or
             5987          (iii) transactional resources located within the state are used by the offender to directly
             5988      or indirectly facilitate a violation or attempted violation.
             5989          (b) As used in this section, "transactional resources" means:
             5990          (i) any mail drop or mail box, whether or not located on the premises of a United States
             5991      Post Office;
             5992          (ii) any telephone or facsimile transmission device;
             5993          (iii) any internet connection by a resident or inhabitant of this state with either a
             5994      resident or nonresident maintained internet site;
             5995          (iv) any business office or private residence used for a business-related purpose;
             5996          (v) any account with or services of a financial institution;
             5997          (vi) the services of a common or private carrier; or
             5998          (vii) the use of any city, county, or state asset or facility, including any road or
             5999      highway.
             6000          (5) The director or the director's designee, for the purposes outlined in any chapter
             6001      administered by the division, may administer oaths, issue subpoenas, compel the attendance of
             6002      witnesses, and compel the production of papers, books, accounts, documents, and evidence.
             6003          Section 194. Section 13-5-3 is amended to read:
             6004           13-5-3. Unlawful discriminations -- Burden of proof -- Taking or offering
             6005      commissions -- Payments for benefit of customers -- Discrimination among purchasers --
             6006      Inducing discriminations.
             6007          (1) (a) It is unlawful for any person engaged in commerce, in the course of such
             6008      commerce, either directly or indirectly, to discriminate in price between different purchasers of
             6009      commodities of like grade and quality, where either or any of the purchasers involved in such
             6010      discrimination are in commerce, where such commodities are sold for use, consumption, or


             6011      resale within the state and where the effect of such discrimination may be substantially to
             6012      lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy,
             6013      or prevent competition with any person who either grants or knowingly receives the benefit of
             6014      such discrimination, or with customers of either of them.
             6015          (b) Nothing in this chapter [shall prevent] prevents:
             6016          (i) differentials which make only due allowance for differences in the cost of
             6017      manufacture, sale, or delivery resulting from the different methods or quantities in which such
             6018      commodities are to such purchasers sold or delivered;
             6019          (ii) persons engaged in selling goods, wares, or merchandise in commerce from
             6020      selecting their own customers in bona fide transactions and not in restraint of trade; and
             6021          (iii) price changes from time to time in response to changing conditions affecting the
             6022      market for or the marketability of the goods concerned, [such as, but not limited to,] including
             6023      actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress
             6024      sales under court process, or sales in good faith in discontinuance of business in the goods
             6025      concerned.
             6026          (2) Upon proof being made, at any suit on a complaint under this section, that there has
             6027      been discrimination in price or services or facilities furnished or in payment for services or
             6028      facilities to be rendered, the burden of rebutting the prima-facie case thus made by showing
             6029      justification shall be upon the person charged with a violation of this section. However nothing
             6030      in this chapter shall prevent a seller rebutting the prima-facie case thus made by showing that
             6031      his lower price or the furnishing of services or facilities to any purchaser or purchasers was
             6032      made in good faith to meet an equally low price of a competitor, or the services or facilities
             6033      furnished by a competitor.
             6034          (3) It is unlawful for any person engaged in commerce in the course of such commerce,
             6035      to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other
             6036      compensation, or any allowance or discount in lieu thereof, except for and not exceeding the
             6037      actual cost of such services rendered in connection with the sale or purchase of goods, wares,
             6038      or merchandise.
             6039          (4) It is unlawful for any person engaged in commerce to pay or contract for the
             6040      payment of anything of value to or for the benefit of a customer of such person in the course of
             6041      such commerce as compensation or in consideration for any services or facilities furnished by


             6042      or through such customer in connection with the processing, handling, sale, or offering for sale
             6043      of any products, or commodities manufactured, sold, or offered for sale by such person, unless
             6044      such payment or consideration is available on proportionally equal terms to all other customers
             6045      competing in the distribution of such products or commodities.
             6046          (5) It is unlawful for any person to discriminate in favor of one purchaser against
             6047      another purchaser or purchasers of a commodity bought for resale with or without processing,
             6048      by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or
             6049      facilities connected with the processing, handling, sale, or offering for sale of such commodity
             6050      so purchased upon terms not accorded to all purchasers on proportionally equal terms.
             6051          (6) It is unlawful for any person engaged in commerce, in the course of such
             6052      commerce, knowingly to induce or receive a discrimination in price which is prohibited by this
             6053      section.
             6054          Section 195. Section 13-5-12 is amended to read:
             6055           13-5-12. Sales exempt from chapter.
             6056          (1) The provisions of this chapter [shall not] do not apply to any sale made:
             6057          (a) in closing out in good faith the owner's stock or any part thereof for the purpose of
             6058      discontinuing his trade in any such stock or commodity, and in the case of the sale of seasonal
             6059      goods, or to the bona fide sale of perishable goods to prevent loss to the vendor by spoilage or
             6060      depreciation; provided, prior notice is given to the public thereof;
             6061          (b) when the goods are damaged or deteriorated in quality, and prior notice is given to
             6062      the public thereof;
             6063          (c) by an officer acting under the orders of any court;
             6064          (d) in an endeavor made in good faith to meet the legal prices of a competitor as herein
             6065      defined selling the same article, product or commodity in the same locality or trade area;
             6066          (e) by manufacturers, producers, brokers or wholesale distributors meeting in good
             6067      faith prices established by interstate competition regardless of cost; provided, such prices are
             6068      available to all persons buying on like terms and conditions in the same locality and vicinity.
             6069          (2) Any person, who performs work upon, renovates, alters or improves any personal
             6070      property belonging to another person, except necessary repairs due to damage in transit, shall
             6071      be construed to be a vendor within the meaning of this chapter.
             6072          Section 196. Section 13-5-16 is amended to read:


             6073           13-5-16. Separability clause.
             6074          If any section, sentence, clause or phrase of this act is for any reason held to be
             6075      unconstitutional, such decision [shall not] does not affect the validity of the remaining portions
             6076      of the act. The Legislature hereby declares that it would have passed this act, and each section,
             6077      sentence, clause or phrase thereof, irrespective of the fact that any one or more other sections,
             6078      sentences, clauses or phrases be declared unconstitutional.
             6079          Section 197. Section 13-7-1 is amended to read:
             6080           13-7-1. Policy and purposes of act.
             6081          It is hereby declared that the practice of discrimination on the basis of race, color, sex,
             6082      religion, ancestry, or national origin in business establishments or places of public
             6083      accommodation or in enterprises regulated by the state endangers the health, safety, and general
             6084      welfare of this state and its inhabitants; and that such discrimination in business establishments
             6085      or places of public accommodation or in enterprises regulated by the state, violates the public
             6086      policy of this state. It is the purpose of this act to assure all citizens full and equal availability
             6087      of all goods, services and facilities offered by business establishments and places of public
             6088      accommodation and enterprises regulated by the state without discrimination because of race,
             6089      color, sex, religion, ancestry, or national origin. The rules of common law that statutes in
             6090      derogation thereof shall be strictly construed has no application to this act. This act shall be
             6091      liberally construed with a view to promote the policy and purposes of the act and to promote
             6092      justice. The remedies provided herein [shall not be] are not exclusive but [shall be] are in
             6093      addition to any other remedies available at law or equity.
             6094          Section 198. Section 13-7-2 is amended to read:
             6095           13-7-2. Definitions.
             6096          (1) The term "place of public accommodation" includes every place, establishment, or
             6097      facility of whatever kind, nature, or class that caters or offers its services, facilities, or goods to
             6098      the general public for a fee or charge, except, any establishment located within a building
             6099      which contains not more than five rooms for rent or hire and which is actually occupied by the
             6100      proprietor of such establishment as his residence; provided that any place, establishment, or
             6101      facility that caters or offers its services, facilities, or goods to the general public gratuitously
             6102      shall be within the definition of this term if it receives any substantial governmental subsidy or
             6103      support; but the term [shall not] does not apply to any institution, church, any apartment house,


             6104      club, or place of accommodation which is in its nature distinctly private except to the extent
             6105      that it is open to the public.
             6106          (2) The term "person" includes one or more individuals, partnerships, associations,
             6107      organizations, corporations, labor unions, legal representatives, trustees, trustees in bankruptcy,
             6108      receivers, and other organized groups of persons.
             6109          (3) "Enterprises regulated by the state" means:
             6110          (a) all institutions subject to regulation under Title 70C, Utah Consumer Credit Code;
             6111          (b) all places of business which sell beer to consumers or house a state liquor store, as
             6112      permitted by Title 32A, Alcoholic Beverage Control Act;
             6113          (c) all insurers regulated by Title 31A, Insurance Code; and
             6114          (d) all public utilities subject to regulation under Title 54, Public Utilities Act.
             6115          Section 199. Section 13-11-6 is amended to read:
             6116           13-11-6. Service of process.
             6117          In addition to any other method provided by rule or statute, personal jurisdiction over a
             6118      supplier may be acquired in a civil action or proceeding instituted in the district court by the
             6119      service of process in the following manner. If a supplier engages in any act or practice in this
             6120      state governed by this act, or engages in a consumer transaction subject to this act, he may
             6121      designate an agent upon whom service of process may be made in this state. The agent [must]
             6122      shall be a resident of or a corporation authorized to do business in this state. The designation
             6123      [must] shall be in writing and filed with the Division of Corporations and Commercial Code.
             6124      If no designation is made and filed, or if process cannot be served in this state upon the
             6125      designated agent, whether or not the supplier is a resident of this state or is authorized to do
             6126      business in this state, process may be served upon the director of the Division of Corporations
             6127      and Commercial Code, but service upon him is not effective unless the plaintiff promptly mails
             6128      a copy of the process and pleadings by registered or certified mail to the defendant at his last
             6129      reasonably ascertainable address. An affidavit of compliance with this section [must] shall be
             6130      filed with the clerk of the court on or before the return day of the process, if any, or within any
             6131      future time the court allows.
             6132          Section 200. Section 13-11-19 is amended to read:
             6133           13-11-19. Actions by consumer.
             6134          (1) Whether he seeks or is entitled to damages or otherwise has an adequate remedy at


             6135      law, a consumer may bring an action to:
             6136          (a) obtain a declaratory judgment that an act or practice violates this chapter; and
             6137          (b) enjoin, in accordance with the principles of equity, a supplier who has violated, is
             6138      violating, or is likely to violate this chapter.
             6139          (2) A consumer who suffers loss as a result of a violation of this chapter may recover,
             6140      but not in a class action, actual damages or $2,000, whichever is greater, plus court costs.
             6141          (3) Whether a consumer seeks or is entitled to recover damages or has an adequate
             6142      remedy at law, he may bring a class action for declaratory judgment, an injunction, and
             6143      appropriate ancillary relief against an act or practice that violates this chapter.
             6144          (4) (a) A consumer who suffers loss as a result of a violation of this chapter may bring
             6145      a class action for the actual damages caused by an act or practice specified as violating this
             6146      chapter by a rule adopted by the enforcing authority under Subsection 13-11-8 (2) before the
             6147      consumer transactions on which the action is based, or declared to violate Section 13-11-4 or
             6148      13-11-5 by a final judgment of the appropriate court or courts of general jurisdiction and
             6149      appellate courts of this state that was either officially reported or made available for public
             6150      dissemination under Subsection 13-11-7 (1)(c) by the enforcing authority 10 days before the
             6151      consumer transactions on which the action is based, or with respect to a supplier who agreed to
             6152      it, was prohibited specifically by the terms of a consent judgment which became final before
             6153      the consumer transactions on which the action is based.
             6154          (b) If an act or practice that violates this chapter unjustly enriches a supplier and the
             6155      damages can be computed with reasonable certainty, damages recoverable on behalf of
             6156      consumers who cannot be located with due diligence shall be transferred to the state treasurer
             6157      pursuant to Title 67, Chapter 4a, Unclaimed Property Act.
             6158          (c) If a supplier shows by a preponderance of the evidence that a violation of this
             6159      chapter resulted from a bona fide error notwithstanding the maintenance of procedures
             6160      reasonably adapted to avoid the error, recovery under this section is limited to the amount, if
             6161      any, in which the supplier was unjustly enriched by the violation.
             6162          (5) Except for services performed by the enforcing authority, the court may award to
             6163      the prevailing party a reasonable attorney's fee limited to the work reasonably performed if:
             6164          (a) the consumer complaining of the act or practice that violates this chapter has
             6165      brought or maintained an action he knew to be groundless; or a supplier has committed an act


             6166      or practice that violates this chapter; and
             6167          (b) an action under this section has been terminated by a judgment or required by the
             6168      court to be settled under Subsection 13-11-21 (1)(a).
             6169          (6) Except for consent judgment entered before testimony is taken, a final judgment in
             6170      favor of the enforcing authority under Section 13-11-17 is admissible as prima facie evidence
             6171      of the facts on which it is based in later proceedings under this section against the same person
             6172      or a person in privity with him.
             6173          (7) When a judgment under this section becomes final, the prevailing party shall mail a
             6174      copy to the enforcing authority for inclusion in the public file maintained under Subsection
             6175      13-11-7 (1)(e).
             6176          (8) An action under this section [must] shall be brought within two years after
             6177      occurrence of a violation of this chapter, or within one year after the termination of proceedings
             6178      by the enforcing authority with respect to a violation of this chapter, whichever is later. When a
             6179      supplier sues a consumer, he may assert as a counterclaim any claim under this chapter arising
             6180      out of the transaction on which suit is brought.
             6181          Section 201. Section 13-11-20 is amended to read:
             6182           13-11-20. Class actions.
             6183          (1) An action may be maintained as a class action under this act only if:
             6184          (a) the class is so numerous that joinder of all members is impracticable;
             6185          (b) there are questions of law or fact common to the class;
             6186          (c) the claims or defenses of the representative parties are typical of the claims or
             6187      defenses of the class;
             6188          (d) the representative parties will fairly and adequately protect the interests of the class;
             6189      and
             6190          (e) either:
             6191          (i) the prosecution of separate actions by or against individual members of the class
             6192      would create a risk of:
             6193          (A) inconsistent or varying adjudications with respect to individual members of the
             6194      class which would establish incompatible standards of conduct for the party opposing the class;
             6195      or
             6196          (B) adjudications with respect to individual members of the class that would as a


             6197      practical matter dispose of the interests of the other members not parties to the adjudications or
             6198      substantially impair or impede their ability to protect their interests; or
             6199          (ii) the party opposing the class has acted or refused to act on grounds generally
             6200      applicable to the class, thereby making appropriate final injunctive relief or corresponding
             6201      declaratory relief with respect to the class as a whole; or
             6202          (iii) the court finds that the questions of law or fact common to the members of the
             6203      class predominate over any questions affecting only individual members, and that a class action
             6204      is superior to other available methods for the fair and efficient adjudication of the controversy.
             6205          (2) The matters pertinent to the findings under Subsection (1)(e)(iii) include:
             6206          (a) the interest of members of the class in individually controlling the prosecution or
             6207      defense of separate actions;
             6208          (b) the extent and nature of any litigation concerning the controversy already
             6209      commenced by or against members of the class;
             6210          (c) the desirability or undesirability of concentrating the litigation of the claims in the
             6211      particular forum; and
             6212          (d) the difficulties likely to be encountered in the management of a class action.
             6213          (3) As soon as practicable after the commencement of an action brought as a class
             6214      action, the court shall determine by order whether it is to be so maintained. An order under this
             6215      subsection may be conditional, and it may be amended before decision on the merits.
             6216          (4) In a class action maintained under Subsection (1)(e) the court may direct to the
             6217      members of the class the best notice practicable under the circumstances, including individual
             6218      notice to each member who can be identified through reasonable effort. The notice shall advise
             6219      each member that:
             6220          (a) the court will exclude him from the class, unless he requests inclusion, by a
             6221      specified date;
             6222          (b) the judgment, whether favorable or not, will include all members who request
             6223      inclusion; and
             6224          (c) a member who requests inclusion may, if he desires, enter an appearance through
             6225      his counsel.
             6226          (5) When appropriate, an action may be brought or maintained as a class action with
             6227      respect to particular issues, or a class may be divided into subclasses and each subclass treated


             6228      as a class.
             6229          (6) In the conduct of a class action the court may make appropriate orders:
             6230          (a) determining the course of proceedings or prescribing measures to prevent undue
             6231      repetition or complication in the presentation of evidence or argument;
             6232          (b) requiring, for the protection of the members of the class or otherwise for the fair
             6233      conduct of the action, that notice be given in the manner the court directs to some or all of the
             6234      members or to the enforcing authority of any step in the action, or of the proposed extent of the
             6235      judgment, or of the opportunity of members to signify whether they consider the representation
             6236      fair and adequate, to intervene and present claims or defenses, or otherwise to come into the
             6237      action;
             6238          (c) imposing conditions on the representative parties or on intervenors;
             6239          (d) requiring that the pleadings be amended to eliminate allegations as to representation
             6240      of absent persons, and that the action proceed accordingly; or
             6241          (e) dealing with similar procedural matters.
             6242          (7) A class action [shall not] may not be dismissed or compromised without approval
             6243      of the court. Notice of the proposed dismissal or compromise shall be given to all members of
             6244      the class as the court directs.
             6245          (8) The judgment in an action maintained as a class action under Subsection (1)(e)(i) or
             6246      (ii), whether or not favorable to the class, shall describe those whom the court finds to be
             6247      members of the class. The judgment in a class action under Subsection (1)(e)(iii), whether or
             6248      not favorable to the class, shall specify or describe those to whom the notice provided in
             6249      Subsection (4) was directed, and who have requested inclusion, and whom the court finds to be
             6250      members of the class.
             6251          Section 202. Section 13-11a-3 is amended to read:
             6252           13-11a-3. Deceptive trade practices enumerated -- Records to be kept -- Defenses.
             6253          (1) Deceptive trade practices occur when, in the course of a person's business,
             6254      vocation, or occupation that person:
             6255          (a) passes off goods or services as those of another;
             6256          (b) causes likelihood of confusion or of misunderstanding as to the source,
             6257      sponsorship, approval, or certification of goods or services;
             6258          (c) causes likelihood of confusion or of misunderstanding as to affiliation, connection,


             6259      association with, or certification by another;
             6260          (d) uses deceptive representations or designations of geographic origin in connection
             6261      with goods or services;
             6262          (e) represents that goods or services have sponsorship, approval, characteristics,
             6263      ingredients, uses, benefits, or qualities that they do not have or that a person has a sponsorship,
             6264      approval, status, affiliation, or connection that the person does not have;
             6265          (f) represents that goods are original or new if they are deteriorated, altered,
             6266      reconditioned, reclaimed, used, or second-hand;
             6267          (g) represents that goods or services are of a particular standard, quality, or grade, or
             6268      that goods are of a particular style or model, if they are of another;
             6269          (h) disparages the goods, services, or business of another by false or misleading
             6270      representation of fact;
             6271          (i) advertises goods or services or the price of goods and services with intent not to sell
             6272      them as advertised;
             6273          (j) advertises goods or services with intent not to supply a reasonable expectable public
             6274      demand, unless:
             6275          (i) the advertisement clearly and conspicuously discloses a limitation of quantity; or
             6276          (ii) the person issues rainchecks for the advertised goods or services;
             6277          (k) makes false or misleading statements of fact concerning the reasons for, existence
             6278      of, or amounts of price reductions;
             6279          (l) makes a comparison between the person's own sale or discount price and a
             6280      competitor's nondiscounted price without clearly and conspicuously disclosing that fact;
             6281          (m) without clearly and conspicuously disclosing the date of the price assessment
             6282      makes a price comparison with the goods of another based upon a price assessment performed
             6283      more than seven days prior to the date of the advertisement or uses in an advertisement the
             6284      results of a price assessment performed more than seven days prior to the date of the
             6285      advertisement without disclosing, in a print ad, the date of the price assessment, or in a radio or
             6286      television ad, the time frame of the price assessment;
             6287          (n) advertises or uses in a price assessment or comparison a price that is not that
             6288      person's own unless this fact is:
             6289          (i) clearly and conspicuously disclosed; and


             6290          (ii) the representation of the price is accurate;
             6291          (o) represents as independent an audit, accounting, price assessment, or comparison of
             6292      prices of goods or services, when the audit, accounting, price assessment, or comparison is not
             6293      independent;
             6294          (p) represents, in an advertisement of a reduction from the supplier's own prices, that
             6295      the reduction is from a regular price, when the former price is not a regular price as defined in
             6296      Subsection 13-11a-2 (14);
             6297          (q) advertises a price comparison or the result of a price assessment or comparison that
             6298      uses, in any way, an identified competitor's price without clearly and conspicuously disclosing
             6299      the identity of the price assessor and any relationship between the price assessor and the
             6300      supplier;
             6301          (r) makes a price comparison between a category of the supplier's goods and the same
             6302      category of the goods of another, without randomly selecting the individual goods or services
             6303      upon whose prices the comparison is based;
             6304          (s) makes a comparison between similar but nonidentical goods or services unless the
             6305      nonidentical goods or services are of essentially similar quality to the advertised goods or
             6306      services or the dissimilar aspects are clearly and conspicuously disclosed in the advertisements;
             6307      or
             6308          (t) engages in any other conduct which similarly creates a likelihood of confusion or of
             6309      misunderstanding.
             6310          (2) (a) For purposes of Subsection (1)(i), if a specific advertised price will be in effect
             6311      for less than one week from the advertisement date, the advertisement [must] shall clearly and
             6312      conspicuously disclose the specific time period during which the price will be in effect.
             6313          (b) For purposes of Subsection (1)(n), with respect to the price of a competitor, the
             6314      price [must] shall be one at which the competitor offered the goods or services for sale in the
             6315      product area at the time of the price assessment, and [must not] may not be an isolated price.
             6316          (c) For purposes of Subsection (1)(o), an audit, accounting, price assessment, or
             6317      comparison shall be independent if the price assessor randomly selects the goods to be
             6318      compared, and the time and place of the comparison, and no agreement or understanding exists
             6319      between the supplier and the price assessor that could cause the results of the assessment to be
             6320      fraudulent or deceptive. The independence of an audit, accounting, or price comparison is not


             6321      invalidated merely because the advertiser pays a fee for the audit, accounting, or price
             6322      comparison, but is invalidated if the audit, accounting, or price comparison is done by a full or
             6323      part-time employee of the advertiser.
             6324          (d) Examples of a disclosure that complies with Subsection (1)(q) are:
             6325          (i) "Price assessment performed by Store Z";
             6326          (ii) "Price assessment performed by a certified public accounting firm"; or
             6327          (iii) "Price assessment performed by employee of Store Y".
             6328          (e) For the purposes of Subsection (1)(r), goods or services are randomly selected when
             6329      the supplier has no advance knowledge of what goods and services will be surveyed by the
             6330      price assessor, and when the supplier certifies its lack of advance knowledge by an affidavit to
             6331      be retained in the supplier's records for one year.
             6332          (f) (i) It is prima facie evidence of compliance with Subsection (1)(s) if:
             6333          (A) the goods compared are substantially the same size; and
             6334          (B) the goods compared are of substantially the same quality, which may include
             6335      similar models of competing brands of goods, or goods made of substantially the same
             6336      materials and made with substantially the same workmanship.
             6337          (ii) It is prima facie evidence of a deceptive comparison under this section when the
             6338      prices of brand name goods and generic goods are compared.
             6339          (3) Any supplier who makes a comparison with a competitor's price in advertising shall
             6340      maintain for a period of one year records that disclose the factual basis for such price
             6341      comparisons and from which the validity of such claim can be established.
             6342          (4) It is a defense to any claim of false or deceptive price representations under this
             6343      chapter that a person:
             6344          (a) has no knowledge that the represented price is not genuine; and
             6345          (b) has made reasonable efforts to determine whether the represented price is genuine.
             6346          (5) Subsections (1)(m) and (q) do not apply to price comparisons made in catalogs in
             6347      which a supplier compares the price of a single item of its goods or services with those of
             6348      another.
             6349          (6) To prevail in an action under this chapter, a complainant need not prove
             6350      competition between the parties or actual confusion or misunderstanding.
             6351          (7) This chapter does not affect unfair trade practices otherwise actionable at common


             6352      law or under other statutes of this state.
             6353          Section 203. Section 13-12-3 is amended to read:
             6354           13-12-3. Refiners or distributors -- Unlawful practices -- Marketing agreements
             6355      with dealers.
             6356          No refiner or distributor, directly or indirectly or through any office, agent, or
             6357      employee, shall engage in any of the following practices:
             6358          (1) requiring a dealer, at the time of entering into a marketing agreement, to agree to a
             6359      release, assignment, novation, waiver or estoppel which would relieve any person from any
             6360      provision of this act;
             6361          (2) prohibiting, directly or indirectly, the right of free association among dealers for
             6362      any lawful purpose;
             6363          (3) requiring a dealer to keep his retail outlet open for business for any specified
             6364      number of hours per day, or days per week, unless those requirements are set forth in writing at
             6365      the time of entering into the marketing agreement;
             6366          (4) fixing or maintaining the price at which the dealer must sell products, or attempting
             6367      to fix or maintain those prices, through any form of coercion whatsoever; provided, that
             6368      nothing herein shall be construed to prohibit a distributor or refiner from suggesting prices or
             6369      counseling with dealers concerning those prices;
             6370          (5) requiring a dealer to use or utilize any promotion, premium, coupon, give-away,
             6371      sales promotion or rebate in the operation of the business; provided that nothing herein shall be
             6372      construed to prohibit a dealer from participating financially in a promotion, premium, coupon,
             6373      give-away, sales promotion or rebate sponsored by the distributor or refiner if agreed to
             6374      voluntarily by the parties;
             6375          (6) terminating, canceling or failing to renew any marketing agreement without having
             6376      first given written notice setting forth all the reasons for such termination, cancellation, or
             6377      intent not to renew the dealer at least 90 days in advance of such termination, cancellation, or
             6378      failure to renew, except:
             6379          (a) where the alleged grounds are voluntary abandonment by the dealer of the
             6380      marketing agreement relationship in which event the aforementioned written notice [must]
             6381      shall be given five business days in advance of such termination, cancellation, or failure to
             6382      renew; and


             6383          (b) where the alleged grounds are caused by the conviction of the dealer or distributor
             6384      in a court of competent jurisdiction of a criminal offense directly related to the business
             6385      conducted pursuant to the marketing agreement, or the bankruptcy of the dealer or distributor,
             6386      in which event the aforementioned termination, cancellation, or failure to renew may be
             6387      effective immediately following such conviction or bankruptcy;
             6388          (c) where the alleged grounds are:
             6389          (i) failure of the dealer to substantially comply with the requirements of the marketing
             6390      agreement;
             6391          (ii) action of the dealer fraudulently advising members of the motoring public of the
             6392      necessity for unneeded automotive repairs, parts or accessories;
             6393          (iii) action of the dealer fraudulently representing either expressly or impliedly the
             6394      trade mark or brand of product being sold by the dealer;
             6395          (iv) failure of the dealer to maintain the premises in a sufficiently clean and healthful
             6396      manner to avoid constituting a nuisance to members of the motoring public or adjoining
             6397      property owners as determined by the local board of health authority;
             6398      in which event the distributor shall provide the dealer with written notice of his intent to
             6399      terminate, cancel or fail to renew, following which the dealer shall be allowed 10 days in which
             6400      to comply, correct or respond to said allegations before further action can be taken by the
             6401      distributor.
             6402          Section 204. Section 13-12-4 is amended to read:
             6403           13-12-4. Cancellation provisions -- Dealer or distributor -- Time limit to exercise.
             6404          (1) Every dealer or distributor shall have the right, which may not be waived, to cancel
             6405      his marketing agreement until midnight of the seventh business day after the day on which the
             6406      buyer signs the marketing agreement or, if that agreement is oral, after the day on which the
             6407      buyer agrees thereto.
             6408          (2) Notice of cancellation shall be deemed to have been given when it is addressed to
             6409      the distributor's or refiner's last known address, postage prepaid, and certified with a return
             6410      receipt requested.
             6411          (3) Unless within 10 days after delivery of that notice of cancellation the dealer returns
             6412      to the distributor or refiner any money, equipment or merchandise loaned, sold or delivered to
             6413      the dealer and delivers up full possession of the business location to the distributor or refiner,


             6414      that notice of cancellation shall be null and void ab initio.
             6415          (4) (a) Except as provided in this subsection, within 10 days after notice of cancellation
             6416      is delivered to him, the distributor or refiner [must] shall tender to the buyer any payments
             6417      made by the buyer and any note or other evidence of indebtedness.
             6418          (b) If the down payment includes goods traded in, the goods [must] shall be tendered in
             6419      substantially as good condition as when received by the distributor or refiner. If the distributor
             6420      or refiner fails to tender the goods as provided by this subsection, the dealer may elect to
             6421      recover an amount equal to the allowance established by their agreement.
             6422          (c) Notwithstanding the provisions of Subsection (3) until the distributor or refiner has
             6423      complied with the obligations imposed by this subsection, the dealer may retain possession of
             6424      goods delivered to him by the distributor or refiner and has a lien on the goods in his
             6425      possession or control for any recovery to which he is entitled.
             6426          Section 205. Section 13-12-7 is amended to read:
             6427           13-12-7. District court's jurisdiction over violations -- Equitable relief --
             6428      Attorney's fees and costs -- Action for failure to renew -- Damages limited.
             6429          The district courts for the district wherein the dealer resides or wherein the dealership
             6430      was to be established shall have jurisdiction over any action involving a violation of this act. In
             6431      addition to such relief as may be available at common law, the courts may grant such equitable
             6432      relief, both interim and final, as may be necessary to remedy those violations including[, but
             6433      not limited to,] declaratory judgments, injunctive relief, and punitive damages as well as actual
             6434      damages. The prevailing party may, in the court's sole discretion, be awarded attorney's fees
             6435      and expert witness fees in addition to such other relief as the court may deem equitable. In any
             6436      action for failure to renew an agreement, damages shall be limited to actual damages, including
             6437      the value of the dealer's equity in the dealership, together with reasonable attorney's fees and
             6438      costs.
             6439          Section 206. Section 13-13-4 is amended to read:
             6440           13-13-4. Payment of percentage of receipts.
             6441          If an exhibitor is required by a license agreement to make any payment to the distributor
             6442      that is based on a percentage of the theatre box office receipts the license agreement [shall not]
             6443      may not require a guarantee of a minimum payment to the distributor or require the exhibitor to
             6444      charge any per capita amount for ticket sales.


             6445          Section 207. Section 13-14b-103 is amended to read:
             6446           13-14b-103. Warranty claims.
             6447          (1) An equipment dealer may submit a warranty claim to a supplier if a warranty defect
             6448      is identified and documented prior to the expiration of a supplier's warranty:
             6449          (a) while a dealer agreement is in effect; or
             6450          (b) after the termination of a dealer agreement if the claim is for work performed while
             6451      the dealer agreement was in effect.
             6452          (2) (a) A supplier shall accept or reject a warranty claim submitted under Subsection
             6453      (1) within 30 days of the date the supplier received the claim.
             6454          (b) A warranty claim not rejected within 30 days of the date the supplier received the
             6455      claim is considered to be accepted by the supplier.
             6456          (3) No later than 30 days after the date a warranty claim is accepted or rejected under
             6457      Subsection (2), the supplier shall:
             6458          (a) pay an accepted warranty claim; or
             6459          (b) send the dealer written notice of the reason the warranty claim was rejected.
             6460          (4) (a) (i) A supplier shall compensate the dealer for the warranty claim as follows:
             6461          (A) the dealer's established customer hourly retail labor rate multiplied by the
             6462      reasonable and customary amount of time required to complete such work, including diagnostic
             6463      time, expressed in hours and fractions of an hour;
             6464          (B) the dealer's current net price plus 20% for parts to reimburse the dealer for
             6465      reasonable costs of doing business in performing the warranty service on the supplier's behalf;
             6466      and
             6467          (C) extraordinary freight and handling costs.
             6468          (ii) For purposes of Subsection (4)(a)(i)(C), "extraordinary freight and handling costs"
             6469      mean costs that are above and beyond the normal reimbursement policy of the supplier for
             6470      warranty repair work.
             6471          (b) (i) The supplier [must] shall give due consideration to any extraordinary expenses
             6472      incurred by the dealer in performing necessary warranty repairs.
             6473          (ii) If the repair work is for safety or mandatory modifications ordered by the supplier,
             6474      the supplier shall reimburse the dealer for transportation costs incurred by the dealer.
             6475          (5) After payment of a warranty claim, a supplier may not charge back, off-set, or


             6476      otherwise attempt to recover from the dealer all or part of the amount of the claim unless:
             6477          (a) the warranty claim was fraudulent;
             6478          (b) the services for which the warranty claim was made were not properly performed or
             6479      were unnecessary to comply with the warranty; or
             6480          (c) the dealer did not substantiate the warranty claim according to the written
             6481      requirements of the supplier that were in effect when the equipment was delivered to the dealer
             6482      by the customer for warranty repairs.
             6483          (6) If a supplier denies a warranty claim due to a particular item or part of the claim,
             6484      the denial shall only affect the items or parts in question and not the complete warranty claim.
             6485          (7) A supplier may not pass the cost of covering warranty claims under this chapter on
             6486      to a dealer through any means including:
             6487          (a) surcharges;
             6488          (b) reduction of discounts; or
             6489          (c) certification standards.
             6490          (8) (a) The provisions of this chapter do not apply to a supplier or dealer where a
             6491      written dealer agreement provides for compensation to a dealer for warranty labor and parts
             6492      costs either as part of the pricing of the equipment to the dealer or in the form of a lump-sum
             6493      payment.
             6494          (b) The lump-sum payment under Subsection (8)(a) [must] shall be at least 5% of the
             6495      suggested retail price of the equipment.
             6496          Section 208. Section 13-15-4 is amended to read:
             6497           13-15-4. Information to be filed by seller -- Representations.
             6498          (1) Any seller of an assisted marketing plan shall file the following information with
             6499      the division:
             6500          (a) the name, address, and principal place of business of the seller, and the name,
             6501      address, and principal place of business of the parent or holding company of the seller, if any,
             6502      who is responsible for statements made by the seller;
             6503          (b) all trademarks, trade names, service marks, or advertising or other commercial
             6504      symbols that identify the products, equipment, supplies, or services to be offered, sold, or
             6505      distributed by the prospective purchaser;
             6506          (c) an individual detailed statement covering the past five years of the business


             6507      experience of each of the seller's current directors and executive officers and an individual
             6508      statement covering the same period for the seller and the seller's parent company, if any,
             6509      including the length of time each:
             6510          (i) has conducted a business of the type advertised or solicited for operation by a
             6511      prospective purchaser;
             6512          (ii) has offered or sold the assisted marketing plan; and
             6513          (iii) has offered for sale or sold assisted marketing plans in other lines of business,
             6514      together with a description of the other lines of business;
             6515          (d) a statement of the total amount that [must] shall be paid by the purchaser to obtain
             6516      or commence the business opportunity such as initial fees, deposits, down payments, prepaid
             6517      rent, and equipment and inventory purchases; provided, that if all or part of these fees or
             6518      deposits are returnable, the conditions under which they are returnable shall also be disclosed;
             6519          (e) a complete statement of the actual services the seller will perform for the purchaser;
             6520          (f) a complete statement of all oral, written, or visual representations that will be made
             6521      to prospective purchasers about specific levels of potential sales, income, gross and net profits,
             6522      or any other representations that suggest a specific level;
             6523          (g) a complete description of the type and length of any training promised to
             6524      prospective purchasers;
             6525          (h) a complete description of any services promised to be performed by the seller in
             6526      connection with the placement of the equipment, products, or supplies at any location from
             6527      which they will be sold or used; and a complete description of those services together with any
             6528      agreements that will be made by the seller with the owner or manager of the location where the
             6529      purchaser's equipment, products, or supplies will be placed;
             6530          (i) a statement that discloses any person identified in Subsection (1)(a) who:
             6531          (i) has been convicted of a felony or misdemeanor or pleaded nolo contendere to a
             6532      felony or misdemeanor charge if the felony or misdemeanor involved fraud, embezzlement,
             6533      fraudulent conversion, or misappropriation of property;
             6534          (ii) has been held liable or consented to the entry of a stipulated judgment in any civil
             6535      action based upon fraud, embezzlement, fraudulent conversion, misappropriation of property,
             6536      or the use of untrue or misleading representations in the sale or attempted sale of any real or
             6537      personal property, or upon the use of any unfair, unlawful or deceptive business practice; or


             6538          (iii) is subject to an injunction or restrictive order relating to business activity as the
             6539      result of an action brought by a public agency;
             6540          (j) a financial statement of the seller signed by one of the seller's officers, directors,
             6541      trustees, or general or limited partners, under a declaration that certifies that to the signatory's
             6542      knowledge and belief the information in the financial statement is true and accurate; a financial
             6543      statement that is more than 13 months old is unacceptable;
             6544          (k) a copy of the entire marketing plan contract;
             6545          (l) the number of marketing plans sold to date, and the number of plans under
             6546      negotiation;
             6547          (m) geographical information including all states in which the seller's assisted
             6548      marketing plans have been sold, and the number of plans in each such state;
             6549          (n) the total number of marketing plans that were cancelled by the seller in the past 12
             6550      months; and
             6551          (o) the number of marketing plans that were voluntarily terminated by purchasers
             6552      within the past 12 months and the total number of such voluntary terminations to date.
             6553          (2) The seller of an assisted marketing plan filing information under Subsection (1)
             6554      shall pay a fee as determined by the department in accordance with Section 63J-1-504 .
             6555          (3) Before commencing business in this state, the seller of an assisted marketing plan
             6556      shall file the information required under Subsection (1) and receive from the division proof of
             6557      receipt of the filing.
             6558          (4) A seller of an assisted marketing plan claiming an exemption from filing under this
             6559      chapter shall file a notice of claim of exemption from filing with the division. A seller
             6560      claiming an exemption from filing bears the burden of proving the exemption. The division
             6561      shall collect a fee for filing a notice of claim of exemption, as determined by the department in
             6562      accordance with Section 63J-1-504 .
             6563          (5) A representation described in Subsection (1)(f) shall be relevant to the geographic
             6564      market in which the business opportunity is to be located. When the statements or
             6565      representations are made, a warning after the representation in not less than 12 point upper and
             6566      lower case boldface type shall appear as follows:
             6567     
CAUTION

             6568          No guarantee of earnings or ranges of earnings can be made. The number of purchasers


             6569      who have earned through this business an amount in excess of the amount of their initial
             6570      payment is at least _____ which represents _____% of the total number of purchasers of this
             6571      business opportunity.
             6572          Section 209. Section 13-15-5 is amended to read:
             6573           13-15-5. Disclosure statement furnished to buyer -- Contents.
             6574          All the information required under Section 13-15-4 shall be contained in a single
             6575      disclosure statement or prospectus which shall be provided to any prospective purchaser at
             6576      least 10 business days prior to the earlier of:
             6577          (1) the execution by prospective purchaser of any agreement imposing a binding legal
             6578      obligation on such prospective purchaser by which the seller knows or should know, in
             6579      connection with the sale or proposed sale of the "assisted marketing plan"; or
             6580          (2) the payment by a prospective purchaser, by which the seller knows or should know
             6581      of any consideration in connection with the sale or proposed sale of the "assisted market plan."
             6582      The disclosure statement or prospectus [shall not] may not contain any material or information
             6583      other than that required under Section 13-15-4 . However, the seller may give prospective
             6584      purchasers nondeceptive information other than that contained in the disclosure statement or
             6585      prospectus if it does not contradict the information required to appear in the disclosure
             6586      statement or prospectus. A cover sheet attached to the disclosure statement or prospectus shall
             6587      conspicuously state the name of the seller, the date of issuance of the disclosure statement or
             6588      prospectus, and a notice printed in not less than 12 point upper and lower case boldface type as
             6589      follows:
             6590     
INFORMATION FOR PURCHASE OF A MARKETING PLAN:

             6591          To protect you, the State Division of Consumer Protection has required your seller to
             6592      give you this information. The State Division of Consumer Protection has not verified this
             6593      information as to its accuracy. The notice may contain additional precautions deemed necessary
             6594      and pertinent. The seller, in lieu of the information requested by Section 13-15-4 , may file
             6595      with the commission and provide to prospective purchasers certified disclosure documents
             6596      authorized for use by the Federal Trade Commission pursuant to Title 16, Chapter I,
             6597      Subchapter d, Trade Regulation Rules, Part 436, "Disclosure Requirements and Prohibitions
             6598      Concerning Franchising and Business Opportunity Ventures."
             6599          Section 210. Section 13-32-103 is amended to read:


             6600           13-32-103. Prohibited sales.
             6601          A vendor who is not a manufacturer's or distributor's representative [shall not] may not
             6602      sell or offer for sale or exchange at a swap meet or flea market any:
             6603          (1) food product which is manufactured and packaged specifically for consumption by
             6604      a child under two years of age;
             6605          (2) nonprescription or over-the-counter drug or medication other than herbal products,
             6606      dietary supplements, botanical extracts, or vitamins; or
             6607          (3) cosmetic or personal care product which has an expiration date.
             6608          Section 211. Section 13-32-104 is amended to read:
             6609           13-32-104. Receipts and transaction records -- Retention of receipts and
             6610      transaction records.
             6611          (1) Every vendor shall maintain receipts or a permanent record book for the acquisition
             6612      of new and unused property which [must] shall contain:
             6613          (a) the date of the transaction on which the property was acquired;
             6614          (b) the name and address of the person from whom the property was acquired;
             6615          (c) an identification and description of the property acquired;
             6616          (d) the price paid for such property; and
             6617          (e) the signatures of the person selling the property and the vendor.
             6618          (2) The receipt or record for each transaction required by Subsection (1) shall be
             6619      maintained by the vendor for a period of not less than one year following the date of the
             6620      transaction.
             6621          Section 212. Section 13-32-107 is amended to read:
             6622           13-32-107. Exemptions.
             6623          The provisions of this chapter [shall not] do not apply to:
             6624          (1) the sale of a motor vehicle or trailer that is required to be registered or is subject to
             6625      the certificate of title laws of this state;
             6626          (2) the sale of agricultural products, forestry products, livestock, or food products other
             6627      than those which are manufactured and packaged specifically for consumption by a child under
             6628      two years of age;
             6629          (3) business conducted at any industry or association trade show;
             6630          (4) the sale of arts or crafts by the person who produced such arts and crafts; and


             6631          (5) anyone who displays only samples, catalogs, or brochures and sells property for
             6632      future delivery.
             6633          Section 213. Section 13-32a-109.8 is amended to read:
             6634           13-32a-109.8. Pawned or sold property subject to law enforcement investigation.
             6635          (1) If the article pawned or sold under Section 13-32a-109 is subject to an investigation
             6636      and a criminal prosecution results, the prosecuting agency shall, prior to disposition of the case:
             6637          (a) request restitution to the pawn or secondhand business for the crimes perpetrated
             6638      against the pawn or secondhand business as a victim of theft by deception; and
             6639          (b) request restitution for the original victim.
             6640          (2) If the original victim of the theft of the property files a police report and the
             6641      property is subsequently located at a pawn or secondhand business, the victim [must] shall
             6642      fully cooperate with the prosecution of the crimes perpetrated against the pawn or secondhand
             6643      business as a victim of theft by deception, in order to qualify for restitution regarding the
             6644      property.
             6645          (3) If the original victim does not pursue criminal charges or does not cooperate in the
             6646      prosecution of the property theft crimes charged against the defendant and the theft by
             6647      deception charges committed against the pawn or secondhand business, then the original victim
             6648      [must] shall pay to the pawn or secondhand business the amount of money financed or paid by
             6649      the pawn or secondhand business to the defendant in order to obtain the property.
             6650          (4) (a) The victim's cooperation in the prosecution of the property crimes and in the
             6651      prosecution of the theft by deception offense committed against the pawn or secondhand
             6652      business suspends the requirements of Subsections (2) and (3).
             6653          (b) If the victim cooperates in the prosecution under Subsection (4)(a) and the
             6654      defendants are convicted, the prosecuting agency shall direct the pawn or secondhand business
             6655      to turn over the property to the victim.
             6656          (c) Upon receipt of notice from the prosecuting agency that the property must be turned
             6657      over to the victim, the pawn or secondhand business shall return the property to the victim as
             6658      soon as reasonably possible.
             6659          (5) A pawn or secondhand business [must] shall fully cooperate in the prosecution of
             6660      the property crimes committed against the original victim and the property crime of theft by
             6661      deception committed against the pawn or secondhand business in order to participate in any


             6662      court-ordered restitution.
             6663          (6) At all times during the course of a criminal investigation and subsequent
             6664      prosecution, the article subject to a law enforcement hold shall be kept secure by the pawn or
             6665      secondhand business subject to the hold unless a pawned or sold article has been seized by the
             6666      law enforcement agency pursuant to Section 13-32a-109.5 .
             6667          Section 214. Section 13-34-104 is amended to read:
             6668           13-34-104. Prohibited acts -- Exceptions -- Responsibilities of proprietary schools.
             6669          (1) Except as provided in this chapter, a proprietary school may not offer, sell, or
             6670      award a degree or any other type of educational credential unless the student has enrolled in
             6671      and successfully completed a prescribed program of study as outlined in the proprietary
             6672      school's catalogue.
             6673          (2) The prohibition described in Subsection (1) does not apply to:
             6674          (a) honorary credentials clearly designated as such on the front side of a diploma; or
             6675          (b) certificates and awards by a proprietary school that offers other educational
             6676      credentials requiring enrollment in and successful completion of a prescribed program of study
             6677      in compliance with the requirements of this chapter.
             6678          (3) A proprietary school [must] shall provide bona fide instruction through
             6679      student-faculty interaction.
             6680          (4) A proprietary school may not enroll a student in a program unless the proprietary
             6681      school has made a good-faith determination that the student has the ability to benefit from the
             6682      program.
             6683          (5) A proprietary school may not make or cause to be made any oral, written, or visual
             6684      statement or representation that an institution described in Subsection 13-34-107 (2)(a)(ii)
             6685      knows or should know to be:
             6686          (a) false;
             6687          (b) deceptive;
             6688          (c) substantially inaccurate; or
             6689          (d) misleading.
             6690          (6) The division shall establish standards and criteria by rule made in accordance with
             6691      Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for the following:
             6692          (a) the awarding of educational credentials;


             6693          (b) bona fide instruction through student-faculty interaction; and
             6694          (c) determination of the ability of a student to benefit from a program.
             6695          Section 215. Section 13-34-105 is amended to read:
             6696           13-34-105. Exempted institutions.
             6697          (1) This chapter does not apply to the following institutions:
             6698          (a) a Utah institution directly supported, to a substantial degree, with funds provided
             6699      by:
             6700          (i) the state;
             6701          (ii) a local school district; or
             6702          (iii) other Utah governmental subdivision;
             6703          (b) an institution that offers instruction exclusively at or below the 12th grade level;
             6704          (c) a lawful enterprise that offers only professional review programs, such as C.P.A.
             6705      and bar examination review and preparation courses;
             6706          (d) a private, postsecondary educational institution that is owned, controlled, operated,
             6707      or maintained by a bona fide church or religious denomination, which is exempted from
             6708      property taxation under the laws of this state;
             6709          (e) subject to Subsection (3), a school or institution that is accredited by a regional or
             6710      national accrediting agency recognized by the United States Department of Education;
             6711          (f) subject to Subsection (4), a business organization, trade or professional association,
             6712      fraternal society, or labor union that:
             6713          (i) sponsors or conducts courses of instruction or study predominantly for bona fide
             6714      employees or members; and
             6715          (ii) does not, in advertising, describe itself as a school;
             6716          (g) an institution that exclusively offers general education courses or instruction solely
             6717      remedial, avocational, nonvocational, or recreational in nature, that does not:
             6718          (i) advertise occupation objectives; or
             6719          (ii) grant educational credentials;
             6720          (h) an institution that offers only workshops or seminars:
             6721          (i) lasting no longer than three calendar days; and
             6722          (ii) for which academic credit is not awarded;
             6723          (i) an institution that offers programs:


             6724          (i) in barbering, cosmetology, real estate, or insurance; and
             6725          (ii) that are regulated and approved by a state or federal governmental agency;
             6726          (j) an education provider certified by the Division of Real Estate under Section
             6727      61-2c-204.1 ;
             6728          (k) an institution that offers aviation training if the institution:
             6729          (i) (A) is approved under Part 141, Federal Aviation Regulations, 14 C.F.R. Chapter
             6730      141; or
             6731          (B) provides aviation training under Part 61, Federal Aviation Regulations, 14 C.F.R.
             6732      Chapter 61; and
             6733          (ii) exclusively offers aviation training that a student fully receives within 24 hours
             6734      after the student pays any tuition, fee, or other charge for the aviation training; and
             6735          (l) an institution that provides emergency medical services training if all of the
             6736      institution's instructors, course coordinators, and courses are approved by the Department of
             6737      Health.
             6738          (2) (a) If available evidence suggests that an exempt institution under this section is not
             6739      in compliance with the standards of registration under this chapter and applicable division
             6740      rules, the division shall contact the institution and, if appropriate, the state or federal
             6741      government agency to request corrective action.
             6742          (b) Subsection (2)(a) does not apply to an institution exempted under Subsection (1)(e).
             6743          (3) An institution, branch, extension, or facility operating within the state that is
             6744      affiliated with an institution operating in another state [must] shall be separately approved by
             6745      the affiliate's regional or national accrediting agency to qualify for the exemption described in
             6746      Subsection (1)(e).
             6747          (4) For purposes of Subsection (1)(f), a business organization, trade or professional
             6748      association, fraternal society, or labor union is considered to be conducting the course
             6749      predominantly for bona fide employees or members if it hires a majority of the persons who:
             6750          (a) successfully complete its course of instruction or study with a reasonable degree of
             6751      proficiency; and
             6752          (b) apply for employment with that same entity.
             6753          Section 216. Section 13-34-107 is amended to read:
             6754           13-34-107. Advertising, recruiting, or operating a proprietary school -- Required


             6755      registration statement or exemption -- Certificate of registration -- Registration does not
             6756      constitute endorsement.
             6757          (1) (a) Unless an institution complies with Subsection (1)(b), the institution may not do
             6758      any of the following in this state:
             6759          (i) advertise a proprietary school;
             6760          (ii) recruit students for a proprietary school; or
             6761          (iii) operate a proprietary school.
             6762          (b) An institution may not engage in an activity described in Subsection (1)(a) unless
             6763      the institution:
             6764          (i) (A) files with the division a registration statement relating to the proprietary school
             6765      that is in compliance with:
             6766          (I) applicable rules made by the division; and
             6767          (II) the requirements set forth in this chapter; and
             6768          (B) obtains a certificate of registration; or
             6769          (ii) establishes an exemption with the division.
             6770          (2) (a) The registration statement or exemption described in Subsection (1) shall be:
             6771          (i) verified by the oath or affirmation of the owner or a responsible officer of the
             6772      proprietary school filing the registration statement or exemption; and
             6773          (ii) include a certification as to whether any of the following has violated laws, federal
             6774      regulations, or state rules as determined in a criminal, civil, or administrative proceeding:
             6775          (A) the proprietary school; or
             6776          (B) any of the following with respect to the proprietary school:
             6777          (I) an owner;
             6778          (II) an officer;
             6779          (III) a director;
             6780          (IV) an administrator;
             6781          (V) a faculty member;
             6782          (VI) a staff member; or
             6783          (VII) an agent.
             6784          (b) The proprietary school shall:
             6785          (i) make available, upon request, a copy of the registration statement, showing the date


             6786      upon which it was filed; and
             6787          (ii) display the certificate of registration obtained from the division in a conspicuous
             6788      place on the proprietary school's premises.
             6789          (3) (a) A registration statement and the accompanying certificate of registration are not
             6790      transferable.
             6791          (b) In the event of a change in ownership or in the governing body of the proprietary
             6792      school, the new owner or governing body, within 30 days after the change, shall file a new
             6793      registration statement.
             6794          (4) Except as provided in Subsection (3)(b), a registration statement or a renewal
             6795      statement and the accompanying certificate of registration are effective for a period of two
             6796      years after the date of filing and issuance.
             6797          (5) (a) The division shall establish a graduated fee structure for the filing of registration
             6798      statements by various classifications of institutions pursuant to Section 63J-1-504 .
             6799          (b) Fees are not refundable.
             6800          (c) Fees shall be deposited in the Commerce Service Fund pursuant to Section 13-1-2 .
             6801          (6) (a) Each proprietary school shall:
             6802          (i) demonstrate fiscal responsibility at the time the proprietary school files its
             6803      registration statement as prescribed by rules of the division; and
             6804          (ii) provide evidence to the division that the proprietary school:
             6805          (A) is financially sound; and
             6806          (B) can reasonably fulfill commitments to and obligations the proprietary school has
             6807      incurred with students and creditors.
             6808          (b) A proprietary school applying for an initial certificate of registration to operate
             6809      shall prepare and submit financial statements and supporting documentation as requested by
             6810      the division.
             6811          (c) A proprietary school applying for renewal of a certificate of registration to operate
             6812      or renewal under new ownership [must] shall provide audited financial statements.
             6813          (d) The division may require evidence of financial status at other times when it is in the
             6814      best interest of students to require such information.
             6815          (7) (a) A proprietary school applying for an initial certificate of registration or seeking
             6816      renewal shall provide in a form approved by the division:


             6817          (i) a surety bond;
             6818          (ii) a certificate of deposit; or
             6819          (iii) an irrevocable letter of credit.
             6820          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             6821      division may make rules providing for:
             6822          (i) the amount of the bond, certificate, or letter of credit required under Subsection
             6823      (7)(a), not to exceed in amount the anticipated tuition and fees to be received by the proprietary
             6824      school during a school year;
             6825          (ii) the execution of the bond, certificate, or letter of credit;
             6826          (iii) cancellation of the bond, certificate, or letter of credit during or at the end of the
             6827      registration term; and
             6828          (iv) any other matters related to providing the bond, certificate, or letter of credit
             6829      required under Subsection (7)(a).
             6830          (c) The bond, certificate, or letter of credit shall be used as a protection against loss of
             6831      advanced tuition, book fees, supply fees, or equipment fees:
             6832          (i) collected by the proprietary school from a student or a student's parent, guardian, or
             6833      sponsor prior to the completion of the program or courses for which it was collected; or
             6834          (ii) for which the student is liable.
             6835          (8) (a) Except as provided in Section 13-34-113 , the division may not refuse
             6836      acceptance of a registration statement that is:
             6837          (i) tendered for filing and, based on a preliminary review, appears to be in compliance
             6838      with Subsections (1), (2), and (6); and
             6839          (ii) accompanied by:
             6840          (A) the required fee; and
             6841          (B) one of the following required by Subsection (7):
             6842          (I) surety bond;
             6843          (II) certificate of deposit; or
             6844          (III) irrevocable letter of credit.
             6845          (b) A certificate of registration is effective upon the date of issuance.
             6846          (c) The responsibility of compliance is upon the proprietary school and not upon the
             6847      division.


             6848          (d) (i) If it appears to the division that a registration statement on file may not be in
             6849      compliance with this chapter, the division may advise the proprietary school as to the apparent
             6850      deficiencies.
             6851          (ii) After a proprietary school has been notified of a deficiency under Subsection
             6852      (8)(d)(i), a new or amended statement may be presented for filing by the proprietary school,
             6853      accompanied by:
             6854          (A) the required fee; and
             6855          (B) one of the following required by Subsection (7):
             6856          (I) surety bond;
             6857          (II) certificate of deposit; or
             6858          (III) irrevocable letter of credit.
             6859          (9) The following does not constitute and may not be represented by any person to
             6860      constitute, an endorsement or approval of the proprietary school by either the division or the
             6861      state:
             6862          (a) an acceptance of:
             6863          (i) a registration statement;
             6864          (ii) a renewal statement; or
             6865          (iii) an amended registration statement; and
             6866          (b) issuance of a certificate of registration.
             6867          Section 217. Section 13-41-102 is amended to read:
             6868           13-41-102. Definitions.
             6869          For purposes of this chapter:
             6870          (1) "Consumer" means a person who acquires a good or service for consumption.
             6871          (2) "Division" means the Division of Consumer Protection.
             6872          (3) (a) "Emergency territory" means the geographical area:
             6873          (i) for which there has been a state of emergency declared; and
             6874          (ii) that is directly affected by the events giving rise to a state of emergency.
             6875          (b) "Emergency territory" does not include a geographical area that is affected by the
             6876      events giving rise to a state of emergency only by economic market forces.
             6877          (4) "Excessive price" means a price for a good or service that exceeds by more than
             6878      10% the average price charged by that person for that good or service in the 30-day period


             6879      immediately preceding the day on which the state of emergency is declared.
             6880          (5) "Good" means any personal property displayed, held, or offered for sale by a
             6881      merchant that is necessary for consumption or use as a direct result of events giving rise to a
             6882      state of emergency.
             6883          (6) "Retail" means the level of distribution where a good or service is typically sold
             6884      directly, or otherwise provided, to a member of the public who is an end-user and does not
             6885      resell the good or service.
             6886          (7) "Service" means any activity that is performed in whole or in part for the purpose of
             6887      financial gain including[, but not limited to,] personal service, professional service, rental,
             6888      leasing, or licensing for use that is necessary for consumption or use as a direct result of events
             6889      giving rise to a state of emergency.
             6890          (8) "State of emergency" means a declaration of:
             6891          (a) an emergency or major disaster by the President of the United States of America; or
             6892          (b) a state of emergency by the governor under Section 63K-4-203 .
             6893          Section 218. Section 13-42-105 is amended to read:
             6894           13-42-105. Application for registration -- Form, fee, and accompanying
             6895      documents.
             6896          (1) An application for registration as a provider [must] shall be in a form prescribed by
             6897      the administrator.
             6898          (2) Subject to adjustment of dollar amounts pursuant to Subsection 13-42-132 (6), an
             6899      application for registration as a provider [must] shall be accompanied by:
             6900          (a) the fee established by the administrator in accordance with Section 63J-1-504 ;
             6901          (b) the bond required by Section 13-42-113 ;
             6902          (c) identification of all trust accounts required by Section 13-42-122 and an irrevocable
             6903      consent authorizing the administrator to review and examine the trust accounts;
             6904          (d) evidence of insurance in the amount of $250,000:
             6905          (i) against the risks of dishonesty, fraud, theft, and other misconduct on the part of the
             6906      applicant or a director, employee, or agent of the applicant;
             6907          (ii) issued by an insurance company authorized to do business in this state and rated at
             6908      least A or equivalent by a nationally recognized rating organization approved by the
             6909      administrator;


             6910          (iii) with a deductible not exceeding $5,000;
             6911          (iv) payable for the benefit of the applicant, this state, and individuals who are
             6912      residents of this state, as their interests may appear; and
             6913          (v) not subject to cancellation by the applicant or the insurer until 60 days after written
             6914      notice has been given to the administrator;
             6915          (e) a record consenting to the jurisdiction of this state containing:
             6916          (i) the name, business address, and other contact information of its registered agent in
             6917      this state for purposes of service of process; or
             6918          (ii) the appointment of the administrator as agent of the provider for purposes of
             6919      service of process; and
             6920          (f) if the applicant is organized as a not-for-profit entity or is exempt from taxation,
             6921      evidence of not-for-profit and tax-exempt status applicable to the applicant under the Internal
             6922      Revenue Code, 26 U.S.C. Section 501.
             6923          (3) (a) The administrator may waive or reduce the insurance requirement in Subsection
             6924      13-42-105 (2)(d) if the provider does not:
             6925          (i) maintain control of a trust account or receive money paid by an individual pursuant
             6926      to a plan for distribution to creditors;
             6927          (ii) make payments to creditors on behalf of individuals;
             6928          (iii) collect fees by means of automatic payment from individuals; and
             6929          (iv) execute any powers of attorney that may be utilized by the provider to collect fees
             6930      from or expend funds on behalf of an individual.
             6931          (b) A waiver or reduction in insurance requirements allowed by the administrator under
             6932      Subsection (3)(a) shall balance the reduction in risk posed by a provider meeting the stated
             6933      requirements against any continued need for insurance against employee and director
             6934      dishonesty.
             6935          Section 219. Section 13-42-106 is amended to read:
             6936           13-42-106. Application for registration -- Required information.
             6937          An application for registration [must] shall be signed under penalty of perjury and
             6938      include:
             6939          (1) the applicant's name, principal business address and telephone number, and all
             6940      other business addresses in this state, electronic-mail addresses, and Internet website addresses;


             6941          (2) all names under which the applicant conducts business;
             6942          (3) the address of each location in this state at which the applicant will provide
             6943      debt-management services or a statement that the applicant will have no such location;
             6944          (4) the name and home address of each officer and director of the applicant and each
             6945      person that owns at least 10% of the applicant;
             6946          (5) identification of every jurisdiction in which, during the five years immediately
             6947      preceding the application:
             6948          (a) the applicant or any of its officers or directors has been licensed or registered to
             6949      provide debt-management services; or
             6950          (b) individuals have resided when they received debt-management services from the
             6951      applicant;
             6952          (6) a statement describing, to the extent it is known or should be known by the
             6953      applicant, any material civil or criminal judgment or litigation and any material administrative
             6954      or enforcement action by a governmental agency in any jurisdiction against the applicant, any
             6955      of its officers, directors, owners, or agents, or any person who is authorized to have access to
             6956      the trust account required by Section 13-42-122 ;
             6957          (7) the applicant's financial statements, audited by an accountant licensed to conduct
             6958      audits, for each of the two years immediately preceding the application or, if it has not been in
             6959      operation for the two years preceding the application, for the period of its existence;
             6960          (8) evidence of accreditation by an independent accrediting organization approved by
             6961      the administrator;
             6962          (9) evidence that, within 12 months after initial employment, each of the applicant's
             6963      counselors becomes certified as a certified counselor;
             6964          (10) a description of the three most commonly used educational programs that the
             6965      applicant provides or intends to provide to individuals who reside in this state and a copy of
             6966      any materials used or to be used in those programs;
             6967          (11) a description of the applicant's financial analysis and initial budget plan, including
             6968      any form or electronic model, used to evaluate the financial condition of individuals;
             6969          (12) a copy of each form of agreement that the applicant will use with individuals who
             6970      reside in this state;
             6971          (13) the schedule of fees and charges that the applicant will use with individuals who


             6972      reside in this state;
             6973          (14) at the applicant's expense, the results of a criminal records check, including
             6974      fingerprints, conducted within the immediately preceding 12 months, covering every officer of
             6975      the applicant and every employee or agent of the applicant who is authorized to have access to
             6976      the trust account required by Section 13-42-122 ;
             6977          (15) the names and addresses of all employers of each director during the 10 years
             6978      immediately preceding the application;
             6979          (16) a description of any ownership interest of at least 10% by a director, owner, or
             6980      employee of the applicant in:
             6981          (a) any affiliate of the applicant; or
             6982          (b) any entity that provides products or services to the applicant or any individual
             6983      relating to the applicant's debt-management services;
             6984          (17) a statement of the amount of compensation of the applicant's five most highly
             6985      compensated employees for each of the three years immediately preceding the application or, if
             6986      it has not been in operation for the three years preceding the application, for the period of its
             6987      existence;
             6988          (18) the identity of each director who is an affiliate, as defined in Subsection
             6989      13-42-102 (2)(a) or (2)(b)(i), (ii), (iv), (v), (vi), or (vii), of the applicant; and
             6990          (19) any other information that the administrator reasonably requires to perform the
             6991      administrator's duties under Section 13-42-109 .
             6992          Section 220. Section 13-42-111 is amended to read:
             6993           13-42-111. Renewal of registration.
             6994          (1) A provider [must] shall obtain a renewal of its registration annually.
             6995          (2) An application for renewal of registration as a provider [must] shall be in a form
             6996      prescribed by the administrator, signed under penalty of perjury, and:
             6997          (a) be filed no fewer than 30 and no more than 60 days before the registration expires;
             6998          (b) be accompanied by the fee established by the administrator in accordance with
             6999      Section 63J-1-504 and the bond required by Section 13-42-113 ;
             7000          (c) contain the matter required for initial registration as a provider by Subsections
             7001      13-42-106 (8) and (9) and a financial statement, audited by an accountant licensed to conduct
             7002      audits, for the applicant's fiscal year immediately preceding the application;


             7003          (d) disclose any changes in the information contained in the applicant's application for
             7004      registration or its immediately previous application for renewal, as applicable;
             7005          (e) supply evidence of insurance in an amount equal to the larger of $250,000 or the
             7006      highest daily balance in the trust account required by Section 13-42-122 during the six-month
             7007      period immediately preceding the application:
             7008          (i) against risks of dishonesty, fraud, theft, and other misconduct on the part of the
             7009      applicant or a director, employee, or agent of the applicant;
             7010          (ii) issued by an insurance company authorized to do business in this state and rated at
             7011      least A or equivalent by a nationally recognized rating organization approved by the
             7012      administrator;
             7013          (iii) with a deductible not exceeding $5,000;
             7014          (iv) payable for the benefit of the applicant, this state, and individuals who are
             7015      residents of this state, as their interests may appear; and
             7016          (v) not subject to cancellation by the applicant or the insurer until 60 days after written
             7017      notice has been given to the administrator;
             7018          (f) disclose the total amount of money received by the applicant pursuant to plans
             7019      during the preceding 12 months from or on behalf of individuals who reside in this state and
             7020      the total amount of money distributed to creditors of those individuals during that period;
             7021          (g) disclose, to the best of the applicant's knowledge, the gross amount of money
             7022      accumulated during the preceding 12 months pursuant to plans by or on behalf of individuals
             7023      who reside in this state and with whom the applicant has agreements; and
             7024          (h) provide any other information that the administrator reasonably requires to perform
             7025      the administrator's duties under this section.
             7026          (3) Except for the information required by Subsections 13-42-106 (7), (14), and (17)
             7027      and the addresses required by Subsection 13-42-106 (4), the administrator shall make the
             7028      information in an application for renewal of registration as a provider available to the public.
             7029          (4) If a registered provider files a timely and complete application for renewal of
             7030      registration, the registration remains effective until the administrator, in a record, notifies the
             7031      applicant of a denial and states the reasons for the denial.
             7032          (5) If the administrator denies an application for renewal of registration as a provider,
             7033      the applicant, within 30 days after receiving notice of the denial, may appeal and request a


             7034      hearing pursuant to Title 63G, Chapter 4, Administrative Procedures Act. Subject to Section
             7035      13-42-134 , while the appeal is pending the applicant shall continue to provide
             7036      debt-management services to individuals with whom it has agreements. If the denial is
             7037      affirmed, subject to the administrator's order and Section 13-42-134 , the applicant shall
             7038      continue to provide debt-management services to individuals with whom it has agreements
             7039      until, with the approval of the administrator, it transfers the agreements to another registered
             7040      provider or returns to the individuals all unexpended money that is under the applicant's
             7041      control.
             7042          (6) (a) The administrator may waive or reduce the insurance requirement in Subsection
             7043      13-42-111 (1)(e) if the provider does not:
             7044          (i) maintain control of a trust account or receive money paid by an individual pursuant
             7045      to a plan for distribution to creditors;
             7046          (ii) make payments to creditors on behalf of individuals;
             7047          (iii) collect fees by means of automatic payment from individuals; and
             7048          (iv) execute any powers of attorney that may be utilized by the provider to collect fees
             7049      from or expend funds on behalf of an individual.
             7050          (b) A waiver or reduction in insurance requirements allowed by the administrator under
             7051      Subsection (6)(a) shall balance the reduction in risk posed by a provider meeting the stated
             7052      requirements against any continued need for insurance against employee and director
             7053      dishonesty.
             7054          Section 221. Section 13-42-113 is amended to read:
             7055           13-42-113. Bond required.
             7056          (1) Except as otherwise provided in Section 13-42-114 , a provider that is required to be
             7057      registered under this chapter shall file a surety bond with the administrator, which [must] shall:
             7058          (a) be in effect during the period of registration and for two years after the provider
             7059      ceases providing debt-management services to individuals in this state; and
             7060          (b) run to this state for the benefit of this state and of individuals who reside in this
             7061      state when they agree to receive debt-management services from the provider, as their interests
             7062      may appear.
             7063          (2) Subject to adjustment of the dollar amount pursuant to Subsection 13-42-132 (6), a
             7064      surety bond filed pursuant to Subsection (1) [must] shall:


             7065          (a) be in the amount of $100,000;
             7066          (b) be issued by a bonding, surety, or insurance company authorized to do business in
             7067      this state and rated at least A by a nationally recognized rating organization; and
             7068          (c) have payment conditioned upon noncompliance of the provider or its agent with
             7069      this chapter.
             7070          (3) If the principal amount of a surety bond is reduced by payment of a claim or a
             7071      judgment, the provider shall immediately notify the administrator and, within 30 days after
             7072      notice by the administrator, file a new or additional surety bond in an amount to comply with
             7073      the $100,000 requirement. If for any reason a surety terminates a bond, the provider shall
             7074      immediately file a new surety bond in the amount of $100,000.
             7075          (4) The administrator or an individual may obtain satisfaction out of the surety bond
             7076      procured pursuant to this section if:
             7077          (a) the administrator assesses expenses under Subsection 13-42-132 (2)(a), issues a
             7078      final order under Subsection 13-42-133 (1)(b), or recovers a final judgment under Subsection
             7079      13-42-133 (1)(d) or (e) or Subsection 13-42-133 (4); or
             7080          (b) an individual recovers a final judgment pursuant to Subsection 13-42-135 (1),
             7081      Subsection 13-42-135 (2), or Subsection 13-42-135 (3)(a), (b), or (d).
             7082          (5) If claims against a surety bond exceed or are reasonably expected to exceed the
             7083      amount of the bond, the administrator, on the initiative of the administrator or on petition of the
             7084      surety, shall, unless the proceeds are adequate to pay all costs, judgments, and claims,
             7085      distribute the proceeds in the following order:
             7086          (a) to satisfaction of a final order or judgment under Subsection 13-42-133 (1)(a), (d),
             7087      or (e) or Subsection 13-42-133 (4);
             7088          (b) to final judgments recovered by individuals pursuant to Subsection 13-42-135 (1),
             7089      Subsection 13-42-135 (2), or Subsection 13-42-135 (3)(a), (b) or (d), pro rata;
             7090          (c) to claims of individuals established to the satisfaction of the administrator, pro rata;
             7091      and
             7092          (d) if a final order or judgment is issued under Subsection 13-42-133 (1), to the
             7093      expenses charged pursuant to Subsection 13-42-132 (2)(a).
             7094          Section 222. Section 13-42-117 is amended to read:
             7095           13-42-117. Prerequisites for providing debt-management services.


             7096          (1) Before providing debt-management services, a registered provider shall give the
             7097      individual an itemized list of goods and services and the charges for each. The list [must] shall
             7098      be clear and conspicuous, be in a record the individual may keep whether or not the individual
             7099      assents to an agreement, and describe the goods and services the provider offers:
             7100          (a) free of additional charge if the individual enters into an agreement;
             7101          (b) for a charge if the individual does not enter into an agreement; and
             7102          (c) for a charge if the individual enters into an agreement, using the following
             7103      terminology, as applicable, and format:
             7104              Set-up fee _________________________________________________
             7105                              dollar amount of fee
             7106              Monthly service fee __________________________________________
             7107                          dollar amount of fee or method of determining amount
             7108              Settlement fee ______________________________________________
             7109                          dollar amount of fee or method of determining amount
             7110              Goods and services in addition to those provided in connection with a plan:
             7111              _____________ ____________________________________________
             7112                  (item) dollar amount or method of determining amount
             7113              _____________ ____________________________________________
             7114                  (item) dollar amount or method of determining amount.
             7115          (2) A provider may not furnish debt-management services unless the provider, through
             7116      the services of a certified counselor:
             7117          (a) provides the individual with reasonable education about the management of
             7118      personal finance;
             7119          (b) has prepared a financial analysis; and
             7120          (c) if the individual is to make regular, periodic payments to a creditor or a provider:
             7121          (i) has prepared a plan for the individual;
             7122          (ii) has made a determination, based on the provider's analysis of the information
             7123      provided by the individual and otherwise available to it, that the plan is suitable for the
             7124      individual and the individual will be able to meet the payment obligations under the plan; and
             7125          (iii) believes that each creditor of the individual listed as a participating creditor in the
             7126      plan will accept payment of the individual's debts as provided in the plan.


             7127          (3) Before an individual assents to an agreement to engage in a plan, a provider shall:
             7128          (a) provide the individual with a copy of the analysis and plan required by Subsection
             7129      (2) in a record that identifies the provider and that the individual may keep whether or not the
             7130      individual assents to the agreement;
             7131          (b) inform the individual of the availability, at the individual's option, of assistance by
             7132      a toll-free communication system or in person to discuss the financial analysis and plan
             7133      required by Subsection (2); and
             7134          (c) with respect to all creditors identified by the individual or otherwise known by the
             7135      provider to be creditors of the individual, provide the individual with a list of:
             7136          (i) creditors that the provider expects to participate in the plan and grant concessions;
             7137          (ii) creditors that the provider expects to participate in the plan but not grant
             7138      concessions;
             7139          (iii) creditors that the provider expects not to participate in the plan; and
             7140          (iv) all other creditors.
             7141          (4) Before an individual assents to an agreement, the provider shall inform the
             7142      individual, in a record that contains nothing else, that is given separately, and that the
             7143      individual may keep whether or not the individual assents to the agreement:
             7144          (a) of the name and business address of the provider;
             7145          (b) that plans are not suitable for all individuals and the individual may ask the
             7146      provider about other ways, including bankruptcy, to deal with indebtedness;
             7147          (c) that establishment of a plan may adversely affect the individual's credit rating or
             7148      credit scores;
             7149          (d) that nonpayment of debt may lead creditors to increase finance and other charges or
             7150      undertake collection activity, including litigation;
             7151          (e) unless it is not true, that the provider may receive compensation from the creditors
             7152      of the individual; and
             7153          (f) that, unless the individual is insolvent, if a creditor settles for less than the full
             7154      amount of the debt, the plan may result in the creation of taxable income to the individual, even
             7155      though the individual does not receive any money.
             7156          (5) If a provider may receive payments from an individual's creditors and the plan
             7157      contemplates that the individual's creditors will reduce finance charges or fees for late payment,


             7158      default, or delinquency, the provider may comply with Subsection (4) by providing the
             7159      following disclosure, surrounded by black lines:
             7160     
IMPORTANT INFORMATION FOR YOU TO CONSIDER

             7161          (1) Debt-management plans are not right for all individuals, and you may ask us to
             7162      provide information about other ways, including bankruptcy, to deal with your debts.
             7163          (2) Using a debt-management plan may make it harder for you to obtain credit.
             7164          (3) We may receive compensation for our services from your creditors.
             7165     
_______________________________________

             7166     
Name and business address of provider

             7167          (6) If a provider will not receive payments from an individual's creditors and the plan
             7168      contemplates that the individual's creditors will reduce finance charges or fees for late payment,
             7169      default, or delinquency, a provider may comply with Subsection (4) by providing the following
             7170      disclosure, surrounded by black lines:
             7171     
IMPORTANT INFORMATION FOR YOU TO CONSIDER

             7172          (1) Debt-management plans are not right for all individuals, and you may ask us to
             7173      provide information about other ways, including bankruptcy, to deal with your debts.
             7174          (2) Using a debt-management plan may make it harder for you to obtain credit.
             7175     
______________________________________

             7176     
Name and business address of provider

             7177          (7) If an agreement contemplates that creditors will settle debts for less than the full
             7178      principal amount of debt owed, a provider may comply with Subsection (4) by providing the
             7179      following disclosure, surrounded by black lines:
             7180     
IMPORTANT INFORMATION FOR YOU TO CONSIDER

             7181          (1) Our program is not right for all individuals, and you may ask us to provide
             7182      information about bankruptcy and other ways to deal with your debts.
             7183          (2) Nonpayment of your debts under our program may
             7184          hurt your credit rating or credit scores;
             7185          lead your creditors to increase finance and other charges; and
             7186          lead your creditors to undertake activity, including lawsuits, to collect the debts.
             7187          (3) Reduction of debt under our program may result in taxable income to you, even
             7188      though you will not actually receive any money.


             7189     
_________________________________________

             7190     
Name and business address of provider

             7191          Section 223. Section 13-42-118 is amended to read:
             7192           13-42-118. Communication by electronic or other means.
             7193          (1) In this section:
             7194          (a) "Consumer" means an individual who seeks or obtains goods or services that are
             7195      used primarily for personal, family, or household purposes.
             7196          (b) "Federal act" means the Electronic Signatures in Global and National Commerce
             7197      Act, 15 U.S.C. Section 7001 et seq.
             7198          (2) A provider may satisfy the requirements of Section 13-42-117 , 13-42-119 , or
             7199      13-42-127 by means of the Internet or other electronic means if the provider obtains a
             7200      consumer's consent in the manner provided by Section 101(c)(1) of the federal act.
             7201          (3) The disclosures and materials required by Sections 13-42-117 , 13-42-119 , and
             7202      13-42-127 shall be presented in a form that is capable of being accurately reproduced for later
             7203      reference.
             7204          (4) With respect to disclosure by means of an Internet website, the disclosure of the
             7205      information required by Subsection 13-42-117 (4) [must] shall appear on one or more screens
             7206      that:
             7207          (a) contain no other information; and
             7208          (b) the individual [must] is able to see before proceeding to assent to formation of an
             7209      agreement.
             7210          (5) At the time of providing the materials and agreement required by Subsections
             7211      13-42-117 (3) and (4), Section 13-42-119 , and Section 13-42-127 , a provider shall inform the
             7212      individual that upon electronic, telephonic, or written request, it will send the individual a
             7213      written copy of the materials, and shall comply with a request as provided in Subsection (6).
             7214          (6) If a provider is requested, before the expiration of 90 days after an agreement is
             7215      completed or terminated, to send a written copy of the materials required by Subsections
             7216      13-42-117 (3) and (4), Section 13-42-119 , or Section 13-42-127 , the provider shall send them at
             7217      no charge within three business days after the request, but the provider need not comply with a
             7218      request more than once per calendar month or if it reasonably believes the request is made for
             7219      purposes of harassment. If a request is made more than 90 days after an agreement is


             7220      completed or terminated, the provider shall send within a reasonable time a written copy of the
             7221      materials requested.
             7222          (7) A provider that maintains an Internet website shall disclose on the home page of its
             7223      website or on a page that is clearly and conspicuously connected to the home page by a link
             7224      that clearly reveals its contents:
             7225          (a) its name and all names under which it does business;
             7226          (b) its principal business address, telephone number, and electronic-mail address, if
             7227      any; and
             7228          (c) the names of its principal officers.
             7229          (8) Subject to Subsection (9), if a consumer who has consented to electronic
             7230      communication in the manner provided by Section 101 of the federal act withdraws consent as
             7231      provided in the federal act, a provider may terminate its agreement with the consumer.
             7232          (9) If a provider wishes to terminate an agreement with a consumer pursuant to
             7233      Subsection (8), it shall notify the consumer that it will terminate the agreement unless the
             7234      consumer, within 30 days after receiving the notification, consents to electronic communication
             7235      in the manner provided in Section 101(c) of the federal act. If the consumer consents, the
             7236      provider may terminate the agreement only as permitted by Subsection 13-42-119 (1)(f)(vii).
             7237          Section 224. Section 13-42-119 is amended to read:
             7238           13-42-119. Form and contents of agreement.
             7239          (1) An agreement [must] shall:
             7240          (a) be in a record;
             7241          (b) be dated and signed by the provider and the individual;
             7242          (c) include the name of the individual and the address where the individual resides;
             7243          (d) include the name, business address, and telephone number of the provider;
             7244          (e) be delivered to the individual immediately upon formation of the agreement; and
             7245          (f) disclose:
             7246          (i) the services to be provided;
             7247          (ii) the amount, or method of determining the amount, of all fees, individually
             7248      itemized, to be paid by the individual;
             7249          (iii) the schedule of payments to be made by or on behalf of the individual, including
             7250      the amount of each payment, the date on which each payment is due, and an estimate of the


             7251      date of the final payment;
             7252          (iv) if a plan provides for regular periodic payments to creditors:
             7253          (A) each creditor of the individual to which payment will be made, the amount owed to
             7254      each creditor, and any concessions the provider reasonably believes each creditor will offer;
             7255      and
             7256          (B) the schedule of expected payments to each creditor, including the amount of each
             7257      payment and the date on which it will be made;
             7258          (v) each creditor that the provider believes will not participate in the plan and to which
             7259      the provider will not direct payment;
             7260          (vi) how the provider will comply with its obligations under Subsection 13-42-127 (1);
             7261          (vii) that the provider may terminate the agreement for good cause, upon return of
             7262      unexpended money of the individual;
             7263          (viii) that the individual may cancel the agreement as provided in Section 13-42-120 ;
             7264          (ix) that the individual may contact the administrator with any questions or complaints
             7265      regarding the provider; and
             7266          (x) the address, telephone number, and Internet address or website of the administrator.
             7267          (2) For purposes of Subsection (1)(e), delivery of an electronic record occurs when it is
             7268      made available in a format in which the individual may retrieve, save, and print it and the
             7269      individual is notified that it is available.
             7270          (3) If the administrator supplies the provider with any information required under
             7271      Subsection (1)(f)(x), the provider may comply with that requirement only by disclosing the
             7272      information supplied by the administrator.
             7273          (4) An agreement [must] shall provide that:
             7274          (a) the individual has a right to terminate the agreement at any time, without penalty or
             7275      obligation, by giving the provider written or electronic notice, in which event:
             7276          (i) the provider will refund all unexpended money that the provider or its agent has
             7277      received from or on behalf of the individual for the reduction or satisfaction of the individual's
             7278      debt;
             7279          (ii) with respect to an agreement that contemplates that creditors will settle debts for
             7280      less than the principal amount of debt, the provider will refund 65% of any portion of the
             7281      set-up fee that has not been credited against the settlement fee; and


             7282          (iii) all powers of attorney granted by the individual to the provider are revoked and
             7283      ineffective;
             7284          (b) the individual authorizes any bank in which the provider or its agent has established
             7285      a trust account to disclose to the administrator any financial records relating to the trust
             7286      account; and
             7287          (c) the provider will notify the individual within five days after learning of a creditor's
             7288      final decision to reject or withdraw from a plan and that this notice will include:
             7289          (i) the identity of the creditor; and
             7290          (ii) the right of the individual to modify or terminate the agreement.
             7291          (5) An agreement may confer on a provider a power of attorney to settle the
             7292      individual's debt for no more than 50% of the principal amount of the debt. An agreement may
             7293      not confer a power of attorney to settle a debt for more than 50% of that amount, but may
             7294      confer a power of attorney to negotiate with creditors of the individual on behalf of the
             7295      individual. An agreement [must] shall provide that the provider will obtain the assent of the
             7296      individual after a creditor has assented to a settlement for more than 50% of the principal
             7297      amount of the debt.
             7298          (6) An agreement may not:
             7299          (a) provide for application of the law of any jurisdiction other than the United States
             7300      and this state;
             7301          (b) except as permitted by Section 2 of the Federal Arbitration Act, 9 U.S.C. Section 2,
             7302      or Title 78B, Chapter 11, Utah Uniform Arbitration Act, contain a provision that modifies or
             7303      limits otherwise available forums or procedural rights, including the right to trial by jury, that
             7304      are generally available to the individual under law other than this chapter;
             7305          (c) contain a provision that restricts the individual's remedies under this chapter or law
             7306      other than this chapter; or
             7307          (d) contain a provision that:
             7308          (i) limits or releases the liability of any person for not performing the agreement or for
             7309      violating this chapter; or
             7310          (ii) indemnifies any person for liability arising under the agreement or this chapter.
             7311          (7) All rights and obligations specified in Subsection (4) and Section 13-42-120 exist
             7312      even if not provided in the agreement. A provision in an agreement which violates Subsection


             7313      (4), (5), or (6) is void.
             7314          Section 225. Section 13-42-120 is amended to read:
             7315           13-42-120. Cancellation of agreement -- Waiver.
             7316          (1) An individual may cancel an agreement before midnight of the third business day
             7317      after the individual assents to it, unless the agreement does not comply with Subsection (2) or
             7318      Section 13-42-119 or Section 13-42-128 , in which event the individual may cancel the
             7319      agreement within 30 days after the individual assents to it. To exercise the right to cancel, the
             7320      individual [must] shall give notice in a record to the provider. Notice by mail is given when
             7321      mailed.
             7322          (2) An agreement [must] shall be accompanied by a form that contains in bold-face
             7323      type, surrounded by bold black lines:
             7324     
Notice of Right to Cancel

             7325          You may cancel this agreement, without any penalty or obligation, at any time before
             7326      midnight of the third business day that begins the day after you agree to it by electronic
             7327      communication or by signing it.
             7328          To cancel this agreement during this period, send an e-mail to
             7329          ____________________________ or mail or deliver a signed, dated copy of this
             7330          E-mail address of provider
             7331          notice, or any other written notice to ___________________________________
             7332                                  Name of provider
             7333          at _______________________________ before midnight on ___________________.
             7334              Address of provider                         Date
             7335          If you cancel this agreement within the 3-day period, we will refund all money you
             7336      already have paid us.
             7337          You also may terminate this agreement at any later time, but we may not be required to
             7338      refund fees you have paid us.
             7339          I cancel this agreement,
             7340          __________________________________
             7341                  Print your name
             7342          __________________________________
             7343                  Signature


             7344          __________________________________
             7345                   Date
             7346          (3) If a personal financial emergency necessitates the disbursement of an individual's
             7347      money to one or more of the individual's creditors before the expiration of three days after an
             7348      agreement is signed, an individual may waive the right to cancel. To waive the right, the
             7349      individual [must] shall send or deliver a signed, dated statement in the individual's own words
             7350      describing the circumstances that necessitate a waiver. The waiver [must] shall explicitly
             7351      waive the right to cancel. A waiver by means of a standard form record is void.
             7352          Section 226. Section 13-42-121 is amended to read:
             7353           13-42-121. Required language.
             7354          Unless the administrator, by rule, provides otherwise, the disclosures and documents
             7355      required by this chapter [must] shall be in English. If a provider communicates with an
             7356      individual primarily in a language other than English, the provider [must] shall furnish a
             7357      translation into the other language of the disclosures and documents required by this chapter.
             7358          Section 227. Section 13-42-122 is amended to read:
             7359           13-42-122. Trust account.
             7360          (1) All money paid to a provider by or on behalf of an individual for distribution to
             7361      creditors pursuant to a plan is held in trust. Within two business days after receipt, the provider
             7362      shall deposit the money in a trust account established for the benefit of individuals to whom the
             7363      provider is furnishing debt-management services.
             7364          (2) Money held in trust by a provider is not property of the provider or its designee.
             7365      The money is not available to creditors of the provider or designee, except an individual from
             7366      whom or on whose behalf the provider received money, to the extent that the money has not
             7367      been disbursed to creditors of the individual.
             7368          (3) A provider shall:
             7369          (a) maintain separate records of account for each individual to whom the provider is
             7370      furnishing debt-management services;
             7371          (b) disburse money paid by or on behalf of the individual to creditors of the individual
             7372      as disclosed in the agreement, except that:
             7373          (i) the provider may delay payment to the extent that a payment by the individual is not
             7374      final; and


             7375          (ii) if a plan provides for regular periodic payments to creditors, the disbursement
             7376      [must] shall comply with the due dates established by each creditor; and
             7377          (c) promptly correct any payments that are not made or that are misdirected as a result
             7378      of an error by the provider or other person in control of the trust account and reimburse the
             7379      individual for any costs or fees imposed by a creditor as a result of the failure to pay or
             7380      misdirection.
             7381          (4) A provider may not commingle money in a trust account established for the benefit
             7382      of individuals to whom the provider is furnishing debt-management services with money of
             7383      other persons.
             7384          (5) A trust account [must] shall at all times have a cash balance equal to the sum of the
             7385      balances of each individual's account.
             7386          (6) If a provider has established a trust account pursuant to Subsection (1), the provider
             7387      shall reconcile the trust account at least once a month. The reconciliation [must] shall compare
             7388      the cash balance in the trust account with the sum of the balances in each individual's account.
             7389      If the provider or its designee has more than one trust account, each trust account [must] shall
             7390      be individually reconciled.
             7391          (7) If a provider discovers, or has a reasonable suspicion of, embezzlement or other
             7392      unlawful appropriation of money held in trust, the provider immediately shall notify the
             7393      administrator by a method approved by the administrator. Unless the administrator by rule
             7394      provides otherwise, within five days thereafter, the provider shall give notice to the
             7395      administrator describing the remedial action taken or to be taken.
             7396          (8) If an individual terminates an agreement or it becomes reasonably apparent to a
             7397      provider that a plan has failed, the provider shall promptly refund to the individual all money
             7398      paid by or on behalf of the individual which has not been paid to creditors, less fees that are
             7399      payable to the provider under Section 13-42-123 .
             7400          (9) Before relocating a trust account from one bank to another, a provider shall inform
             7401      the administrator of the name, business address, and telephone number of the new bank. As
             7402      soon as practicable, the provider shall inform the administrator of the account number of the
             7403      trust account at the new bank.
             7404          Section 228. Section 13-42-132 is amended to read:
             7405           13-42-132. Powers of administrator.


             7406          (1) The administrator may act on its own initiative or in response to complaints and
             7407      may receive complaints, take action to obtain voluntary compliance with this chapter, refer
             7408      cases to the attorney general, and seek or provide remedies as provided in this chapter.
             7409          (2) The administrator may investigate and examine, in this state or elsewhere, by
             7410      subpoena or otherwise, the activities, books, accounts, and records of a person that provides or
             7411      offers to provide debt-management services, or a person to which a provider has delegated its
             7412      obligations under an agreement or this chapter, to determine compliance with this chapter.
             7413      Information that identifies individuals who have agreements with the provider [shall not] may
             7414      not be disclosed to the public. In connection with the investigation, the administrator may:
             7415          (a) charge the person the reasonable expenses necessarily incurred to conduct the
             7416      examination;
             7417          (b) require or permit a person to file a statement under oath as to all the facts and
             7418      circumstances of a matter to be investigated; and
             7419          (c) seek a court order authorizing seizure from a bank at which the person maintains a
             7420      trust account required by Section 13-42-122 , any or all money, books, records, accounts, and
             7421      other property of the provider that is in the control of the bank and relates to individuals who
             7422      reside in this state.
             7423          (3) The administrator may adopt rules to implement the provisions of this chapter in
             7424      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             7425          (4) The administrator may enter into cooperative arrangements with any other federal
             7426      or state agency having authority over providers and may exchange with any of those agencies
             7427      information about a provider, including information obtained during an examination of the
             7428      provider.
             7429          (5) The administrator shall establish fees in accordance with Section 63J-1-504 to be
             7430      paid by providers for the expense of administering this chapter.
             7431          (6) The administrator, by rule, shall adopt dollar amounts instead of those specified in
             7432      Sections 13-42-102 , 13-42-105 , 13-42-109 , 13-42-113 , 13-42-123 , 13-42-133 , and 13-42-135
             7433      to reflect inflation, as measured by the United States Bureau of Labor Statistics Consumer
             7434      Price Index for All Urban Consumers or, if that index is not available, another index adopted
             7435      by rule by the administrator. The administrator shall adopt a base year and adjust the dollar
             7436      amounts, effective on July 1 of each year, if the change in the index from the base year, as of


             7437      December 31 of the preceding year, is at least 10%. The dollar amount [must] shall be rounded
             7438      to the nearest $100, except that the amounts in Section 13-42-123 [must] shall be rounded to
             7439      the nearest dollar.
             7440          (7) The administrator shall notify registered providers of any change in dollar amounts
             7441      made pursuant to Subsection (6) and make that information available to the public.
             7442          Section 229. Section 13-42-137 is amended to read:
             7443           13-42-137. Statute of limitations.
             7444          (1) An action or proceeding brought pursuant to Subsection 13-42-133 (1), (2), or (3)
             7445      [must] shall be commenced within four years after the conduct that is the basis of the
             7446      administrator's complaint.
             7447          (2) An action brought pursuant to Section 13-42-135 [must] shall be commenced
             7448      within two years after the latest of:
             7449          (a) the individual's last transmission of money to a provider;
             7450          (b) the individual's last transmission of money to a creditor at the direction of the
             7451      provider;
             7452          (c) the provider's last disbursement to a creditor of the individual;
             7453          (d) the provider's last accounting to the individual pursuant to Subsection
             7454      13-42-127 (1);
             7455          (e) the date on which the individual discovered or reasonably should have discovered
             7456      the facts giving rise to the individual's claim; or
             7457          (f) termination of actions or proceedings by the administrator with respect to a
             7458      violation of the chapter.
             7459          (3) The period prescribed in Subsection (2)(e) is tolled during any period during which
             7460      the provider or, if different, the defendant has materially and willfully misrepresented
             7461      information required by this chapter to be disclosed to the individual, if the information so
             7462      misrepresented is material to the establishment of the liability of the defendant under this
             7463      chapter.
             7464          Section 230. Section 13-42-138 is amended to read:
             7465           13-42-138. Uniformity of application and construction.
             7466          In applying and construing this uniform act, consideration [must] shall be given to the
             7467      need to promote uniformity of the law with respect to its subject matter among states that enact


             7468      it.
             7469          Section 231. Section 14-1-20 is amended to read:
             7470           14-1-20. Preliminary notice requirement.
             7471          (1) Any person furnishing labor, service, equipment, or material for which a payment
             7472      bond claim may be made under this chapter shall provide preliminary notice to the designated
             7473      agent as prescribed by Section 38-1-32 , except that this section does not apply:
             7474          (a) to a person performing labor for wages; or
             7475          (b) if a notice of commencement is not filed as prescribed in Section 38-1-31 for the
             7476      project or improvement for which labor, service, equipment, or material is furnished.
             7477          (2) Any person who fails to provide the preliminary notice required by Subsection (1)
             7478      may not make a payment bond claim under this chapter.
             7479          (3) The preliminary notice required by Subsection (1) [must] shall be provided prior to
             7480      commencement of any action on the payment bond.
             7481          Section 232. Section 14-2-5 is amended to read:
             7482           14-2-5. Preliminary notice requirement.
             7483          (1) Any person furnishing labor, service, equipment, or material for which a payment
             7484      bond claim may be made under this chapter shall provide preliminary notice to the designated
             7485      agent as prescribed by Section 38-1-32 , except that this section does not apply:
             7486          (a) to a person performing labor for wages; or
             7487          (b) if a notice of commencement is not filed as prescribed in Section 38-1-31 for the
             7488      project or improvement for which labor, service, equipment, or material is furnished.
             7489          (2) Any person who fails to provide the preliminary notice required by Subsection (1)
             7490      may not make a payment bond claim under this chapter.
             7491          (3) The preliminary notice required by Subsection (1) [must] shall be provided prior to
             7492      commencement of any action on the payment bond.
             7493          Section 233. Section 15-2-5 is amended to read:
             7494           15-2-5. Blood donation by minor.
             7495          Notwithstanding any other provision of the law, any minor who has reached the age of
             7496      18 years may give consent to the donation of his blood and to the necessary medical procedures
             7497      to accomplish such donation. Consent [shall not] may not be subject to disaffirmance because
             7498      of minority. The consent of the parent or parents of a minor [shall not be] is not necessary in


             7499      order to authorize the donation of blood and such medical procedures.
             7500          Section 234. Section 15-3-4 is amended to read:
             7501           15-3-4. Effective date of chapter.
             7502          This chapter [shall not] does not apply to conveyances, releases, sales or contracts made
             7503      prior to July 1, 1929.
             7504          Section 235. Section 15-4-2 is amended to read:
             7505           15-4-2. Discharge of co-obligors by judgment.
             7506          A judgment against one or more of several obligors, or against one or more of joint or
             7507      of joint and several obligors, [shall not] may not discharge a co-obligor who was not a party to
             7508      the proceeding wherein the judgment was rendered.
             7509          Section 236. Section 15-4-4 is amended to read:
             7510           15-4-4. Release of co-obligor -- Reservation of rights.
             7511          Subject to the provisions of Section 15-4-3 , the obligee's release or discharge of one or
             7512      more of several obligors, or of one or more of joint or of joint and several obligors, [shall not]
             7513      does not discharge co-obligors against whom the obligee in writing and as part of the same
             7514      transaction as the release or discharge expressly reserves his rights; and in the absence of such
             7515      a reservation of rights shall discharge co-obligors only to the extent provided in Section 15-4-5 .
             7516          Section 237. Section 15-4-7 is amended to read:
             7517           15-4-7. Effective date of chapter.
             7518          This chapter [shall not] does not apply to obligations arising prior to July 1, 1929.
             7519          Section 238. Section 15-9-105 is amended to read:
             7520           15-9-105. Registration as an athlete agent -- Form -- Requirements.
             7521          (1) An applicant for registration shall submit an application for registration to the
             7522      division in a form prescribed by the division. An application filed under this section is a public
             7523      record under Title 63G, Chapter 2, Government Records Access and Management Act. The
             7524      application [must] shall be in the name of an individual and, except as otherwise provided in
             7525      Subsection (2), signed or otherwise authenticated by the applicant under penalty of perjury and
             7526      state or contain:
             7527          (a) the name of the applicant and the address of the applicant's principal place of
             7528      business;
             7529          (b) the name of the applicant's business or employer, if applicable;


             7530          (c) any business or occupation engaged in by the applicant for the five years
             7531      immediately preceding the date of submission of the application;
             7532          (d) a description of the applicant's:
             7533          (i) formal training as an athlete agent;
             7534          (ii) practical experience as an athlete agent; and
             7535          (iii) educational background relating to the applicant's activities as an athlete agent;
             7536          (e) the names and addresses of three individuals not related to the applicant who are
             7537      willing to serve as references;
             7538          (f) the name, sport, and last-known team for each individual for whom the applicant
             7539      acted as an athlete agent during the five years next preceding the date of submission of the
             7540      application;
             7541          (g) the names and addresses of all persons who are:
             7542          (i) with respect to the athlete agent's business if it is not a corporation, the partners,
             7543      members, officers, managers, associates, or profit-sharers of the business; and
             7544          (ii) with respect to a corporation employing the athlete agent, the officers, directors,
             7545      and any shareholder of the corporation having an interest of 5% or greater;
             7546          (h) whether the applicant or any person named pursuant to Subsection (1)(g) has been
             7547      convicted of a crime that, if committed in this state, would be a crime involving moral
             7548      turpitude or a felony, and identify the crime;
             7549          (i) whether there has been any administrative or judicial determination that the
             7550      applicant or any person named pursuant to Subsection (1)(g) has made a false, misleading,
             7551      deceptive, or fraudulent representation;
             7552          (j) any instance in which the conduct of the applicant or any person named pursuant to
             7553      Subsection (1)(g) resulted in the imposition of a sanction, suspension, or declaration of
             7554      ineligibility to participate in an interscholastic or intercollegiate athletic event on a
             7555      student-athlete or educational institution;
             7556          (k) any sanction, suspension, or disciplinary action taken against the applicant or any
             7557      person named pursuant to Subsection (1)(g) arising out of occupational or professional
             7558      conduct; and
             7559          (l) whether there has been any denial of an application for, suspension or revocation of,
             7560      or refusal to renew, the registration or licensure of the applicant or any person named pursuant


             7561      to Subsection (1)(g) as an athlete agent in any state.
             7562          (2) An individual who has submitted an application for, and holds a certificate of,
             7563      registration or licensure as an athlete agent in another state, may submit a copy of the
             7564      application and certificate in lieu of submitting an application in the form prescribed pursuant
             7565      to Subsection (1). The division shall accept the application and the certificate from the other
             7566      state as an application for registration in this state if the application to the other state:
             7567          (a) was submitted in the other state within six months immediately preceding the
             7568      submission of the application in this state and the applicant certifies that the information
             7569      contained in the application is current;
             7570          (b) contains information substantially similar to or more comprehensive than that
             7571      required in an application submitted in this state; and
             7572          (c) was signed by the applicant under penalty of perjury.
             7573          Section 239. Section 15-9-106 is amended to read:
             7574           15-9-106. Certificate of registration -- Issuance or denial -- Renewal.
             7575          (1) Except as otherwise provided in Subsection (2), the division shall issue a certificate
             7576      of registration to an individual who complies with Subsection 15-9-105 (1) or whose
             7577      application has been accepted under Subsection 15-9-105 (2).
             7578          (2) The division may refuse to issue a certificate of registration if the division
             7579      determines that the applicant has engaged in conduct that has a significant adverse effect on the
             7580      applicant's fitness to act as an athlete agent. In making the determination, the division may
             7581      consider whether the applicant has:
             7582          (a) been convicted of a crime that, if committed in this state, would be a crime
             7583      involving moral turpitude or a felony;
             7584          (b) made a materially false, misleading, deceptive, or fraudulent representation in the
             7585      application or as an athlete agent;
             7586          (c) engaged in conduct that would disqualify the applicant from serving in a fiduciary
             7587      capacity;
             7588          (d) engaged in conduct prohibited by Section 15-9-114 ;
             7589          (e) had a registration or licensure as an athlete agent suspended, revoked, or denied or
             7590      been refused renewal of registration or licensure as an athlete agent in any state;
             7591          (f) engaged in conduct the consequence of which was that a sanction, suspension, or


             7592      declaration of ineligibility to participate in an interscholastic or intercollegiate athletic event
             7593      was imposed on a student-athlete or educational institution; or
             7594          (g) engaged in conduct that significantly, adversely reflects on the applicant's
             7595      credibility, honesty, or integrity.
             7596          (3) In making a determination under Subsection (2), the division shall consider:
             7597          (a) how recently the conduct occurred;
             7598          (b) the nature of the conduct and the context in which it occurred; and
             7599          (c) any other relevant conduct of the applicant.
             7600          (4) An athlete agent may apply to renew a registration by submitting an application for
             7601      renewal in a form prescribed by the division. An application filed under this section is a public
             7602      record under Title 63G, Chapter 2, Government Records Access and Management Act. The
             7603      application for renewal [must] shall be signed by the applicant under penalty of perjury and
             7604      [must] shall contain current information on all matters required in an original registration.
             7605          (5) An individual who has submitted an application for renewal of registration or
             7606      licensure in another state, in lieu of submitting an application for renewal in the form
             7607      prescribed pursuant to Subsection (4), may file a copy of the application for renewal and a valid
             7608      certificate of registration or licensure from the other state. The division shall accept the
             7609      application for renewal from the other state as an application for renewal in this state if the
             7610      application to the other state:
             7611          (a) was submitted in the other state within six months immediately preceding the filing
             7612      in this state and the applicant certifies the information contained in the application for renewal
             7613      is current;
             7614          (b) contains information substantially similar to or more comprehensive than that
             7615      required in an application for renewal submitted in this state; and
             7616          (c) was signed by the applicant under penalty of perjury.
             7617          (6) A certificate of registration or a renewal of a registration is valid for two years.
             7618          Section 240. Section 15-9-109 is amended to read:
             7619           15-9-109. Registration and renewal fees.
             7620          (1) An application for registration or renewal of registration [must] shall be
             7621      accompanied by a fee in an amount determined by the division in accordance with Section
             7622      63J-1-504 .


             7623          (2) The division shall establish fees for:
             7624          (a) an initial application for registration;
             7625          (b) an application for registration based upon a certificate of registration or licensure
             7626      issued by another state;
             7627          (c) an application for renewal of registration; and
             7628          (d) an application for renewal of registration based upon an application for renewal of
             7629      registration or licensure submitted in another state.
             7630          Section 241. Section 15-9-110 is amended to read:
             7631           15-9-110. Required form of contract.
             7632          (1) An agency contract [must] shall be in a record, signed or otherwise authenticated by
             7633      the parties.
             7634          (2) An agency contract [must] shall state or contain:
             7635          (a) the amount and method of calculating the consideration to be paid by the
             7636      student-athlete for services to be provided by the athlete agent under the contract and any other
             7637      consideration the athlete agent has received or will receive from any other source for entering
             7638      into the contract or for providing the services;
             7639          (b) the name of any person not listed in the application for registration or renewal of
             7640      registration who will be compensated because the student-athlete signed the agency contract;
             7641          (c) a description of any expenses that the student-athlete agrees to reimburse;
             7642          (d) a description of the services to be provided to the student-athlete;
             7643          (e) the duration of the contract; and
             7644          (f) the date of execution.
             7645          (3) An agency contract [must] shall contain, in close proximity to the signature of the
             7646      student-athlete, a conspicuous notice in boldface type in capital letters stating:
             7647          WARNING TO STUDENT-ATHLETE
             7648          IF YOU SIGN THIS CONTRACT:
             7649          (1) YOU MAY LOSE YOUR ELIGIBILITY TO COMPETE AS A
             7650      STUDENT-ATHLETE IN YOUR SPORT;
             7651          (2) IF YOU HAVE AN ATHLETIC DIRECTOR, WITHIN 72 HOURS AFTER
             7652      ENTERING INTO THIS CONTRACT, BOTH YOU AND YOUR ATHLETE AGENT
             7653      [MUST] SHALL NOTIFY YOUR ATHLETIC DIRECTOR; AND


             7654          (3) YOU MAY CANCEL THIS CONTRACT WITHIN 14 DAYS AFTER SIGNING
             7655      IT. CANCELLATION OF THIS CONTRACT MAY NOT REINSTATE YOUR
             7656      ELIGIBILITY.
             7657          (4) An agency contract that does not conform to this section is voidable by the
             7658      student-athlete. If a student-athlete voids an agency contract, the student-athlete is not required
             7659      to pay any consideration under the contract or to return any consideration received from the
             7660      athlete agent to induce the student-athlete to enter into the contract.
             7661          (5) The athlete agent shall give a record of the signed or otherwise authenticated
             7662      agency contract to the student-athlete at the time of execution.
             7663          Section 242. Section 15-9-118 is amended to read:
             7664           15-9-118. Uniformity of application and construction.
             7665          In applying and construing this uniform act, consideration [must] shall be given to the
             7666      need to promote uniformity of the law with respect to its subject matter among states that enact
             7667      it.
             7668          Section 243. Section 16-6a-709 is amended to read:
             7669           16-6a-709. Action by written ballot.
             7670          (1) Unless otherwise provided by the bylaws, any action that may be taken at any
             7671      annual, regular, or special meeting of members may be taken without a meeting if the nonprofit
             7672      corporation delivers a written ballot to every member entitled to vote on the matter.
             7673          (2) A written ballot described in Subsection (1) shall:
             7674          (a) set forth each proposed action; and
             7675          (b) provide an opportunity to vote for or against each proposed action.
             7676          (3) (a) Approval by written ballot pursuant to this section shall be valid only when:
             7677          (i) the time, as determined under Subsection (8), by which all ballots must be received
             7678      by the nonprofit corporation has passed so that a quorum can be determined; and
             7679          (ii) the number of approvals equals or exceeds the number of votes that would be
             7680      required to approve the matter at a meeting at which the total number of votes cast was the
             7681      same as the number of votes cast by ballot.
             7682          (b) Unless otherwise provided in this chapter or in accordance with Section 16-6a-716 ,
             7683      for purposes of taking action by written ballot the number of votes cast by written ballot
             7684      pursuant to this section constitute a quorum for action on the matter.


             7685          (4) All solicitations for votes by written ballot shall:
             7686          (a) indicate the number of responses needed to meet the quorum requirements;
             7687          (b) state the percentage of approvals necessary to approve each matter other than
             7688      election of directors;
             7689          (c) specify the time by which a ballot must be received by the nonprofit corporation in
             7690      order to be counted; and
             7691          (d) be accompanied by written information sufficient to permit each person casting the
             7692      ballot to reach an informed decision on the matter.
             7693          (5) Unless otherwise provided by the bylaws, a written ballot may not be revoked.
             7694          (6) Action taken under this section has the same effect as action taken at a meeting of
             7695      members and may be described as such in any document.
             7696          (7) Unless otherwise provided by the bylaws, a written ballot delivered to every
             7697      member entitled to vote on the matter or matters therein, as described in this section, may also
             7698      be used in connection with any annual, regular, or special meeting of members, thereby
             7699      allowing members the choice of either voting in person or by written ballot delivered by a
             7700      member to the nonprofit corporation in lieu of attendance at such meeting. Any written ballot
             7701      shall comply with the requirements of Subsection (2) and shall be counted equally with the
             7702      votes of members in attendance at any meeting for every purpose, including satisfaction of a
             7703      quorum requirement.
             7704          (8) (a) Members [must] shall be provided a fair and reasonable amount of time before
             7705      the day on which the nonprofit corporation must receive ballots.
             7706          (b) An amount of time is considered to be fair and reasonable if:
             7707          (i) members are given at least 15 days from the day on which the notice is mailed, if
             7708      the notice is mailed by first-class or registered mail;
             7709          (ii) members are given at least 30 days from the day on which the notice is mailed, if
             7710      the notice is mailed by other than first-class or registered mail; or
             7711          (iii) considering all the circumstances, the amount of time is otherwise reasonable.
             7712          Section 244. Section 16-6a-808 is amended to read:
             7713           16-6a-808. Removal of directors.
             7714          (1) Directors elected by voting members or directors may be removed as provided in
             7715      Subsections (1)(a) through (g).


             7716          (a) The voting members may remove one or more directors elected by them with or
             7717      without cause unless the bylaws provide that directors may be removed only for cause.
             7718          (b) If a director is elected by a voting group, only that voting group may participate in
             7719      the vote to remove that director.
             7720          (c) A director may be removed only if the number of votes cast to remove the director
             7721      would be sufficient to elect the director at a meeting to elect directors.
             7722          (d) A director elected by voting members may be removed by the voting members
             7723      only:
             7724          (i) at a meeting called for the purpose of removing that director; and
             7725          (ii) if the meeting notice states that the purpose, or one of the purposes, of the meeting
             7726      is removal of the director.
             7727          (e) An entire board of directors may be removed under Subsections (1)(a) through (d).
             7728          (f) (i) Except as provided in Subsection (1)(f)(ii), a director elected by the board of
             7729      directors may be removed with or without cause by the vote of a majority of the directors then
             7730      in office or such greater number as is set forth in the bylaws.
             7731          (ii) A director elected by the board of directors to fill the vacancy of a director elected
             7732      by the voting members may be removed without cause by the voting members but not the
             7733      board of directors.
             7734          (g) Notwithstanding Subsections (1)(a) through (f), if provided in the bylaws, any
             7735      director no longer qualified to serve, under standards set forth in the bylaws, may be removed
             7736      by a vote of a majority of the directors then in office or such greater number as set forth in the
             7737      bylaws.
             7738          (h) A director who is removed pursuant to this section may deliver to the division for
             7739      filing a statement to that effect pursuant to Section 16-6a-1608 .
             7740          (2) Unless otherwise provided in the bylaws:
             7741          (a) an appointed director may be removed without cause by the person appointing the
             7742      director;
             7743          (b) the person described in Subsection (2)(a) shall remove the director by giving
             7744      written notice of the removal to:
             7745          (i) the director; and
             7746          (ii) the nonprofit corporation; and


             7747          (c) unless the written notice described in Subsection (2)(b) specifies a future effective
             7748      date, a removal is effective when the notice is received by both:
             7749          (i) the director to be removed; and
             7750          (ii) the nonprofit corporation.
             7751          (3) A designated director, as provided in Subsection 16-6a-804 (5), may be removed by
             7752      an amendment to the bylaws deleting or changing the designation.
             7753          (4) Removal of a director under this section [shall not be] is not affected by Subsection
             7754      16-6a-805 (5).
             7755          Section 245. Section 16-6a-1419 is amended to read:
             7756           16-6a-1419. Deposit with state treasurer.
             7757          Assets of a dissolved nonprofit corporation that [should] are to be transferred to a
             7758      creditor, claimant, or member of the nonprofit corporation shall be reduced to cash and
             7759      deposited with the state treasurer in accordance with Title 67, Chapter 4a, Unclaimed Property
             7760      Act, if the creditor, claimant, or member:
             7761          (1) cannot be found; or
             7762          (2) is not legally competent to receive the assets.
             7763          Section 246. Section 16-7-10 is amended to read:
             7764           16-7-10. Death of bishop, trustee, not incorporated -- Succession to property.
             7765          In case of the death, resignation or removal of any such archbishop, bishop, president,
             7766      trustee in trust, president of stake, president of congregation, overseer, presiding elder or
             7767      clergyman who at the time of his death, resignation or removal was holding the title to trust
             7768      property for the use or benefit of any church or religious society, and was not incorporated as a
             7769      corporation sole, the title to any and all such property held by him, of every nature and kind,
             7770      [shall not] does not revert to the grantor nor vest in the heirs of such deceased person, but shall
             7771      be deemed to be in abeyance after such death, resignation or removal until his successor is duly
             7772      appointed to fill such vacancy, and upon the appointment of such successor the title to all the
             7773      property held by his predecessor shall at once, without any other act or deed, vest in the person
             7774      appointed to fill such vacancy.
             7775          Section 247. Section 16-10a-103 is amended to read:
             7776           16-10a-103. Notice.
             7777          (1) (a) Notice given under this chapter [must] shall be in writing unless oral notice is


             7778      reasonable under the circumstances.
             7779          (b) Notice by electronic transmission is written notice.
             7780          (2) (a) Subject to compliance with any requirement that notice be in writing, notice
             7781      may be communicated in person, by telephone, by any form of electronic transmission, or by
             7782      mail or private carrier.
             7783          (b) If the forms of personal notice listed in Subsection (2)(a) are impracticable, notice
             7784      may be communicated:
             7785          (i) (A) by a newspaper of general circulation in the county, or similar subdivision, in
             7786      which the corporation's principal office is located; and
             7787          (B) by publication in accordance with Section 45-1-101 ;
             7788          (ii) by radio, television, or other form of public broadcast communication in the county
             7789      or subdivision; or
             7790          (iii) if the corporation has no office in this state, in the manner allowed by Subsection
             7791      (2)(b)(i) or (ii) but in Salt Lake County.
             7792          (3) (a) Written notice by a domestic or foreign corporation to its shareholders or
             7793      directors, if in a comprehensible form, is effective as to each shareholder or director:
             7794          (i) when mailed, if addressed to the shareholder's or director's address shown in the
             7795      corporation's current record of the shareholder or director; or
             7796          (ii) when electronically transmitted to the shareholder or director, in a manner and to
             7797      an address provided by the shareholder or director in an unrevoked consent.
             7798          (b) Consent under Subsection (3)(a)(ii) is considered revoked if:
             7799          (i) the corporation is unable to deliver by electronic transmission two consecutive
             7800      notices transmitted by the corporation based on that consent; and
             7801          (ii) the corporation's inability to deliver notice by electronic transmission under
             7802      Subsection (3)(b)(i) is known by the:
             7803          (A) corporation's secretary;
             7804          (B) an assistant secretary or transfer agent of the corporation; or
             7805          (C) any other person responsible for providing notice.
             7806          (c) Notwithstanding Subsection (3)(b), a corporation's failure to treat consent under
             7807      Subsection (3)(a) as revoked does not invalidate any meeting or other act.
             7808          (d) Delivery of a notice to shareholders may be excused in accordance with Subsection


             7809      16-10a-705 (5).
             7810          (4) Written notice to a domestic or foreign corporation authorized to transact business
             7811      in this state may be addressed to the corporation's:
             7812          (a) registered agent; or
             7813          (b) secretary at its principal office.
             7814          (5) Except as provided in Subsection (3), written notice, if in a comprehensible form, is
             7815      effective at the earliest of the following:
             7816          (a) when received;
             7817          (b) five days after it is mailed; or
             7818          (c) on the date shown on the return receipt if sent by registered or certified mail, return
             7819      receipt requested, and the receipt is signed by or on behalf of the addressee.
             7820          (6) Oral notice is effective when communicated if communicated in a comprehensible
             7821      manner.
             7822          (7) Notice by publication is effective on the date of first publication.
             7823          (8) (a) If this chapter prescribes notice requirements for particular circumstances, those
             7824      requirements govern.
             7825          (b) If articles of incorporation or bylaws prescribe notice requirements, not inconsistent
             7826      with this section or other provisions of this chapter, those requirements govern.
             7827          Section 248. Section 16-10a-120 is amended to read:
             7828           16-10a-120. Filing requirements.
             7829          (1) A document [must] shall satisfy the requirements of this section, and of any other
             7830      section of this chapter that adds to or varies these requirements, to be entitled to filing by the
             7831      division.
             7832          (2) This chapter must require or permit filing the document with the division.
             7833          (3) (a) The document [must] shall contain the information required by this chapter.
             7834          (b) A document may contain information in addition to that required in Subsection
             7835      (3)(a).
             7836          (4) The document [must] shall be typewritten or machine printed.
             7837          (5) (a) The document [must] shall be in the English language.
             7838          (b) A corporate name need not be in English if written in English letters, Arabic or
             7839      Roman numerals.


             7840          (c) The certificate of existence required of foreign corporations need not be in English
             7841      if accompanied by a reasonably authenticated English translation.
             7842          (6) The document [must] shall be executed, or [must] shall be a true copy made by
             7843      photographic, xerographic, electronic, or other process that provides similar copy accuracy of a
             7844      document that has been executed:
             7845          (a) by the chairman of the board of directors of a domestic or foreign corporation, by
             7846      all of its directors, or by one of its officers;
             7847          (b) if directors have not been selected or the corporation has not been formed, by an
             7848      incorporator;
             7849          (c) if the corporation is in the hands of a receiver, trustee, or other court-appointed
             7850      fiduciary, by that fiduciary;
             7851          (d) if the document is that of a registered agent, by the registered agent, if the person is
             7852      an individual, or by a person authorized by the registered agent to execute the document, if the
             7853      registered agent is an entity; or
             7854          (e) by an attorney in fact if the corporation retains the power of attorney with the
             7855      corporation's records.
             7856          (7) The document shall state beneath or opposite the signature of the person executing
             7857      the document the signer's name and the capacity in which the document is signed.
             7858          (8) The document may, but need not, contain:
             7859          (a) the corporate seal;
             7860          (b) an attestation by the secretary or an assistant secretary; or
             7861          (c) an acknowledgment, verification, or proof.
             7862          (9) The signature of each person signing the document, whether or not the document
             7863      contains an acknowledgment, verification, or proof permitted by Subsection (8), constitutes the
             7864      affirmation or acknowledgment of the person, under penalties of perjury, that the document is
             7865      the person's act and deed or the act and deed of the entity on behalf of which the document is
             7866      executed, and that the facts stated in the document are true.
             7867          (10) If the division has prescribed a mandatory form or cover sheet for the document
             7868      under Section 16-10a-121 , the document [must] shall be in or on the prescribed form or [must]
             7869      shall have the required cover sheet.
             7870          (11) The document [must] shall be delivered to the division for filing and [must] shall


             7871      be accompanied by one exact or conformed copy, except as provided in Section 16-10a-1510 ,
             7872      the correct filing fee, and any franchise tax, license fee, or penalty required by this chapter or
             7873      other law.
             7874          (12) Except with respect to a filing pursuant to Section 16-10a-1510 , the document
             7875      [must] shall state, or be accompanied by a writing stating, the address to which the division
             7876      may send a copy upon completion of the filing.
             7877          Section 249. Section 16-10a-201 is amended to read:
             7878           16-10a-201. Incorporators.
             7879          One or more persons may act as incorporators of a corporation by delivering to the
             7880      division for filing articles meeting the requirements of Section 16-10a-202 . An incorporator
             7881      who is a natural person [must] shall be at least 18 years old.
             7882          Section 250. Section 16-10a-202 is amended to read:
             7883           16-10a-202. Articles of incorporation.
             7884          (1) The articles of incorporation shall set forth:
             7885          (a) the purpose or purposes for which the corporation is organized;
             7886          (b) a corporate name for the corporation that satisfies the requirements of Section
             7887      16-10a-401 ;
             7888          (c) the number of shares the corporation is authorized to issue;
             7889          (d) the information required by Section 16-10a-601 with respect to each class of shares
             7890      the corporation is authorized to issue;
             7891          (e) the information required by Subsection 16-17-203 (1); and
             7892          (f) the name and address of each incorporator.
             7893          (2) The articles of incorporation may set forth:
             7894          (a) the names and addresses of the individuals who are to serve as the initial directors;
             7895          (b) provisions not inconsistent with law regarding:
             7896          (i) managing the business and regulating the affairs of the corporation;
             7897          (ii) defining, limiting, and regulating the powers of the corporation, its board of
             7898      directors, and its shareholders;
             7899          (iii) a par value for authorized shares or classes of shares; and
             7900          (iv) the imposition of personal liability on shareholders for the debts of the corporation
             7901      to a specified extent and upon specified conditions; and


             7902          (c) any provision that under this chapter is permitted to be in the articles of
             7903      incorporation or required or permitted to be set forth in the bylaws including elective
             7904      provisions which, to be effective, [must] shall be included in the articles of incorporation, as
             7905      provided in this chapter.
             7906          (3) It shall be sufficient under Subsection (1)(a) to state, either alone or with other
             7907      purposes, that the purpose of the corporation is to engage in any lawful act or activity for which
             7908      corporations may be organized under the Utah Revised Business Corporation Act, and by such
             7909      statement all lawful acts and activities shall be within the purposes of the corporation, except
             7910      for express limitations, if any.
             7911          (4) The articles of incorporation need not set forth any of the corporate powers
             7912      enumerated in this chapter.
             7913          (5) The articles of incorporation shall be signed by each incorporator and meet the
             7914      filing requirements of Section 16-10a-120 .
             7915          (6) The appointment of the registered agent shall be signed by the registered agent on
             7916      the articles of incorporation or on an attached acknowledgement.
             7917          (7) If this chapter conditions any matter upon the presence of a provision in the bylaws,
             7918      the condition is satisfied if the provision is present either in the articles of incorporation or the
             7919      bylaws. If this chapter conditions any matter upon the absence of a provision in the bylaws, the
             7920      condition is satisfied only if the provision is absent from both the articles of incorporation and
             7921      the bylaws.
             7922          Section 251. Section 16-10a-401 is amended to read:
             7923           16-10a-401. Corporate name.
             7924          (1) The name of a corporation:
             7925          (a) except for the name of a depository institution as defined in Section 7-1-103 , [must]
             7926      shall contain:
             7927          (i) the word:
             7928          (A) "corporation";
             7929          (B) "incorporated"; or
             7930          (C) "company";
             7931          (ii) the abbreviation:
             7932          (A) "corp.";


             7933          (B) "inc."; or
             7934          (C) "co."; or
             7935          (iii) words or abbreviations of like import to the words or abbreviations listed in
             7936      Subsections (1)(a)(i) and (ii) in another language;
             7937          (b) may not contain language stating or implying that the corporation is organized for a
             7938      purpose other than that permitted by:
             7939          (i) Section 16-10a-301 ; and
             7940          (ii) the corporation's articles of incorporation;
             7941          (c) without the written consent of the United States Olympic Committee, may not
             7942      contain the words:
             7943          (i) "Olympic";
             7944          (ii) "Olympiad"; or
             7945          (iii) "Citius Altius Fortius"; and
             7946          (d) without the written consent of the Division of Consumer Protection issued in
             7947      accordance with Section 13-34-114 , may not contain the words:
             7948          (i) "university";
             7949          (ii) "college"; or
             7950          (iii) "institute."
             7951          (2) Except as authorized by Subsections (3) and (4), the name of a corporation [must]
             7952      shall be distinguishable, as defined in Subsection (5), upon the records of the division from:
             7953          (a) the name of any domestic corporation incorporated in or foreign corporation
             7954      authorized to transact business in this state;
             7955          (b) the name of any domestic or foreign nonprofit corporation incorporated or
             7956      authorized to transact business in this state;
             7957          (c) the name of any domestic or foreign limited liability company formed or authorized
             7958      to transact business in this state;
             7959          (d) the name of any limited partnership formed or authorized to transact business in
             7960      this state;
             7961          (e) any name reserved or registered with the division for a corporation, limited liability
             7962      company, or general or limited partnership, under the laws of this state; and
             7963          (f) any business name, fictitious name, assumed name, trademark, or service mark


             7964      registered by the division.
             7965          (3) (a) A corporation may apply to the division for authorization to file its articles of
             7966      incorporation under, or to register or reserve, a name that is not distinguishable upon its records
             7967      from one or more of the names described in Subsection (2).
             7968          (b) The division shall approve the application filed under Subsection (3)(a) if:
             7969          (i) the other person whose name is not distinguishable from the name under which the
             7970      applicant desires to file, or which the applicant desires to register or reserve:
             7971          (A) consents to the filing, registration, or reservation in writing; and
             7972          (B) submits an undertaking in a form satisfactory to the division to change its name to
             7973      a name that is distinguishable from the name of the applicant; or
             7974          (ii) the applicant delivers to the division a certified copy of the final judgment of a
             7975      court of competent jurisdiction establishing the applicant's right to make the requested filing in
             7976      this state under the name applied for.
             7977          (4) A corporation may make a filing under the name, including the fictitious name, of
             7978      another domestic or foreign corporation that is used or registered in this state if:
             7979          (a) the other corporation is incorporated or authorized to transact business in this state;
             7980      and
             7981          (b) the filing corporation:
             7982          (i) has merged with the other corporation; or
             7983          (ii) has been formed by reorganization of the other corporation.
             7984          (5) (a) A name is distinguishable from other names, trademarks, and service marks on
             7985      the records of the division if it:
             7986          (i) contains one or more different letters or numerals; or
             7987          (ii) has a different sequence of letters or numerals from the other names on the
             7988      division's records.
             7989          (b) Differences which are not distinguishing are:
             7990          (i) the words or abbreviations of the words:
             7991          (A) "corporation";
             7992          (B) "company";
             7993          (C) "incorporated";
             7994          (D) "limited partnership";


             7995          (E) "L.P.";
             7996          (F) "limited";
             7997          (G) "ltd.";
             7998          (H) "limited liability company";
             7999          (I) "limited company";
             8000          (J) "L.C."; or
             8001          (K) "L.L.C.";
             8002          (ii) the presence or absence of the words or symbols of the words "the," "and," or "a";
             8003          (iii) differences in punctuation and special characters;
             8004          (iv) differences in capitalization;
             8005          (v) differences between singular and plural forms of words for a corporation:
             8006          (A) incorporated in or authorized to do business in this state on or after May 4, 1998;
             8007      or
             8008          (B) that changes its name on or after May 4, 1998;
             8009          (vi) differences in whether the letters or numbers immediately follow each other or are
             8010      separated by one or more spaces if:
             8011          (A) the sequence of letters or numbers is identical; and
             8012          (B) the corporation:
             8013          (I) is incorporated in or authorized to do business in this state on or after May 3, 1999;
             8014      or
             8015          (II) changes its name on or after May 3, 1999; or
             8016          (vii) differences in abbreviations, for a corporation:
             8017          (A) incorporated in or authorized to do business in this state on or after May 1, 2000;
             8018      or
             8019          (B) that changes its name on or after May 1, 2000.
             8020          (c) The director of the division has the power and authority reasonably necessary to
             8021      interpret and efficiently administer this section and to perform the duties imposed on the
             8022      division by this section.
             8023          (6) A name that implies that the corporation is an agency of this state or of any of its
             8024      political subdivisions, if it is not actually such a legally established agency or subdivision, may
             8025      not be approved for filing by the division.


             8026          (7) (a) The requirements of Subsection (1)(d) do not apply to a corporation
             8027      incorporated in or authorized to do business in this state on or before May 4, 1998, until
             8028      December 31, 1998.
             8029          (b) On or after January 1, 1999, any corporation incorporated in or authorized to do
             8030      business in this state shall comply with the requirements of Subsection (1)(d).
             8031          Section 252. Section 16-10a-601 is amended to read:
             8032           16-10a-601. Authorized shares.
             8033          (1) The articles of incorporation [must] shall prescribe the classes of shares and the
             8034      number of shares of each class that the corporation is authorized to issue. If more than one
             8035      class of shares is authorized, the articles of incorporation [must] shall prescribe a
             8036      distinguishing designation for each class, and prior to the issuance of shares of a class the
             8037      preferences, limitations, and relative rights of that class [must] shall be described in the articles
             8038      of incorporation. All shares of a class [must] shall have preferences, limitations, and relative
             8039      rights identical with those of other shares of the same class except to the extent otherwise
             8040      permitted by this section and Section 16-10a-602 .
             8041          (2) The articles of incorporation [must] shall authorize:
             8042          (a) one or more classes of shares that together have unlimited voting rights; and
             8043          (b) one or more classes of shares, which may be the same class or classes as those with
             8044      voting rights, that together are entitled to receive the net assets of the corporation upon
             8045      dissolution.
             8046          (3) The articles of incorporation may authorize one or more classes of shares and one
             8047      or more series of shares within any class that:
             8048          (a) have special, conditional, or limited voting rights, or no right to vote, except to the
             8049      extent prohibited by this chapter;
             8050          (b) are redeemable or convertible as specified in the articles of incorporation:
             8051          (i) at the option of the corporation, the shareholder, or another person or upon the
             8052      occurrence of a designated event;
             8053          (ii) for money, indebtedness, securities, or other property; or
             8054          (iii) in a designated amount or in an amount determined in accordance with a
             8055      designated formula or by reference to extrinsic data or events;
             8056          (c) entitle the holders to distributions calculated in any manner, including dividends


             8057      that may be cumulative, noncumulative, or partially cumulative; or
             8058          (d) have preference over any other class or series of shares with respect to distributions,
             8059      including dividends and distributions upon the dissolution of the corporation.
             8060          (4) The description of the designations, preferences, limitations, and relative rights of
             8061      share classes or series of shares in Subsection (3) is not exhaustive.
             8062          Section 253. Section 16-10a-602 is amended to read:
             8063           16-10a-602. Terms of class or series determined by board of directors.
             8064          (1) If the articles of incorporation so provide, the board of directors, without
             8065      shareholder action but subject to any limitations and restrictions stated in the articles of
             8066      incorporation, may amend the corporation's articles of incorporation pursuant to the authority
             8067      granted to the board of directors by Subsection 16-10a-1002 (1)(e) to do any of the following:
             8068          (a) designate in whole or in part, the preferences, limitations, and relative rights, within
             8069      the limits set forth in Section 16-10a-601 , of any class of shares before the issuance of any
             8070      shares of that class;
             8071          (b) create one or more series within a class of shares, fix the number of shares of each
             8072      such series, and designate, in whole or part, the preferences, limitations, and relative rights of
             8073      the series, within the limits set forth in Section 16-10a-601 , all before the issuance of any
             8074      shares of that series;
             8075          (c) alter or revoke the preferences, limitations, and relative rights granted to or imposed
             8076      upon any wholly unissued class of shares or any wholly unissued series of any class of shares;
             8077      or
             8078          (d) increase or decrease the number of shares constituting any series, the number of
             8079      shares of which was originally fixed by the board of directors, either before or after the
             8080      issuance of shares of the series, provided that the number may not be decreased below the
             8081      number of shares of the series then outstanding, or increased above the total number of
             8082      authorized shares of the applicable class of shares available for designation as a part of the
             8083      series.
             8084          (2) Each series of a class [must] shall be given a distinguishing designation.
             8085          (3) All shares of a series [must] shall have preferences, limitations, and relative rights
             8086      identical with those of other shares of the same series and, except to the extent otherwise
             8087      provided in the description of the series, with those of other series of the same class.


             8088          (4) Before issuing any shares of a class or series created under this section, or having
             8089      preferences, limitations, or relative rights designated by the board of directors as provided in
             8090      this section, and before any amendment to articles of incorporation contemplated by Subsection
             8091      (1) shall be effective, the corporation [must] shall deliver to the division for filing, in
             8092      accordance with the procedure set forth in Section 16-10a-1006 , articles of amendment that set
             8093      forth:
             8094          (a) the name of the corporation;
             8095          (b) the text of the amendment adopted by the board of directors pursuant to Subsection
             8096      (1);
             8097          (c) the date the amendment was adopted by the board of directors;
             8098          (d) a statement that the amendment was duly adopted by the board of directors without
             8099      shareholder action and that shareholder action was not required; and
             8100          (e) if the amendment alters or revokes the preferences, limitations, or relative rights
             8101      granted to or imposed upon any wholly unissued class of shares or any wholly unissued series
             8102      of any class of shares, a statement that none of the shares of any class or series of shares so
             8103      affected has been issued.
             8104          Section 254. Section 16-10a-603 is amended to read:
             8105           16-10a-603. Issued and outstanding shares.
             8106          (1) A corporation may issue the number of shares of each class or series authorized by
             8107      the articles of incorporation. Shares that are issued are outstanding shares until they are
             8108      reacquired, redeemed, converted, or cancelled.
             8109          (2) The reacquisition, redemption, or conversion of outstanding shares is subject to the
             8110      limitations of Subsection (3) and to Section 16-10a-640 .
             8111          (3) At all times that shares of the corporation are outstanding, one or more shares that
             8112      together have unlimited voting rights and one or more shares that together are entitled to
             8113      receive the net assets of the corporation upon dissolution [must] shall be outstanding.
             8114          Section 255. Section 16-10a-604 is amended to read:
             8115           16-10a-604. Fractional shares.
             8116          (1) A corporation may:
             8117          (a) issue fractions of a share or pay in money the value of fractions of a share;
             8118          (b) arrange for disposition of fractional shares by the shareholders; or


             8119          (c) issue scrip in registered or bearer form entitling the holder to receive a full share
             8120      upon surrendering enough scrip to equal a full share.
             8121          (2) Each certificate representing scrip [must] shall be conspicuously labeled "scrip" and
             8122      [must] shall contain the information required to be included on a share certificate by
             8123      Subsections 16-10a-625 (2) and (3) and Section 16-10a-627 .
             8124          (3) The holder of a fractional share is entitled to exercise the rights of a shareholder,
             8125      including the right to vote, to receive dividends, and to participate in the assets of the
             8126      corporation upon liquidation. The holder of scrip is not entitled to any of these rights unless
             8127      the scrip provides for them.
             8128          (4) The board of directors may authorize the issuance of scrip subject to any condition
             8129      considered desirable, including:
             8130          (a) that the scrip will become void if not exchanged for full shares before a specified
             8131      date; and
             8132          (b) that the shares for which the scrip is exchangeable may be sold and the proceeds
             8133      paid to the scripholders.
             8134          Section 256. Section 16-10a-620 is amended to read:
             8135           16-10a-620. Subscriptions for shares.
             8136          (1) A subscription for shares entered into before incorporation is irrevocable for six
             8137      months unless the subscription agreement provides a longer or shorter period or all the
             8138      subscribers agree or the corporation consents to revocation of the subscription and provided the
             8139      subscription is not considered revocable under the federal securities laws.
             8140          (2) The acceptance by the corporation of a subscription entered into before
             8141      incorporation and the authorization of the issuance of shares pursuant thereto are subject to
             8142      Section 16-10a-621 .
             8143          (3) The board of directors may determine the payment terms of subscriptions for shares
             8144      that were entered into before incorporation, unless the subscription agreement specifies them.
             8145      A call for payment by the board of directors [must] shall be uniform so far as practicable as to
             8146      all shares of the same class or series, unless the subscription agreement specifies otherwise.
             8147          (4) Shares issued pursuant to subscriptions entered into before incorporation are fully
             8148      paid and nonassessable when the corporation receives the consideration specified in the
             8149      subscription agreement.


             8150          (5) If a subscriber defaults in payment of money or property under a subscription
             8151      agreement entered into before incorporation, the corporation may collect the amount owed as
             8152      any other debt. Alternatively, unless the subscription agreement provides otherwise, the
             8153      corporation may rescind the agreement and may sell the shares if the debt remains unpaid more
             8154      than 20 days after the corporation sends written demand for payment to the subscriber.
             8155          (6) A subscription agreement entered into after incorporation is a contract between the
             8156      subscriber and the corporation subject to Section 16-10a-621 .
             8157          Section 257. Section 16-10a-621 is amended to read:
             8158           16-10a-621. Issuance of shares.
             8159          (1) The powers granted in this section to the board of directors may be reserved to the
             8160      shareholders by the articles of incorporation.
             8161          (2) The board of directors may authorize the issuance of shares for consideration
             8162      consisting of any tangible or intangible property or benefit to the corporation, including cash,
             8163      promissory notes, services performed, contracts or arrangements for services to be performed,
             8164      or other securities of the corporation. The terms and conditions of any tangible or intangible
             8165      property or benefit to be provided in the future to the corporation, including contracts or
             8166      arrangements for services to be performed, shall be set forth in writing. However, the failure to
             8167      set forth the terms and conditions in writing does not affect the validity of the issuance of any
             8168      shares issued for any consideration, or their status as fully paid and nonassessable shares.
             8169          (3) Before the corporation issues shares, the board of directors [must] shall determine
             8170      that the consideration received or to be received for the shares to be issued is adequate. The
             8171      board of directors' determination regarding the adequacy of consideration for the issuance of
             8172      shares is conclusive for the purpose of determining whether the shares are validly issued, fully
             8173      paid, and nonassessable.
             8174          (4) When the corporation receives the consideration for which the board of directors
             8175      authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable.
             8176          (5) The corporation may place in escrow shares issued in consideration for contracts or
             8177      arrangements for future services or benefits or in consideration for a promissory note, or make
             8178      other arrangements to restrict the transfer of the shares issued for any such consideration, and
             8179      may credit distributions in respect of the shares against their purchase price, until the services
             8180      are performed, the note is paid, or the benefits are received. If specified future services are not


             8181      performed, the note is not paid, or the benefits are not received, the shares escrowed or
             8182      restricted and the distributions credited may be cancelled in whole or part.
             8183          (6) The board of directors may authorize a committee of the board of directors, or an
             8184      officer of the corporation, to authorize or approve the issuance or sale, or contract for sale of
             8185      shares, within limits specifically prescribed by the board of directors.
             8186          Section 258. Section 16-10a-625 is amended to read:
             8187           16-10a-625. Form and content of certificates.
             8188          (1) Shares may but need not be represented by certificates. Unless this chapter or
             8189      another applicable statute expressly provides otherwise, the rights and obligations of
             8190      shareholders are not affected by whether or not their shares are represented by certificates.
             8191          (2) Each share certificate [must] shall state on its face:
             8192          (a) the name of the issuing corporation and that it is organized under the laws of this
             8193      state;
             8194          (b) the name of the person to whom the certificate is issued; and
             8195          (c) the number and class of shares and the designation of the series, if any, the
             8196      certificate represents.
             8197          (3) If the issuing corporation is authorized to issue different classes of shares or
             8198      different series within a class, the designations, preferences, limitations, and relative rights
             8199      applicable to each class, the variations in preferences, limitations, and relative rights
             8200      determined for each series, and the authority of the board of directors to determine variations
             8201      for any existing or future class or series, [must] shall be summarized on the front or back of
             8202      each share certificate. Alternatively, each certificate may state conspicuously on its front or
             8203      back that the corporation will furnish the shareholder this information on request in writing and
             8204      without charge.
             8205          (4) Each share certificate:
             8206          (a) [must] shall be signed by two officers designated in the bylaws or by the board of
             8207      directors;
             8208          (b) may bear the corporate seal or its facsimile; and
             8209          (c) may contain any other information as the corporation considers necessary or
             8210      appropriate.
             8211          (5) The signatures of the officers upon a certificate may be facsimiles if the certificate


             8212      is countersigned by a transfer agent, or registered by a registrar, other than the corporation itself
             8213      or an employee of the corporation.
             8214          (6) In case any officer who has signed or whose facsimile signature has been placed
             8215      upon a certificate ceases to be an officer before the certificate is issued, the certificate may be
             8216      issued by the corporation with the same effect as if the person were an officer at the date of its
             8217      issue.
             8218          Section 259. Section 16-10a-704 is amended to read:
             8219           16-10a-704. Action without meeting.
             8220          (1) Unless otherwise provided in the articles of incorporation and Subsection (5), and
             8221      subject to the limitations of Subsection 16-10a-1704 (4), any action which may be taken at any
             8222      annual or special meeting of shareholders may be taken without a meeting and without prior
             8223      notice, if one or more consents in writing, setting forth the action so taken, shall be signed by
             8224      the holders of outstanding shares having not less than the minimum number of votes that would
             8225      be necessary to authorize or take the action at a meeting at which all shares entitled to vote
             8226      thereon were present and voted.
             8227          (2) (a) Unless the written consents of all shareholders entitled to vote have been
             8228      obtained, notice of any shareholder approval without a meeting shall be given at least 10 days
             8229      before the consummation of the transaction, action, or event authorized by the shareholder
             8230      action to:
             8231          (i) those shareholders entitled to vote who have not consented in writing; and
             8232          (ii) those shareholders not entitled to vote and to whom this chapter requires that notice
             8233      of the proposed action be given.
             8234          (b) The notice [must] shall contain or be accompanied by the same material that, under
             8235      this chapter, would have been required to be sent in a notice of meeting at which the proposed
             8236      action would have been submitted to the shareholders for action.
             8237          (3) Any shareholder giving a written consent, or the shareholder's proxyholder, or a
             8238      transferee of the shares or a personal representative of the shareholder or their respective
             8239      proxyholder, may revoke the consent by a signed writing describing the action and stating that
             8240      the shareholder's prior consent is revoked, if the writing is received by the corporation prior to
             8241      the effectiveness of the action.
             8242          (4) A shareholder action taken pursuant to this section is not effective unless all written


             8243      consents on which the corporation relies for the taking of an action pursuant to Subsection (1)
             8244      are received by the corporation within a 60-day period and not revoked pursuant to Subsection
             8245      (3). Action taken by the shareholders pursuant to this section is effective as of the date the last
             8246      written consent necessary to effect the action is received by the corporation, unless all of the
             8247      written consents necessary to effect the action specify a later date as the effective date of the
             8248      action, in which case the later date shall be the effective date of the action. If the corporation
             8249      has received written consents as contemplated by Subsection (1) signed by all shareholders
             8250      entitled to vote with respect to the action, the effective date of the shareholder action may be
             8251      any date that is specified in all the written consents as the effective date of the shareholder
             8252      action. Unless otherwise provided by the bylaws, the writing may be received by the
             8253      corporation by electronically transmitted facsimile or other form of communication providing
             8254      the corporation with a complete copy thereof, including a copy of the signature thereto.
             8255          (5) Notwithstanding Subsection (1), directors may not be elected by written consent
             8256      except by unanimous written consent of all shares entitled to vote for the election of directors.
             8257          (6) If not otherwise determined under Sections 16-10a-703 or 16-10a-707 , the record
             8258      date for determining shareholders entitled to take action without a meeting or entitled to be
             8259      given notice under Subsection (2) of action so taken is the date the first shareholder delivers to
             8260      the corporation a writing upon which the action is taken pursuant to Subsection (1).
             8261          (7) Action taken under this section has the same effect as action taken at a meeting of
             8262      shareholders and may be so described in any document.
             8263          Section 260. Section 16-10a-705 is amended to read:
             8264           16-10a-705. Notice of meeting.
             8265          (1) A corporation shall give notice to shareholders of the date, time, and place of each
             8266      annual and special shareholders' meeting no fewer than 10 nor more than 60 days before the
             8267      meeting date. Unless this chapter or the articles of incorporation require otherwise, the
             8268      corporation is required to give notice only to shareholders entitled to vote at the meeting.
             8269          (2) Unless this chapter or the articles of incorporation require otherwise, notice of an
             8270      annual meeting need not include a description of the purpose or purposes for which the meeting
             8271      is called.
             8272          (3) Notice of a special meeting [must] shall include a description of the purpose or
             8273      purposes for which the meeting is called.


             8274          (4) (a) Subject to Subsection (b), unless the bylaws require otherwise, if an annual or
             8275      special shareholders' meeting is adjourned to a different date, time, or place, notice need not be
             8276      given of the new date, time, or place if the new date, time, or place is announced at the meeting
             8277      before adjournment.
             8278          (b) If the adjournment is for more than 30 days, or if after the adjournment a new
             8279      record date for the adjourned meeting is or [must] shall be fixed under Section 16-10a-707 ,
             8280      notice of the adjourned meeting [must] shall be given pursuant to the requirements of this
             8281      section to shareholders of record who are entitled to vote at the meeting.
             8282          (5) (a) Notwithstanding a requirement that notice be given under any provision of this
             8283      chapter, the articles of incorporation, or bylaws of any corporation, notice [shall not be] is not
             8284      required to be given to any shareholder to whom:
             8285          (i) a notice of two consecutive annual meetings, and all notices of meetings or of the
             8286      taking of action by written consent without a meeting during the period between the two
             8287      consecutive annual meetings, have been mailed, addressed to the shareholder at the
             8288      shareholder's address as shown on the records of the corporation, and have been returned
             8289      undeliverable; or
             8290          (ii) at least two payments, if sent by first class mail, of dividends or interest on
             8291      securities during a 12 month period, have been mailed, addressed to the shareholder at the
             8292      shareholder's address as shown on the records of the corporation, and have been returned
             8293      undeliverable.
             8294          (b) Any action taken or meeting held without notice to a shareholder to whom notice is
             8295      excused under Subsection (5) has the same force and effect as if notice had been duly given. If
             8296      a shareholder to whom notice is excused under Subsection (5) delivers to the corporation a
             8297      written notice setting forth the shareholder's current address, or if another address for the
             8298      shareholder is otherwise made known to the corporation, the requirement that notice be given
             8299      to the shareholder is reinstated. In the event that the action taken by the corporation requires the
             8300      filing of a certificate under any provision of this chapter, the certificate need not state that
             8301      notice was not given to shareholders to whom notice was not required pursuant to this
             8302      subsection.
             8303          Section 261. Section 16-10a-706 is amended to read:
             8304           16-10a-706. Waiver of notice.


             8305          (1) A shareholder may waive any notice required by this chapter, the articles of
             8306      incorporation, or the bylaws before or after the date and time stated in the notice as the date or
             8307      time when any action will occur or has occurred. The waiver [must] shall be in writing, be
             8308      signed by the shareholder entitled to the notice, and be delivered to the corporation for
             8309      inclusion in the minutes or filing with the corporate records.
             8310          (2) A shareholder's attendance at a meeting:
             8311          (a) waives objection to lack of notice or defective notice of the meeting, unless the
             8312      shareholder at the beginning of the meeting objects to holding the meeting or transacting
             8313      business at the meeting because of lack of notice or defective notice; and
             8314          (b) waives objection to consideration of a particular matter at the meeting that is not
             8315      within the purposes described in the meeting notice, unless the shareholder objects to
             8316      considering the matter when it is presented.
             8317          Section 262. Section 16-10a-707 is amended to read:
             8318           16-10a-707. Record date.
             8319          (1) The bylaws may fix or provide the manner of fixing the record date for one or more
             8320      voting groups in order to determine the shareholders entitled to be given notice of a
             8321      shareholders' meeting, to determine shareholders entitled to take action without a meeting, to
             8322      demand a special meeting, to vote, or to take any other action. If the bylaws do not fix or
             8323      provide for the manner of fixing a record date, the board of directors of the corporation may fix
             8324      a future date as the record date.
             8325          (2) If not otherwise fixed under Section 16-10a-703 or Subsection (1), the record date
             8326      for determining shareholders entitled to notice of and to vote at an annual or special
             8327      shareholders' meeting is the close of business on the day before the first notice is delivered to
             8328      shareholders.
             8329          (3) A record date fixed under this section may not be more than 70 days before the
             8330      meeting or action requiring a determination of shareholders.
             8331          (4) A determination of shareholders entitled to notice of or to vote at a shareholders'
             8332      meeting is effective for any adjournment of the meeting unless the board of directors fixes a
             8333      new record date, which it [must] shall do if the meeting is adjourned to a date more than 120
             8334      days after the date fixed for the original meeting.
             8335          (5) If a court orders a meeting adjourned to a date more than 120 days after the date


             8336      fixed for the original meeting, it may provide that the original record date continues in effect or
             8337      it may fix a new record date.
             8338          Section 263. Section 16-10a-720 is amended to read:
             8339           16-10a-720. Shareholders' list for meeting.
             8340          (1) After fixing a record date for a shareholders' meeting, a corporation shall prepare a
             8341      list of the names of all its shareholders who are entitled to be given notice of the meeting. The
             8342      list [must] shall be arranged by voting group, and within each voting group by class or series of
             8343      shares. The list [must] shall be alphabetical within each class or series and [must] shall show
             8344      the address of, and the number of shares held by, each shareholder.
             8345          (2) The shareholders' list [must] shall be available for inspection by any shareholder,
             8346      beginning on the earlier of 10 days before the meeting for which the list was prepared or two
             8347      business days after notice of the meeting is given and continuing through the meeting and any
             8348      meeting adjournments, at the corporation's principal office or at a place identified in the
             8349      meeting notice in the city where the meeting will be held. A shareholder or a shareholder's
             8350      agent or attorney is entitled on written demand to the corporation and, subject to the
             8351      requirements of Subsections 16-10a-1602 (3) and (7), and the provisions of Subsections
             8352      16-10a-1603 (2) and (3), to inspect and copy the list, during regular business hours and during
             8353      the period it is available for inspection.
             8354          (3) The corporation shall make the shareholders' list available at the meeting, and any
             8355      shareholder, or any shareholder's agent or attorney is entitled to inspect the list at any time
             8356      during the meeting or any adjournment, for any purposes germane to the meeting.
             8357          (4) If the corporation refuses to allow a shareholder, or the shareholder's agent or
             8358      attorney, to inspect the shareholders' list before or at the meeting, or to copy the list as
             8359      permitted by Subsection (2), the district court of the county where a corporation's principal
             8360      office is located, or, if it has none in this state, the district court for Salt Lake County, on
             8361      application of the shareholder, may summarily order the inspection or copying at the
             8362      corporation's expense and may postpone the meeting for which the list was prepared until the
             8363      inspection or copying is complete.
             8364          (5) If a court orders inspection or copying of the shareholders' list pursuant to
             8365      Subsection (4), unless the corporation proves that it refused inspection or copying of the list in
             8366      good faith because it had a reasonable basis for doubt about the right of the shareholder or the


             8367      shareholder's agent or attorney to inspect or copy the shareholders' list:
             8368          (a) the court shall also order the corporation to pay the shareholder's costs, including
             8369      reasonable counsel fees, incurred to obtain the order;
             8370          (b) the court may order the corporation to pay the shareholder for any damages
             8371      incurred; and
             8372          (c) the court may grant the shareholder any other remedy afforded by law.
             8373          (6) If a court orders inspection or copying of the shareholders' list pursuant to
             8374      Subsection (4), the court may impose reasonable restrictions on the use or distribution of the
             8375      list by the shareholder.
             8376          (7) Refusal or failure to prepare or make available the shareholders' list does not affect
             8377      the validity of action taken at the meeting.
             8378          Section 264. Section 16-10a-722 is amended to read:
             8379           16-10a-722. Proxies.
             8380          (1) A shareholder may vote his shares in person or by proxy.
             8381          (2) A shareholder, his agent, or attorney-in-fact, may appoint a proxy to vote or
             8382      otherwise act for the shareholder by signing an appointment form or by an electronic
             8383      transmission. An electronic transmission [must] shall contain or be accompanied by
             8384      information that indicates that the shareholder, the shareholder's agent, or the shareholder's
             8385      attorney-in-fact authorized the transmission.
             8386          (3) An appointment of a proxy is effective when a signed appointment form or an
             8387      electronic transmission of the appointment is received by the inspector of election or the officer
             8388      or agent of the corporation authorized to tabulate votes. An appointment is valid for 11 months
             8389      unless a longer period is expressly provided in the appointment form.
             8390          (4) An appointment of a proxy is revocable unless the appointment form or electronic
             8391      transmission states that it is irrevocable and the appointment is coupled with an interest.
             8392      Appointments coupled with an interest include the appointment of any of the following persons
             8393      or their designees:
             8394          (a) a pledgee;
             8395          (b) a person who purchased or agreed to purchase the shares;
             8396          (c) a creditor of the corporation who extended its credit under terms requiring the
             8397      appointment;


             8398          (d) an employee of the corporation whose employment contract requires the
             8399      appointment; or
             8400          (e) a party to a voting agreement created under Section 16-10a-731 .
             8401          (5) The death or incapacity of the shareholder appointing a proxy does not affect the
             8402      right of the corporation to accept the proxy's authority unless the appointment is not irrevocable
             8403      and coupled with an interest, and notice of the death or incapacity is received by the secretary
             8404      or other officer or agent authorized to tabulate votes before the proxy exercises the authority
             8405      under the appointment.
             8406          (6) An appointment made irrevocable under Subsection (4) is revoked when the
             8407      interest with which it is coupled is extinguished but the revocation does not affect the right of
             8408      the corporation to accept the proxy's authority unless:
             8409          (a) the corporation had notice that the appointment was coupled with that interest and
             8410      notice that the interest is extinguished is received by the secretary or other officer or agent
             8411      authorized to tabulate votes before the proxy exercises the authority under the appointment; or
             8412          (b) other notice of the revocation of the appointment is received by the secretary or
             8413      other officer or agent authorized to tabulate votes before the proxy exercises the authority
             8414      under the appointment.
             8415          (7) The corporation is not required to recognize an appointment made irrevocable
             8416      under Subsection (4) if it has received a writing revoking the appointment signed by the
             8417      shareholder either personally or by the shareholder's attorney-in-fact, notwithstanding that the
             8418      revocation may be a breach of an obligation of the shareholder to another person not to revoke
             8419      the appointment. This provision [shall not] does not affect any claim the other person may
             8420      have against the shareholder with respect to the revocation.
             8421          (8) A transferee for value of shares subject to an irrevocable appointment may revoke
             8422      the appointment if the transferee did not know of its existence when acquiring the shares and
             8423      the existence of the irrevocable appointment was not noted conspicuously on the certificate
             8424      representing the shares or on the information statement for shares without certificates.
             8425          (9) Subject to Section 16-10a-724 and to any express limitation on the proxy's
             8426      authority stated in the appointment form or electronic transmission, a corporation is entitled to
             8427      accept the proxy's vote or other action as that of the shareholder making the appointment.
             8428          Section 265. Section 16-10a-723 is amended to read:


             8429           16-10a-723. Shares held by nominees.
             8430          (1) A corporation may establish a procedure by which the beneficial owner of shares
             8431      that are registered in the name of a nominee is recognized by the corporation as the
             8432      shareholder. The extent of this recognition may be determined in the procedure.
             8433          (2) The procedure described in Subsection (1) may set forth:
             8434          (a) the types of nominees to which it applies;
             8435          (b) the rights or privileges that the corporation recognizes in a beneficial owner, which
             8436      may include rights or privileges other than voting;
             8437          (c) the manner in which the procedure may be used by the nominee;
             8438          (d) the information that [must] shall be provided by the nominee when the procedure is
             8439      used;
             8440          (e) the period for which the nominee's use of the procedure is effective; and
             8441          (f) other aspects of the rights and duties created.
             8442          Section 266. Section 16-10a-725 is amended to read:
             8443           16-10a-725. Quorum and voting requirements for voting groups.
             8444          (1) Shares entitled to vote as a separate voting group may take action on a matter at a
             8445      meeting only if a quorum of those shares exists with respect to that matter. Unless the articles
             8446      of incorporation or this chapter provide otherwise, a majority of the votes entitled to be cast on
             8447      the matter by the voting group constitutes a quorum of that voting group for action on that
             8448      matter.
             8449          (2) Once a share is represented for any purpose at a meeting, including the purpose of
             8450      determining that a quorum exists, it is deemed present for quorum purposes for the remainder
             8451      of the meeting and for any adjournment of that meeting, unless a new record date is or [must]
             8452      shall be set for that adjourned meeting.
             8453          (3) If a quorum exists, action on a matter, other than the election of directors, by a
             8454      voting group is approved if the votes cast within the voting group favoring the action exceed
             8455      the votes cast within the voting group opposing the action, unless the articles of incorporation
             8456      or this chapter requires a greater number of affirmative votes.
             8457          (4) The election of directors is governed by Section 16-10a-728 .
             8458          Section 267. Section 16-10a-727 is amended to read:
             8459           16-10a-727. Greater quorum or voting requirements.


             8460          (1) The articles of incorporation may provide for a greater quorum or voting
             8461      requirement for shareholders, or voting groups of shareholders, than is provided for by this
             8462      chapter.
             8463          (2) An amendment to the articles of incorporation that changes or deletes a greater
             8464      quorum or voting requirement [must] shall meet the same quorum requirement and be adopted
             8465      by the same vote and voting groups required to take action under the quorum and voting
             8466      requirements then in effect.
             8467          Section 268. Section 16-10a-730 is amended to read:
             8468           16-10a-730. Voting trusts.
             8469          (1) One or more shareholders may create a voting trust, conferring on a trustee the right
             8470      to vote or otherwise act for them, by signing an agreement setting out the provisions of the
             8471      trust, and transferring to the trustee the shares with respect to which the trustee is to act. When
             8472      a voting trust agreement is signed, the trustee shall prepare a list of the names and addresses of
             8473      all owners of beneficial interests in the trust, together with the number and class of shares each
             8474      transferred to the trust, and promptly cause the corporation to receive copies of the list and
             8475      agreement. Thereafter the trustee shall cause the corporation to receive changes to the list
             8476      promptly as they occur and amendments to the agreement promptly as they are made.
             8477          (2) A voting trust becomes effective on the date the first shares subject to the trust are
             8478      registered in the trustee's name. A voting trust is valid for the period provided in the
             8479      agreement, but not more than 10 years after its effective date unless extended under Subsection
             8480      (3).
             8481          (3) All or some of the parties to a voting trust may extend the voting trust for additional
             8482      terms of not more than 10 years each by signing an extension agreement and obtaining the
             8483      trustee's written consent to the extension. An extension is valid for not more than 10 years
             8484      from the date the first shareholder signs the extension agreement. The trustee [must] shall
             8485      deliver copies of the extension agreement and list of beneficial owners to the corporation's
             8486      principal office. An extension agreement binds only those parties signing it.
             8487          Section 269. Section 16-10a-732 is amended to read:
             8488           16-10a-732. Shareholder agreements.
             8489          (1) An agreement among the shareholders of a corporation that complies with this
             8490      section is effective among the shareholders and the corporation even though it is inconsistent


             8491      with one or more other provisions of this chapter in that it:
             8492          (a) eliminates the board of directors or restricts the discretion or powers of the board of
             8493      directors;
             8494          (b) governs the authorization or making of distributions whether or not in proportion to
             8495      ownership of shares, subject to the limitations in Section 16-10a-640 ;
             8496          (c) establishes who shall be directors or officers of the corporation, or their terms of
             8497      office or manner of selection or removal;
             8498          (d) governs, in general or in regard to specific matters, the exercise or division of
             8499      voting power by or between the shareholders and directors or by or among any of them,
             8500      including use of weighted voting rights or director proxies;
             8501          (e) establishes the terms and conditions of any agreement for the transfer or use of
             8502      property or the provision of services between the corporation and any shareholder, director,
             8503      officer or employee of the corporation or among any of them;
             8504          (f) transfers to one or more shareholders or other persons all or part of the authority to
             8505      exercise the corporate powers or to manage the business and affairs of the corporation,
             8506      including the resolution of any issue about which there exists a deadlock among directors or
             8507      shareholders;
             8508          (g) requires dissolution of the corporation at the request of one or more of the
             8509      shareholders or upon the occurrence of a specified event or contingency; or
             8510          (h) otherwise governs the exercise of the corporate powers or the management of the
             8511      business and affairs of the corporation or the relationship among the shareholders, the directors
             8512      and the corporation, or among any of them, and is not contrary to public policy.
             8513          (2) An agreement authorized by this section shall be:
             8514          (a) set forth:
             8515          (i) in the articles of incorporation or bylaws and approved by all persons who are
             8516      shareholders at the time of the agreement; or
             8517          (ii) in a written agreement that is signed by all persons who are shareholders at the time
             8518      of the agreement and is made known to the corporation;
             8519          (b) subject to amendment only by all persons who are shareholders at the time of the
             8520      amendment, unless the agreement provides otherwise; and
             8521          (c) valid for 10 years, unless the agreement provides otherwise.


             8522          (3) The existence of an agreement authorized by this section shall be noted
             8523      conspicuously on the front or back of each certificate for outstanding shares or on the
             8524      information statement required by Section 16-10a-626 (2). If at the time of the agreement the
             8525      corporation has shares outstanding represented by certificates, the corporation shall recall the
             8526      outstanding certificates and issue substitute certificates that comply with this subsection. The
             8527      failure to note the existence of the agreement on the certificate or information statement does
             8528      not affect the validity of the agreement or any action taken pursuant to it. Any purchaser of
             8529      shares who, at the time of purchase, did not have knowledge of the existence of the agreement
             8530      is entitled to rescission of the purchase. A purchaser is considered to have knowledge of the
             8531      existence of the agreement if its existence is noted on the certificate or information statement
             8532      for the shares in compliance with this subsection and, if the shares are not represented by a
             8533      certificate, the information statement is delivered to the purchaser at or prior to the time of
             8534      purchase of the shares. An action to enforce the right of rescission authorized by this
             8535      subsection [must] shall be commenced within the earlier of 90 days after discovery of the
             8536      existence of the agreement or two years after the time of purchase of the shares.
             8537          (4) An agreement authorized by this section shall cease to be effective when shares of
             8538      the corporation are listed on a national securities exchange or regularly traded in a market
             8539      maintained by one or more members of a national or affiliated securities association. If the
             8540      agreement ceases to be effective for any reason, the board of directors may, if the agreement is
             8541      contained or referred to in the corporation's articles of incorporation or bylaws, adopt an
             8542      amendment to the articles of incorporation or bylaws, without shareholder action, to delete the
             8543      agreement and any references to it.
             8544          (5) An agreement authorized by this section that limits the discretion or powers of the
             8545      board of directors shall relieve the directors of, and impose upon the person or persons in
             8546      whom the discretion or powers are vested, liability for acts or omissions imposed by laws on
             8547      directors to the extent that the discretion or powers of the directors are limited by the
             8548      agreement.
             8549          (6) The existence or performance of an agreement authorized by this section may not
             8550      be a ground for imposing personal liability on any shareholder for the acts or debts of the
             8551      corporation even if the agreement or its performance treats the corporation as if it were a
             8552      partnership or results in failure to observe the corporate formalities otherwise applicable to the


             8553      matters governed by the agreement.
             8554          (7) Incorporators or subscribers for shares may act as shareholders with respect to an
             8555      agreement authorized by this section if no shares have been issued when the agreement is
             8556      made.
             8557          Section 270. Section 16-10a-801 is amended to read:
             8558           16-10a-801. Requirement for and duties of board of directors.
             8559          (1) Except as provided in Section 16-10a-732 , each corporation [must] shall have a
             8560      board of directors.
             8561          (2) All corporate powers shall be exercised by or under the authority of, and the
             8562      business and affairs of the corporation managed under the direction of, its board of directors,
             8563      subject to any limitation set forth in the articles of incorporation or in an agreement authorized
             8564      under Section 16-10a-732 .
             8565          Section 271. Section 16-10a-803 is amended to read:
             8566           16-10a-803. Number and election of directors.
             8567          (1) (a) Except as provided in Subsection (1)(b), a corporation's board of directors
             8568      [must] shall consist of a minimum of three individuals.
             8569          (b) (i) Before any shares are issued, a corporation's board of directors may consist of
             8570      one or more individuals.
             8571          (ii) After shares are issued and for as long as a corporation has fewer than three
             8572      shareholders entitled to vote for the election of directors, its board of directors may consist of a
             8573      number of individuals equal to or greater than the number of those shareholders.
             8574          (c) The number of directors shall be specified in or fixed in accordance with the
             8575      bylaws. Unless otherwise provided in the articles of incorporation, the number of initial
             8576      directors stated in the articles of incorporation as originally filed with the division, if initial
             8577      directors are so named in the articles of incorporation, shall be superseded by a provision in the
             8578      bylaws specifying the number of authorized directors.
             8579          (d) The number of directors may be increased or decreased from time to time by
             8580      amendment to the bylaws, but no decrease may have the effect of shortening the term of any
             8581      incumbent director.
             8582          (e) In the absence of a provision in the bylaws or articles of incorporation fixing the
             8583      number of individuals composing a board of directors, the number shall be the greater of:


             8584          (i) the number of directors then in office; or
             8585          (ii) the minimum number of directors permitted by this section.
             8586          (2) The bylaws may establish a variable range for the size of the board of directors by
             8587      fixing a minimum and maximum number of directors. If a range is established, the number of
             8588      directors may be fixed or changed from time to time within the range by the shareholders or the
             8589      board of directors.
             8590          (3) Directors are elected at each annual meeting of the shareholders except as provided
             8591      in Section 16-10a-806 .
             8592          Section 272. Section 16-10a-808 is amended to read:
             8593           16-10a-808. Removal of directors by shareholders.
             8594          (1) The shareholders may remove one or more directors with or without cause unless
             8595      the articles of incorporation provide that directors may be removed only for cause.
             8596          (2) If a director is elected by a voting group of shareholders, only the shareholders of
             8597      that voting group may participate in the vote to remove him.
             8598          (3) If cumulative voting is in effect, a director may not be removed if the number of
             8599      votes sufficient to elect the director under cumulative voting is voted against removal. If
             8600      cumulative voting is not in effect, a director may be removed only if the number of votes cast
             8601      to remove the director exceeds the number of votes cast against removal.
             8602          (4) A director may be removed by the shareholders only at a meeting called for the
             8603      purpose of removing the director and the meeting notice [must] shall state that the purpose, or
             8604      one of the purposes, of the meeting is removal of the director.
             8605          (5) A director who is removed pursuant to this section may deliver to the division for
             8606      filing a statement to that effect pursuant to Section 16-10a-1608 .
             8607          Section 273. Section 16-10a-822 is amended to read:
             8608           16-10a-822. Notice of meeting.
             8609          (1) Unless the articles of incorporation, bylaws, or this chapter provide otherwise,
             8610      regular meetings of the board of directors may be held without notice of the date, time, place,
             8611      or purposes of the meeting.
             8612          (2) Unless the articles of incorporation or bylaws provide for a longer or shorter period,
             8613      special meetings of the board of directors [must] shall be preceded by at least two days' notice
             8614      of the date, time, and place of the meeting. The notice need not describe the purpose of the


             8615      special meeting unless required by the articles of incorporation, bylaws, or this chapter.
             8616          Section 274. Section 16-10a-823 is amended to read:
             8617           16-10a-823. Waiver of notice.
             8618          (1) A director may waive any notice of a meeting before or after the date and time of
             8619      the meeting stated in the notice. Except as provided by Subsection (2), the waiver [must] shall
             8620      be in writing and signed by the director entitled to the notice. The waiver shall be delivered to
             8621      the corporation for filing with the corporate records, but delivery and filing are not conditions
             8622      to its effectiveness.
             8623          (2) A director's attendance at or participation in a meeting waives any required notice
             8624      to the director of the meeting unless the director at the beginning of the meeting, or promptly
             8625      upon the director's arrival, objects to holding the meeting or transacting business at the meeting
             8626      because of lack of notice or defective notice, and does not thereafter vote for or assent to action
             8627      taken at the meeting.
             8628          Section 275. Section 16-10a-825 is amended to read:
             8629           16-10a-825. Committees.
             8630          (1) Unless the articles of incorporation or bylaws provide otherwise, a board of
             8631      directors may create one or more committees and appoint members of the board of directors to
             8632      serve on them. Each committee [must] shall have two or more members, who serve at the
             8633      pleasure of the board of directors.
             8634          (2) The creation of a committee and appointment of members to it [must] shall be
             8635      approved by the greater of:
             8636          (a) a majority of all the directors in office when the action is taken; or
             8637          (b) the number of directors required by the articles of incorporation or bylaws to take
             8638      action under Section 16-10a-824 .
             8639          (3) Sections 16-10a-820 through 16-10a-824 , which govern meetings, action without
             8640      meeting, notice, waiver of notice, and quorum and voting requirements of the board of
             8641      directors, apply to committees and their members as well.
             8642          (4) To the extent specified by the board of directors or in the articles of incorporation
             8643      or bylaws, each committee may exercise the authority of the board of directors under Section
             8644      16-10a-801 .
             8645          (5) The creation of, delegation of authority to, or action by a committee does not alone


             8646      constitute compliance by a director with the standards of conduct described in Section
             8647      16-10a-840 .
             8648          Section 276. Section 16-10a-904 is amended to read:
             8649           16-10a-904. Advance of expenses for directors.
             8650          (1) A corporation may pay for or reimburse the reasonable expenses incurred by a
             8651      director who is a party to a proceeding in advance of final disposition of the proceeding if:
             8652          (a) the director furnishes the corporation a written affirmation of his good faith belief
             8653      that he has met the applicable standard of conduct described in Section 16-10a-902 ;
             8654          (b) the director furnishes to the corporation a written undertaking, executed personally
             8655      or on his behalf, to repay the advance if it is ultimately determined that he did not meet the
             8656      standard of conduct; and
             8657          (c) a determination is made that the facts then known to those making the
             8658      determination would not preclude indemnification under this part.
             8659          (2) The undertaking required by Subsection (1)(b) [must] shall be an unlimited general
             8660      obligation of the director but need not be secured and may be accepted without reference to
             8661      financial ability to make repayment.
             8662          (3) Determinations and authorizations of payments under this section shall be made in
             8663      the manner specified in Section 16-10a-906 .
             8664          Section 277. Section 16-10a-1003 is amended to read:
             8665           16-10a-1003. Amendment by board of directors and shareholders.
             8666          (1) A corporation's board of directors may propose one or more amendments to the
             8667      articles of incorporation for submission to the shareholders.
             8668          (2) For an amendment to the articles of incorporation proposed pursuant to Subsection
             8669      (1) to be adopted:
             8670          (a) the board of directors [must] shall recommend the amendment to the shareholders
             8671      unless the board determines that, because of conflicts of interest or other special circumstances,
             8672      it should make no recommendation and communicates the basis for its determination to the
             8673      shareholders with the amendment; and
             8674          (b) shareholders entitled to vote on the amendment [must] shall approve the
             8675      amendment as provided in Subsection (5).
             8676          (3) The board of directors may condition its submission of the proposed amendment on


             8677      any basis.
             8678          (4) The corporation shall give notice, in accordance with Section 16-10a-705 , of the
             8679      shareholders' meeting at which the amendment will be voted upon, to each shareholder entitled
             8680      to vote on the proposed amendment. The notice of the meeting [must] shall state that one of
             8681      the purposes of the meeting is to consider the proposed amendment and it [must] shall contain
             8682      or be accompanied by a copy or summary of the amendment.
             8683          (5) Unless this chapter, the articles of incorporation, the bylaws, [(]if authorized by the
             8684      articles of incorporation[)], or the board of directors acting pursuant to Subsection (3) require a
             8685      greater vote or a vote by voting groups, the amendment to be adopted must be approved by:
             8686          (a) a majority of the votes entitled to be cast on the amendment by any voting group
             8687      with respect to which the amendment would create dissenters' rights;
             8688          (b) a majority of the votes entitled to be cast on the amendment by any voting group
             8689      with respect to which the amendment would materially and adversely affect rights in respect of
             8690      the shares of the voting group because it:
             8691          (i) alters or abolishes a preferential right of the shares;
             8692          (ii) creates, alters, or abolishes a right in respect of redemption, including a provision
             8693      respecting a sinking fund for the redemption or repurchase, of the shares;
             8694          (iii) alters or abolishes a preemptive right of the holder of the shares to acquire shares
             8695      or other securities;
             8696          (iv) excludes or limits the right of the shares to vote on any matter, or to cumulate
             8697      votes, other than a limitation by dilution through issuance of shares or other securities with
             8698      similar voting rights; or
             8699          (v) reduces the number of shares owned by the shareholder to a fraction of a share or
             8700      scrip if the fractional share or scrip so created is to be acquired for cash or the scrip is to be
             8701      voided under Section 16-10a-604 ; and
             8702          (c) the votes required by Sections 16-10a-725 and 16-10a-726 by every other voting
             8703      group entitled to vote on the amendment.
             8704          (6) If any amendment to the articles of incorporation would impose personal liability
             8705      on shareholders for the debts of a corporation, it must be approved by all of the outstanding
             8706      shares affected, regardless of limitations or restrictions on the voting rights of the shares.
             8707          Section 278. Section 16-10a-1007 is amended to read:


             8708           16-10a-1007. Restated articles of incorporation.
             8709          (1) A corporation's board of directors may restate its articles of incorporation at any
             8710      time with or without shareholder action. A corporation's incorporators may restate its articles
             8711      of incorporation at any time if the corporation has not issued shares and if no directors have
             8712      been appointed.
             8713          (2) The restatement may include one or more amendments to the articles of
             8714      incorporation. If the restatement includes an amendment requiring shareholder approval, it
             8715      must be adopted as provided in Section 16-10a-1003 .
             8716          (3) If the board of directors submits a restatement for shareholder action, the
             8717      corporation shall give notice, in accordance with Section 16-10a-705 , to each shareholder
             8718      entitled to vote on the restatement, of the proposed shareholders' meeting at which the
             8719      restatement will be voted upon. The notice [must] shall state that the purpose, or one of the
             8720      purposes, of the meeting is to consider the proposed restatement and the notice shall contain or
             8721      be accompanied by a copy of the restatement that identifies any amendment or other change it
             8722      would make in the articles of incorporation.
             8723          (4) A corporation restating its articles of incorporation shall deliver to the division for
             8724      filing articles of restatement setting forth:
             8725          (a) the name of the corporation;
             8726          (b) the text of the restated articles of incorporation;
             8727          (c) if the restatement contains an amendment to the articles of incorporation, the
             8728      information required to be set forth in articles of amendment by Section 16-10a-1006 ;
             8729          (d) if the restatement does not contain an amendment to the articles of incorporation, a
             8730      statement to that effect; and
             8731          (e) if the restatement was adopted by the board of directors or incorporators without
             8732      shareholder action, a statement as to how the restatement was adopted and that shareholder
             8733      action was not required.
             8734          (5) Upon filing by the division or at any later effective date determined pursuant to
             8735      Section 16-10a-123 , restated articles of incorporation supersede the original articles of
             8736      incorporation and all prior amendments to them.
             8737          Section 279. Section 16-10a-1022 is amended to read:
             8738           16-10a-1022. Bylaw changing quorum or voting requirement for directors.


             8739          (1) A bylaw that fixes a greater quorum or voting requirement for the board of directors
             8740      than is required by this chapter may be amended or repealed:
             8741          (a) if originally adopted by the shareholders, only by the shareholders, unless otherwise
             8742      permitted as contemplated by Subsection (2); or
             8743          (b) if originally adopted by the board of directors, by the shareholders or unless
             8744      otherwise provided in the articles of incorporation or bylaws, by the board of directors.
             8745          (2) A bylaw adopted or amended by the shareholders that fixes a greater quorum or
             8746      voting requirement for the board of directors may provide that it may be amended or repealed
             8747      only by a specified vote of either the shareholders or the board of directors.
             8748          (3) Action by the board of directors under Subsection (1)(b) to amend or repeal a bylaw
             8749      that changes the quorum or voting requirement for the board of directors [must] shall meet the
             8750      same quorum requirement and be adopted by the same vote required to take action under the
             8751      quorum and voting requirement then in effect or proposed to be adopted, whichever is greater.
             8752          Section 280. Section 16-10a-1023 is amended to read:
             8753           16-10a-1023. Bylaw provisions relating to election of directors.
             8754          (1) A corporation that has shares listed on a national securities exchange or regularly
             8755      traded in a market maintained by one or more members of a national or affiliated securities
             8756      association may elect in its bylaws to be governed in the election of directors by Subsection (2)
             8757      unless the articles of incorporation:
             8758          (a) specifically prohibit the adoption of a bylaw electing to be governed by this section;
             8759          (b) alter the vote required by Subsection 16-10a-728 (2); or
             8760          (c) provide for cumulative voting.
             8761          (2) A corporation may elect to be governed in the election of directors as follows:
             8762          (a) Each vote entitled to be cast may be voted for or against up to that number of
             8763      candidates that is equal to the number of directors to be elected, or the shareholder may
             8764      indicate abstention, but without cumulating the votes.
             8765          (b) To be elected, a nominee [must] shall receive a plurality of the votes cast by
             8766      shareholders of shares entitled to vote in the election at a meeting at which a quorum is present.
             8767          (c) Notwithstanding Subsection (2)(b), a nominee who is elected but receives more
             8768      votes against than for election shall serve as a director for a term that terminates on the earlier
             8769      of:


             8770          (i) 90 days after the day on which the corporation certifies the voting results; or
             8771          (ii) the day on which a person is selected by the board of directors to fill the office held
             8772      by the director, which selection constitutes the filling of a vacancy by the board for the purpose
             8773      of Section 16-10a-810 .
             8774          (d) Subject to Subsection (2)(e), a nominee who is elected but receives more votes
             8775      against than for election may not serve as a director beyond the 90-day period allowed by
             8776      Subsection (2)(c).
             8777          (e) The board of directors may select any qualified person to fill the office held by a
             8778      director who receives more votes against than for election.
             8779          (3) (a) Subsection (2) does not apply to an election of a director by a voting group if
             8780      there are more candidates for election by the voting group than the number of directors to be
             8781      elected, one or more of whom are properly proposed by shareholders.
             8782          (b) The determination of the number of candidates under Subsection (3)(a) is made:
             8783          (i) at the expiration of a time fixed by the articles of incorporation or bylaws for the
             8784      advance notification of director candidates; or
             8785          (ii) if there is no provision under Subsection (3)(b)(i), at a time fixed by the board of
             8786      directors not more than 14 days before notice is given of the meeting at which the election is to
             8787      occur.
             8788          (4) A person may not be considered a candidate for the purpose of Subsection (3) if the
             8789      board of directors determines before the notice of meeting is given that the person's candidacy
             8790      does not create a bona fide election contest.
             8791          (5) A bylaw electing to be governed by this section may be repealed:
             8792          (a) by the shareholders if originally adopted by the shareholders, unless otherwise
             8793      provided by the bylaws; or
             8794          (b) by the board of directors or the shareholders, if originally adopted by the board of
             8795      directors.
             8796          Section 281. Section 16-10a-1101 is amended to read:
             8797           16-10a-1101. Merger.
             8798          (1) One or more domestic corporations may merge into another domestic corporation if
             8799      the board of directors of each corporation adopts and its shareholders, if required by Section
             8800      16-10a-1103 , approve the plan of merger.


             8801          (2) The plan of merger referred to in Subsection (1) [must] shall set forth:
             8802          (a) the name of each corporation planning to merge and the name of the surviving
             8803      corporation into which each other corporation plans to merge;
             8804          (b) the terms and conditions of the merger;
             8805          (c) the manner and basis of converting the shares of each corporation into shares,
             8806      obligations, or other securities of the surviving or any other corporation or into cash or other
             8807      property in whole or part; and
             8808          (d) any amendments to the articles of incorporation of the surviving corporation to be
             8809      effected by the merger.
             8810          (3) The plan of merger may set forth other provisions relating to the merger.
             8811          Section 282. Section 16-10a-1102 is amended to read:
             8812           16-10a-1102. Share exchange.
             8813          (1) A domestic corporation may acquire all of the outstanding shares of one or more
             8814      classes or series of one or more domestic corporations if the board of directors of each
             8815      corporation adopts a plan of share exchange and the shareholders of the corporation, if required
             8816      by Section 16-10a-1103 , approve the plan of share exchange.
             8817          (2) The plan of share exchange referred to in Subsection (1) [must] shall set forth:
             8818          (a) the name of each corporation whose shares will be acquired and the name of the
             8819      acquiring corporation;
             8820          (b) the terms and conditions of the share exchange; and
             8821          (c) the manner and basis of exchanging the shares to be acquired for shares,
             8822      obligations, or other securities of the acquiring or any other corporation or for money or other
             8823      property in whole or part.
             8824          (3) The plan of share exchange may set forth other provisions relating to the share
             8825      exchange.
             8826          (4) This section does not limit the power of a corporation to acquire all or part of the
             8827      shares of one or more classes or series of another corporation through a voluntary exchange of
             8828      shares or otherwise.
             8829          Section 283. Section 16-10a-1103 is amended to read:
             8830           16-10a-1103. Action on plan.
             8831          (1) After adopting a plan of merger or share exchange, the board of directors of each


             8832      corporation party to the merger, and the board of directors of each corporation whose shares
             8833      will be acquired in the share exchange, shall submit the plan of merger to its shareholders for
             8834      approval, except as provided in:
             8835          (a) Subsection (7);
             8836          (b) Section 16-10a-1104 ; or
             8837          (c) the plan of share exchange.
             8838          (2) For a plan of merger or share exchange to be approved:
             8839          (a) the board of directors [must] shall recommend the plan of merger or share exchange
             8840      to the shareholders, unless the board of directors determines that because of conflict of interest
             8841      or other special circumstances it should make no recommendation and communicates the basis
             8842      for its determination to the shareholders with the plan; and
             8843          (b) the shareholders entitled to vote on the plan of merger or share exchange [must]
             8844      shall approve the plan as provided in Subsection (5).
             8845          (3) The board of directors may condition its submission of the proposed merger or
             8846      share exchange on any basis.
             8847          (4) The corporation shall give notice of the shareholders' meeting in accordance with
             8848      Section 16-10a-705 to each shareholder entitled to vote on the plan of merger or share
             8849      exchange. The notice [must] shall state that one of the purposes of the meeting is to consider
             8850      the plan of merger or share exchange and contain or be accompanied by a copy or summary of
             8851      the plan.
             8852          (5) Unless this chapter, the articles of incorporation, the initial bylaws, the amended
             8853      bylaws, or the board of directors acting pursuant to Subsection (3) requires a greater vote, the
             8854      plan of merger or share exchange to be authorized [must] shall be approved by each voting
             8855      group entitled to vote separately on the plan by a majority of all the votes entitled to be cast on
             8856      the plan by that voting group.
             8857          (6) Separate voting by voting groups is required on a plan of:
             8858          (a) merger if the plan contains a provision that, if contained in an amendment to the
             8859      articles of incorporation, would require action by one or more separate voting groups on the
             8860      amendment under Section 16-10a-1004 ; and
             8861          (b) share exchange by each class or series of shares included in the share exchange,
             8862      with each class or series constituting a separate voting group.


             8863          (7) Action by the shareholders of the surviving corporation on a plan of merger is not
             8864      required if:
             8865          (a) the articles of incorporation of the surviving corporation will not differ, except for
             8866      amendments enumerated in Section 16-10a-1002 , from its articles of incorporation before the
             8867      merger;
             8868          (b) each shareholder of the surviving corporation whose shares were outstanding
             8869      immediately before the merger will hold the same number of shares, with identical
             8870      designations, preferences, limitations, and relative rights, immediately after the merger;
             8871          (c) the number of voting shares outstanding immediately after the merger, plus the
             8872      number of voting shares issuable as a result of the merger either by the conversion of securities
             8873      issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the
             8874      merger, will not exceed by more than 20% the total number of voting shares of the surviving
             8875      corporation outstanding immediately before the merger; and
             8876          (d) the number of participating shares outstanding immediately after the merger, plus
             8877      the number of participating shares issuable as a result of the merger either by the conversion of
             8878      securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant
             8879      to the merger, will not exceed by more than 20% the total number of participating shares
             8880      outstanding immediately before the merger.
             8881          (8) As used in Subsection (7):
             8882          (a) "Participating shares" means shares that entitle their holders to participate without
             8883      limitation in distributions.
             8884          (b) "Voting shares" means shares that entitle their holders to vote unconditionally in
             8885      elections of directors.
             8886          (9) After a plan of merger or share exchange is approved, and at any time before the
             8887      merger or share exchange becomes effective the merger or share exchange may be abandoned,
             8888      subject to any contractual rights, without further shareholder action, in accordance with the
             8889      procedure set forth in the plan of merger or share exchange or, if none is set forth, in the
             8890      manner determined by the board of directors.
             8891          (10) If a merger or share exchange is abandoned after articles of merger or share
             8892      exchange have been filed by the division pursuant to Section 16-10a-1105 specifying a delayed
             8893      effective date, the merger or share exchange may be prevented from becoming effective by


             8894      delivering to the division for filing prior to the specified effective time and date a statement of
             8895      abandonment stating that by appropriate corporate action the merger or share exchange has
             8896      been abandoned. The statement of abandonment shall be executed in the same manner as the
             8897      articles of merger or share exchange.
             8898          Section 284. Section 16-10a-1202 is amended to read:
             8899           16-10a-1202. Sale of property requiring shareholder approval.
             8900          (1) A corporation may sell, lease, exchange, or otherwise dispose of all, or substantially
             8901      all, of its property, with or without the good will, otherwise than in the usual and regular course
             8902      of business, on the terms and conditions and for the consideration determined by the board of
             8903      directors, if the board of directors proposes and the shareholders approve the transaction. A
             8904      sale, lease, exchange, or other disposition of all, or substantially all, of the property of a
             8905      corporation, with or without the good will, other than in the usual and regular course of
             8906      business and other than pursuant to a court order, in connection with its dissolution is subject
             8907      to the requirements of this section, but a sale, lease, exchange, or other disposition of all, or
             8908      substantially all, of the property of a corporation, with or without the good will, that is pursuant
             8909      to a court order is not subject to the requirements of this section.
             8910          (2) If a corporation is entitled to vote or otherwise consent, other than in the usual and
             8911      regular course of its business, with respect to the sale, lease, exchange, or other disposition of
             8912      all, or substantially all, of the property, with or without the good will, of another entity which it
             8913      controls, and if the shares or other interests held by the corporation in the other entity constitute
             8914      all, or substantially all, of the property of the corporation, then the corporation shall consent to
             8915      the transaction only if the board of directors proposes and the shareholders approve the
             8916      consent.
             8917          (3) For a transaction described in Subsection (1) or a consent described in Subsection
             8918      (2) to be authorized:
             8919          (a) the board of directors [must] shall recommend the transaction or the consent to the
             8920      shareholders unless the board of directors determines that because of conflict of interest or
             8921      other special circumstances it should make no recommendation and communicates the basis for
             8922      its determination to the shareholders with the submission of the proposed transaction; and
             8923          (b) the shareholders entitled to vote on the transaction or the consent [must] shall
             8924      approve the transaction or the consent as provided in Subsections (5) and (6).


             8925          (4) The board of directors may condition the effectiveness of the transaction or the
             8926      consent on any basis.
             8927          (5) The corporation shall give notice in accordance with Section 16-10a-705 to each
             8928      shareholder entitled to vote on the transaction described in Subsection (1) or the consent
             8929      described in Subsection (2), of the shareholders' meeting at which the transaction or the
             8930      consent will be voted upon. The notice [must] shall:
             8931          (a) state that the purpose, or one of the purposes, of the meeting is to consider:
             8932          (i) in the case of action pursuant to Subsection (1), the sale, lease, exchange, or other
             8933      disposition of all, or substantially all, of the property of the corporation; or
             8934          (ii) in the case of action pursuant to Subsection (2), the corporation's consent to the
             8935      sale, lease, exchange, or other disposition of all, or substantially all, of the property of another
             8936      entity, [(]which shall be identified in the notice[)], the shares or other interests of which held by
             8937      the corporation constitute all, or substantially all, of the property of the corporation; and
             8938          (b) contain or be accompanied by a description of the transaction, in the case of action
             8939      pursuant to Subsection (1), or by a description of the transaction underlying the consent, in the
             8940      case of action pursuant to Subsection (2).
             8941          (6) Unless this chapter, the articles of incorporation, the initial bylaws or the bylaws as
             8942      amended pursuant to Section 16-10a-1021 , or the board of directors acting pursuant to
             8943      Subsection (4) requires a greater vote, the transaction described in Subsection (1) or the
             8944      consent described in Subsection (2) [must] shall be approved by each voting group entitled to
             8945      vote on the transaction or the consent by a majority of all the votes entitled to be cast on the
             8946      transaction or the consent by that voting group.
             8947          (7) After a transaction described in Subsection (1) or a consent described in Subsection
             8948      (2) is authorized, the transaction may be abandoned or the consent withheld or revoked by the
             8949      corporation's board of directors subject to any contractual rights or other limitation on the
             8950      abandonment, withholding, or revocation, without further shareholder action.
             8951          (8) A transaction that constitutes a distribution is governed by Section 16-10a-640 and
             8952      not by this section.
             8953          Section 285. Section 16-10a-1303 is amended to read:
             8954           16-10a-1303. Dissent by nominees and beneficial owners.
             8955          (1) A record shareholder may assert dissenters' rights as to fewer than all the shares


             8956      registered in his name only if the shareholder dissents with respect to all shares beneficially
             8957      owned by any one person and causes the corporation to receive written notice which states the
             8958      dissent and the name and address of each person on whose behalf dissenters' rights are being
             8959      asserted. The rights of a partial dissenter under this subsection are determined as if the shares
             8960      as to which the shareholder dissents and the other shares held of record by him were registered
             8961      in the names of different shareholders.
             8962          (2) A beneficial shareholder may assert dissenters' rights as to shares held on his behalf
             8963      only if:
             8964          (a) the beneficial shareholder causes the corporation to receive the record shareholder's
             8965      written consent to the dissent not later than the time the beneficial shareholder asserts
             8966      dissenters' rights; and
             8967          (b) the beneficial shareholder dissents with respect to all shares of which he is the
             8968      beneficial shareholder.
             8969          (3) The corporation may require that, when a record shareholder dissents with respect
             8970      to the shares held by any one or more beneficial shareholders, each beneficial shareholder
             8971      [must] shall certify to the corporation that both he and the record shareholders of all shares
             8972      owned beneficially by him have asserted, or will timely assert, dissenters' rights as to all the
             8973      shares unlimited on the ability to exercise dissenters' rights. The certification requirement
             8974      [must] shall be stated in the dissenters' notice given pursuant to Section 16-10a-1322 .
             8975          Section 286. Section 16-10a-1320 is amended to read:
             8976           16-10a-1320. Notice of dissenters' rights.
             8977          (1) If a proposed corporate action creating dissenters' rights under Section 16-10a-1302
             8978      is submitted to a vote at a shareholders' meeting, the meeting notice [must] shall be sent to all
             8979      shareholders of the corporation as of the applicable record date, whether or not they are entitled
             8980      to vote at the meeting. The notice shall state that shareholders are or may be entitled to assert
             8981      dissenters' rights under this part. The notice [must] shall be accompanied by a copy of this part
             8982      and the materials, if any, that under this chapter are required to be given the shareholders
             8983      entitled to vote on the proposed action at the meeting. Failure to give notice as required by this
             8984      subsection does not affect any action taken at the shareholders' meeting for which the notice
             8985      was to have been given.
             8986          (2) If a proposed corporate action creating dissenters' rights under Section 16-10a-1302


             8987      is authorized without a meeting of shareholders pursuant to Section 16-10a-704 , any written or
             8988      oral solicitation of a shareholder to execute a written consent to the action contemplated by
             8989      Section 16-10a-704 [must] shall be accompanied or preceded by a written notice stating that
             8990      shareholders are or may be entitled to assert dissenters' rights under this part, by a copy of this
             8991      part, and by the materials, if any, that under this chapter would have been required to be given
             8992      to shareholders entitled to vote on the proposed action if the proposed action were submitted to
             8993      a vote at a shareholders' meeting. Failure to give written notice as provided by this subsection
             8994      does not affect any action taken pursuant to Section 16-10a-704 for which the notice was to
             8995      have been given.
             8996          Section 287. Section 16-10a-1321 is amended to read:
             8997           16-10a-1321. Demand for payment -- Eligibility and notice of intent.
             8998          (1) If a proposed corporate action creating dissenters' rights under Section 16-10a-1302
             8999      is submitted to a vote at a shareholders' meeting, a shareholder who wishes to assert dissenters'
             9000      rights:
             9001          (a) [must] shall cause the corporation to receive, before the vote is taken, written notice
             9002      of his intent to demand payment for shares if the proposed action is effectuated; and
             9003          (b) may not vote any of his shares in favor of the proposed action.
             9004          (2) If a proposed corporate action creating dissenters' rights under Section 16-10a-1302
             9005      is authorized without a meeting of shareholders pursuant to Section 16-10a-704 , a shareholder
             9006      who wishes to assert dissenters' rights may not execute a writing consenting to the proposed
             9007      corporate action.
             9008          (3) In order to be entitled to payment for shares under this part, unless otherwise
             9009      provided in the articles of incorporation, bylaws, or a resolution adopted by the board of
             9010      directors, a shareholder [must] shall have been a shareholder with respect to the shares for
             9011      which payment is demanded as of the date the proposed corporate action creating dissenters'
             9012      rights under Section 16-10a-1302 is approved by the shareholders, if shareholder approval is
             9013      required, or as of the effective date of the corporate action if the corporate action is authorized
             9014      other than by a vote of shareholders.
             9015          (4) A shareholder who does not satisfy the requirements of Subsections (1) through (3)
             9016      is not entitled to payment for shares under this part.
             9017          Section 288. Section 16-10a-1322 is amended to read:


             9018           16-10a-1322. Dissenters' notice.
             9019          (1) If proposed corporate action creating dissenters' rights under Section 16-10a-1302
             9020      is authorized, the corporation shall give a written dissenters' notice to all shareholders who are
             9021      entitled to demand payment for their shares under this part.
             9022          (2) The dissenters' notice required by Subsection (1) [must] shall be sent no later than
             9023      10 days after the effective date of the corporate action creating dissenters' rights under Section
             9024      16-10a-1302 , and shall:
             9025          (a) state that the corporate action was authorized and the effective date or proposed
             9026      effective date of the corporate action;
             9027          (b) state an address at which the corporation will receive payment demands and an
             9028      address at which certificates for certificated shares [must] shall be deposited;
             9029          (c) inform holders of uncertificated shares to what extent transfer of the shares will be
             9030      restricted after the payment demand is received;
             9031          (d) supply a form for demanding payment, which form requests a dissenter to state an
             9032      address to which payment is to be made;
             9033          (e) set a date by which the corporation must receive the payment demand and by which
             9034      certificates for certificated shares must be deposited at the address indicated in the dissenters'
             9035      notice, which dates may not be fewer than 30 nor more than 70 days after the date the
             9036      dissenters' notice required by Subsection (1) is given;
             9037          (f) state the requirement contemplated by Subsection 16-10a-1303 (3), if the
             9038      requirement is imposed; and
             9039          (g) be accompanied by a copy of this part.
             9040          Section 289. Section 16-10a-1323 is amended to read:
             9041           16-10a-1323. Procedure to demand payment.
             9042          (1) A shareholder who is given a dissenters' notice described in Section 16-10a-1322 ,
             9043      who meets the requirements of Section 16-10a-1321 , and wishes to assert dissenters' rights
             9044      [must] shall, in accordance with the terms of the dissenters' notice:
             9045          (a) cause the corporation to receive a payment demand, which may be the payment
             9046      demand form contemplated in Subsection 16-10a-1322 (2)(d), duly completed, or may be stated
             9047      in another writing;
             9048          (b) deposit certificates for his certificated shares in accordance with the terms of the


             9049      dissenters' notice; and
             9050          (c) if required by the corporation in the dissenters' notice described in Section
             9051      16-10a-1322 , as contemplated by Section 16-10a-1327 , certify in writing, in or with the
             9052      payment demand, whether or not he or the person on whose behalf he asserts dissenters' rights
             9053      acquired beneficial ownership of the shares before the date of the first announcement to news
             9054      media or to shareholders of the terms of the proposed corporate action creating dissenters'
             9055      rights under Section 16-10a-1302 .
             9056          (2) A shareholder who demands payment in accordance with Subsection (1) retains all
             9057      rights of a shareholder except the right to transfer the shares until the effective date of the
             9058      proposed corporate action giving rise to the exercise of dissenters' rights and has only the right
             9059      to receive payment for the shares after the effective date of the corporate action.
             9060          (3) A shareholder who does not demand payment and deposit share certificates as
             9061      required, by the date or dates set in the dissenters' notice, is not entitled to payment for shares
             9062      under this part.
             9063          Section 290. Section 16-10a-1325 is amended to read:
             9064           16-10a-1325. Payment.
             9065          (1) Except as provided in Section 16-10a-1327 , upon the later of the effective date of
             9066      the corporate action creating dissenters' rights under Section 16-10a-1302 , and receipt by the
             9067      corporation of each payment demand pursuant to Section 16-10a-1323 , the corporation shall
             9068      pay the amount the corporation estimates to be the fair value of the dissenter's shares, plus
             9069      interest to each dissenter who has complied with Section 16-10a-1323 , and who meets the
             9070      requirements of Section 16-10a-1321 , and who has not yet received payment.
             9071          (2) Each payment made pursuant to Subsection (1) [must] shall be accompanied by:
             9072          (a) (i) (A) the corporation's balance sheet as of the end of its most recent fiscal year, or
             9073      if not available, a fiscal year ending not more than 16 months before the date of payment;
             9074          (B) an income statement for that year;
             9075          (C) a statement of changes in shareholders' equity for that year and a statement of cash
             9076      flow for that year, if the corporation customarily provides such statements to shareholders; and
             9077          (D) the latest available interim financial statements, if any;
             9078          (ii) the balance sheet and statements referred to in Subsection (i) [must] shall be
             9079      audited if the corporation customarily provides audited financial statements to shareholders;


             9080          (b) a statement of the corporation's estimate of the fair value of the shares and the
             9081      amount of interest payable with respect to the shares;
             9082          (c) a statement of the dissenter's right to demand payment under Section 16-10a-1328 ;
             9083      and
             9084          (d) a copy of this part.
             9085          Section 291. Section 16-10a-1330 is amended to read:
             9086           16-10a-1330. Judicial appraisal of shares -- Court action.
             9087          (1) If a demand for payment under Section 16-10a-1328 remains unresolved, the
             9088      corporation shall commence a proceeding within 60 days after receiving the payment demand
             9089      contemplated by Section 16-10a-1328 , and petition the court to determine the fair value of the
             9090      shares and the amount of interest. If the corporation does not commence the proceeding within
             9091      the 60-day period, it shall pay each dissenter whose demand remains unresolved the amount
             9092      demanded.
             9093          (2) The corporation shall commence the proceeding described in Subsection (1) in the
             9094      district court of the county in this state where the corporation's principal office, or if it has no
             9095      principal office in this state, Salt Lake County. If the corporation is a foreign corporation, it
             9096      shall commence the proceeding in the county in this state where the principal office of the
             9097      domestic corporation merged with, or whose shares were acquired by, the foreign corporation
             9098      was located, or, if the domestic corporation did not have its principal office in this state at the
             9099      time of the transaction, in Salt Lake County.
             9100          (3) The corporation shall make all dissenters who have satisfied the requirements of
             9101      Sections 16-10a-1321 , 16-10a-1323 , and 16-10a-1328 , whether or not they are residents of this
             9102      state whose demands remain unresolved, parties to the proceeding commenced under
             9103      Subsection (2) as an action against their shares. All such dissenters who are named as parties
             9104      [must] shall be served with a copy of the petition. Service on each dissenter may be by
             9105      registered or certified mail to the address stated in his payment demand made pursuant to
             9106      Section 16-10a-1328 . If no address is stated in the payment demand, service may be made at
             9107      the address stated in the payment demand given pursuant to Section 16-10a-1323 . If no
             9108      address is stated in the payment demand, service may be made at the address shown on the
             9109      corporation's current record of shareholders for the record shareholder holding the dissenter's
             9110      shares. Service may also be made otherwise as provided by law.


             9111          (4) The jurisdiction of the court in which the proceeding is commenced under
             9112      Subsection (2) is plenary and exclusive. The court may appoint one or more persons as
             9113      appraisers to receive evidence and recommend decision on the question of fair value. The
             9114      appraisers have the powers described in the order appointing them, or in any amendment to it.
             9115      The dissenters are entitled to the same discovery rights as parties in other civil proceedings.
             9116          (5) Each dissenter made a party to the proceeding commenced under Subsection (2) is
             9117      entitled to judgment:
             9118          (a) for the amount, if any, by which the court finds that the fair value of his shares, plus
             9119      interest, exceeds the amount paid by the corporation pursuant to Section 16-10a-1325 ; or
             9120          (b) for the fair value, plus interest, of the dissenter's after-acquired shares for which the
             9121      corporation elected to withhold payment under Section 16-10a-1327 .
             9122          Section 292. Section 16-10a-1402 is amended to read:
             9123           16-10a-1402. Authorization of dissolution after issuance of shares.
             9124          (1) After shares have been issued, dissolution of a corporation may be authorized in the
             9125      manner provided in Subsection (2).
             9126          (2) For a proposal to dissolve the corporation to be authorized:
             9127          (a) the board of directors must recommend dissolution to the shareholders unless the
             9128      board of directors determines that because of a conflict of interest or other special
             9129      circumstances it should make no recommendation and communicates the basis for its
             9130      determination to the shareholders; and
             9131          (b) the shareholders entitled to vote on the proposal must approve the proposal to
             9132      dissolve as provided in Subsection (5).
             9133          (3) The board of directors may condition the effectiveness of the dissolution on any
             9134      basis.
             9135          (4) The corporation shall give notice in accordance with Section 16-10a-705 to each
             9136      shareholder entitled to vote on the proposal to dissolve, of the proposed shareholders' meeting
             9137      at which the proposal to dissolve will be voted upon. The notice [must] shall state that the
             9138      purpose or one of the purposes of the meeting is to consider the proposal to dissolve the
             9139      corporation.
             9140          (5) The proposal to dissolve must be approved by each voting group entitled to vote
             9141      separately on the proposal, by a majority of all the votes entitled to be cast on the proposal by


             9142      that voting group, unless a greater vote is required by the articles of incorporation, the initial
             9143      bylaws or the bylaws amended pursuant to Section 16-10a-1021 , or the board of directors
             9144      acting pursuant to Subsection (3).
             9145          Section 293. Section 16-10a-1404 is amended to read:
             9146           16-10a-1404. Revocation of dissolution.
             9147          (1) A corporation may revoke its dissolution within 120 days after the effective date of
             9148      the dissolution.
             9149          (2) Revocation of dissolution [must] shall be authorized in the same manner as the
             9150      dissolution was authorized unless, in the case of authorization pursuant to Section
             9151      16-10a-1402 , that authorization permitted revocation by action of the board of directors alone,
             9152      in which event the board of directors may revoke the dissolution without shareholder action.
             9153          (3) After the revocation of dissolution is authorized, the corporation may revoke the
             9154      dissolution by delivering to the division for filing articles of revocation of dissolution, together
             9155      with a copy of its articles of dissolution, that set forth:
             9156          (a) the name of the corporation;
             9157          (b) the effective date of the dissolution that was revoked;
             9158          (c) the date that the revocation of dissolution was authorized;
             9159          (d) if pursuant to Subsection (2) the corporation's board of directors or incorporators
             9160      revoked the dissolution authorized under Section 16-10a-1401 , a statement to that effect;
             9161          (e) if pursuant to Subsection (2) the corporation's board of directors revoked a
             9162      dissolution approved by the shareholders, a statement that the revocation was permitted by
             9163      action by the board of directors alone pursuant to that authorization; and
             9164          (f) if the revocation of dissolution was approved pursuant to Subsection (2) by the
             9165      shareholders, the information required by Subsection 16-10a-1403 (1)(e).
             9166          (4) Revocation of dissolution is effective as provided in Subsection 16-10a-123 (1). A
             9167      provision may not be made for a delayed effective date for revocation pursuant to Subsection
             9168      16-10a-123 (2).
             9169          (5) When the revocation of dissolution is effective, it relates back to and takes effect as
             9170      of the effective date of the dissolution and the corporation may carry on its business as if
             9171      dissolution had never occurred.
             9172          Section 294. Section 16-10a-1406 is amended to read:


             9173           16-10a-1406. Disposition of known claims by notification.
             9174          (1) A dissolved corporation may dispose of the known claims against it by following
             9175      the procedures described in this section.
             9176          (2) A dissolved corporation electing to dispose of known claims pursuant to this
             9177      section may give written notice of the dissolution to known claimants at any time after the
             9178      effective date of the dissolution. The written notice [must] shall:
             9179          (a) describe the information that must be included in a claim;
             9180          (b) provide an address to which written notice of any claim must be given to the
             9181      corporation;
             9182          (c) state the deadline, which may not be fewer than 120 days after the effective date of
             9183      the notice, by which the dissolved corporation must receive the claim; and
             9184          (d) state that unless sooner barred by any other state statute limiting actions, the claim
             9185      will be barred if not received by the deadline.
             9186          (3) Unless sooner barred by any other statute limiting actions, a claim against the
             9187      dissolved corporation is barred if:
             9188          (a) a claimant was given notice under Subsection (2) and the claim is not received by
             9189      the dissolved corporation by the deadline; or
             9190          (b) the dissolved corporation delivers to the claimant written notice of rejection of the
             9191      claim within 90 days after receipt of the claim and the claimant whose claim was rejected by
             9192      the dissolved corporation does not commence a proceeding to enforce the claim within 90 days
             9193      after the effective date of the rejection notice.
             9194          (4) Claims which are not rejected by the dissolved corporation in writing within 90
             9195      days after receipt of the claim by the dissolved corporation shall be considered accepted.
             9196          (5) The failure of the dissolved corporation to give notice to any known claimant
             9197      pursuant to Subsection (2) does not affect the disposition under this section of any claim held
             9198      by any other known claimant.
             9199          (6) For purposes of this section, "claim" does not include a contingent liability or a
             9200      claim based on an event occurring after the effective date of dissolution.
             9201          Section 295. Section 16-10a-1407 is amended to read:
             9202           16-10a-1407. Disposition of claims by publication -- Disposition in absence of
             9203      publication.


             9204          (1) A dissolved corporation may publish notice of its dissolution and request that
             9205      persons with claims against the corporation present them in accordance with the notice.
             9206          (2) The notice contemplated in Subsection (1) [must] shall:
             9207          (a) be published:
             9208          (i) one time in a newspaper of general circulation in the county where the dissolved
             9209      corporation's principal office is or was located or, if it has no principal office in this state, in
             9210      Salt Lake County; and
             9211          (ii) as required in Section 45-1-101 ;
             9212          (b) describe the information that must be included in a claim and provide an address at
             9213      which any claim must be given to the corporation; and
             9214          (c) state that unless sooner barred by any other statute limiting actions, the claim will
             9215      be barred if an action to enforce the claim is not commenced within five years after the
             9216      publication of the notice.
             9217          (3) If the dissolved corporation publishes a newspaper or website notice in accordance
             9218      with Subsection (2), then unless sooner barred under Section 16-10a-1406 or under any other
             9219      statute limiting actions, the claim of any claimant against the dissolved corporation is barred
             9220      unless the claimant commences an action to enforce the claim against the dissolved corporation
             9221      within five years after the publication date of the notice.
             9222          (4) (a) For purposes of this section, "claim" means any claim, including claims of this
             9223      state, whether known, due or to become due, absolute or contingent, liquidated or unliquidated,
             9224      founded on contract, tort, or other legal basis, or otherwise.
             9225          (b) For purposes of this section, an action to enforce a claim includes any civil action,
             9226      and any arbitration under any agreement for binding arbitration between the dissolved
             9227      corporation and the claimant.
             9228          (5) If a dissolved corporation does not publish a newspaper notice in accordance with
             9229      Subsection (2), then unless sooner barred under Section 16-10a-1406 or under any other statute
             9230      limiting actions, the claim of any claimant against the dissolved corporation is barred unless the
             9231      claimant commences an action to enforce the claim against the dissolved corporation within
             9232      seven years after the date the corporation was dissolved.
             9233          Section 296. Section 16-10a-1434 is amended to read:
             9234           16-10a-1434. Election to purchase in lieu of dissolution.


             9235          (1) In a proceeding under Subsection 16-10a-1430 (2) to dissolve a corporation that has
             9236      no shares listed on a national securities exchange or regularly traded in a market maintained by
             9237      one or more members of a national or affiliated securities association, the corporation may
             9238      elect, or if it fails to elect, one or more shareholders may elect to purchase all shares of the
             9239      corporation owned by the petitioning shareholder, at the fair value of the shares, determined as
             9240      provided in this section. An election pursuant to this section is irrevocable unless the court
             9241      determines that it is equitable to set aside or modify the election.
             9242          (2) (a) An election to purchase pursuant to this section may be filed with the court at
             9243      any time within 90 days after the filing of the petition under Subsection 16-10a-1430 (2) or at
             9244      any later time as the court in its discretion may allow. If the corporation files an election with
             9245      the court within the 90-day period, or at any later time allowed by the court, to purchase all
             9246      shares of the corporation owned by the petitioning shareholder, the corporation shall purchase
             9247      the shares in the manner provided in this section.
             9248          (b) If the corporation does not file an election with the court within the time period, but
             9249      an election to purchase all shares of the corporation owned by the petitioning shareholder is
             9250      filed by one or more shareholders within the time period, the corporation shall, within 10 days
             9251      after the later of:
             9252          (i) the end of the time period allowed for the filing of elections to purchase under this
             9253      section; or
             9254          (ii) notification from the court of an election by shareholders to purchase all shares of
             9255      the corporation owned by the petitioning shareholder as provided in this section, give written
             9256      notice of the election to purchase to all shareholders of the corporation, other than the
             9257      petitioning shareholder. The notice shall state the name and number of shares owned by the
             9258      petitioning shareholder and the name and number of shares owned by each electing
             9259      shareholder. The notice shall advise any recipients who have not participated in the election of
             9260      their right to join in the election to purchase shares in accordance with this section, and of the
             9261      date by which any notice of intent to participate must be filed with the court.
             9262          (c) Shareholders who wish to participate in the purchase of shares from the petitioning
             9263      shareholder [must] shall file notice of their intention to join in the purchase by the electing
             9264      shareholders, no later than 30 days after the effective date of the corporation's notice of their
             9265      right to join in the election to purchase.


             9266          (d) All shareholders who have filed with the court an election or notice of their
             9267      intention to participate in the election to purchase the shares of the corporation owned by the
             9268      petitioning shareholder thereby become irrevocably obligated to participate in the purchase of
             9269      shares from the petitioning shareholders upon the terms and conditions of this section, unless
             9270      the court otherwise directs.
             9271          (e) After an election has been filed by the corporation or one or more shareholders, the
             9272      proceedings under Subsection 16-10a-1430 (2) may not be discontinued or settled, nor may the
             9273      petitioning shareholder sell or otherwise dispose of any shares of the corporation, unless the
             9274      court determines that it would be equitable to the corporation and the shareholders, other than
             9275      the petitioning shareholders, to permit any discontinuance, settlement, sale, or other
             9276      disposition.
             9277          (3) If, within 60 days after the earlier of:
             9278          (a) the corporation's filing of an election to purchase all shares of the corporation
             9279      owned by the petitioning shareholder; or
             9280          (b) the corporation's mailing of a notice to its shareholders of the filing of an election
             9281      by the shareholders to purchase all shares of the corporation owned by the petitioning
             9282      shareholder, the petitioning shareholder and electing corporation or shareholders reach
             9283      agreement as to the fair value and terms of purchase of the petitioning shareholder's shares, the
             9284      court shall enter an order directing the purchase of petitioner's shares, upon the terms and
             9285      conditions agreed to by the parties.
             9286          (4) If the parties are unable to reach an agreement as provided for in Subsection (3),
             9287      upon application of any party the court shall stay the proceedings under Subsection
             9288      16-10a-1430 (2) and determine the fair value of the petitioning shareholder's shares as of the
             9289      day before the date on which the petition under Subsection 16-10a-1430 (2) was filed or as of
             9290      any other date the court determines to be appropriate under the circumstances and based on the
             9291      factors the court determines to be appropriate.
             9292          (5) (a) Upon determining the fair value of the shares of the corporation owned by the
             9293      petitioning shareholder, the court shall enter an order directing the purchase of the shares upon
             9294      terms and conditions the court determines to be appropriate. The terms and conditions may
             9295      include payment of the purchase price in installments, where necessary in the interests of
             9296      equity, provision for security to assure payment of the purchase price and any additional costs,


             9297      fees, and expenses awarded by the court, and an allocation of shares among shareholders if the
             9298      shares are to be purchased by shareholders.
             9299          (b) In allocating the petitioning shareholders' shares among holders of different classes
             9300      of shares, the court shall attempt to preserve the existing distribution of voting rights among
             9301      holders of different share classes to the extent practicable. The court may direct that holders of
             9302      a specific class or classes [shall not] may not participate in the purchase. The court may not
             9303      require any electing shareholder to purchase more of the shares of the corporation owned by the
             9304      petitioning shareholder than the number of shares that the purchasing shareholder may have set
             9305      forth in his election or notice of intent to participate filed with the court as the maximum
             9306      number of shares he is willing to purchase.
             9307          (c) Interest may be allowed at the rate and from the date determined by the court to be
             9308      equitable. However, if the court finds that the refusal of the petitioning shareholder to accept
             9309      an offer of payment was arbitrary or otherwise not in good faith, interest may not be allowed.
             9310          (d) If the court finds that the petitioning shareholder had probable grounds for relief
             9311      under Subsection 16-10a-1430 (2)(b) or (d), it may award to the petitioning shareholder
             9312      reasonable fees and expenses of counsel and experts employed by the petitioning shareholder.
             9313          (6) Upon entry of an order under Subsection (3) or (5), the court shall dismiss the
             9314      petition to dissolve the corporation under Section 16-10a-1430 , and the petitioning shareholder
             9315      shall no longer have any rights or status as a shareholder of the corporation, except the right to
             9316      receive the amounts awarded to him by the court. The award is enforceable in the same
             9317      manner as any other judgment.
             9318          (7) (a) The purchase ordered pursuant to Subsection (5) shall be made within 10 days
             9319      after the date the order becomes final, unless before that time the corporation files with the
             9320      court a notice of its intention to adopt articles of dissolution pursuant to Sections 16-10a-1402
             9321      and 16-10a-1403 . The articles of dissolution must then be adopted and filed within 50 days
             9322      after notice.
             9323          (b) Upon filing of the articles of dissolution, the corporation is dissolved in accordance
             9324      with the provisions of Sections 16-10a-1405 through 16-10a-1408 , and the order entered
             9325      pursuant to Subsection (5) is no longer of any force or effect. However, the court may award
             9326      the petitioning shareholder reasonable fees and expenses in accordance with the provisions of
             9327      Subsection (5)(d). The petitioning shareholder may continue to pursue any claims previously


             9328      asserted on behalf of the corporation.
             9329          (8) Any payment by the corporation pursuant to an order under Subsection (3) or (5),
             9330      other than an award of fees and expenses pursuant to Subsection (5)(d), is subject to the
             9331      provisions of Section 16-10a-640 .
             9332          Section 297. Section 16-10a-1506 is amended to read:
             9333           16-10a-1506. Corporate name and assumed corporate name of foreign
             9334      corporation.
             9335          (1) Except as provided in Subsection (2), if the corporate name of a foreign corporation
             9336      does not satisfy the requirements of Section 16-10a-401 , which applies to domestic
             9337      corporations, the foreign corporation, in order to obtain authority to transact business in this
             9338      state, [must] shall assume for use in this state a name that satisfies the requirements of Section
             9339      16-10a-401 .
             9340          (2) A foreign corporation may obtain authority to transact business in this state with a
             9341      name that does not meet the requirements of Subsection (1) because it is not distinguishable as
             9342      required under Subsection 16-10a-401 (2), if the foreign corporation delivers to the division for
             9343      filing either:
             9344          (a) a written consent to the foreign corporation's use of the name, given and signed by
             9345      the other person entitled to the use of the name together with a written undertaking by the other
             9346      person, in a form satisfactory to the division, to change its name to a name that is
             9347      distinguishable from the name of the applicant; or
             9348          (b) a certified copy of a final judgment of a court of competent jurisdiction establishing
             9349      the prior right of the foreign corporation to use the requested name in this state.
             9350          (3) A foreign corporation may use in this state the name, including the fictitious name,
             9351      of another domestic or foreign corporation that is used or registered in this state if the other
             9352      corporation is incorporated or authorized to transact business in this state and the foreign
             9353      corporation:
             9354          (a) has merged with the other corporation; or
             9355          (b) has been formed by reorganization of the other corporation.
             9356          (4) If a foreign corporation authorized to transact business in this state, whether under
             9357      its corporate name or an assumed corporate name, changes its corporate name to one that does
             9358      not satisfy the requirements of Subsections (1) through (3), or the requirements of Section


             9359      16-10a-401 , it may not transact business in this state under the changed name but [must] shall
             9360      use an assumed corporate name that does meet the requirements of this section and [must] shall
             9361      deliver to the division for filing an amended application for authority to transact business
             9362      pursuant to Section 16-10a-1504 .
             9363          Section 298. Section 16-10a-1507 is amended to read:
             9364           16-10a-1507. Registered name of foreign corporation.
             9365          (1) A foreign corporation may register its corporate name as provided in this section if
             9366      the name would be available for use as a corporate name for a domestic corporation under
             9367      Section 16-10a-401 . If the foreign corporation's corporate name would not be available for
             9368      such use, then the foreign corporation may register its corporate name modified by the addition
             9369      of any of the following words or abbreviations, if the modified name would be available for use
             9370      under Section 16-10a-401 : "corporation," "incorporated," "company," "corp.," "inc.," or "co."
             9371          (2) A foreign corporation registers its corporate name, or its corporate name with any
             9372      addition permitted by Subsection (1), by delivering to the division for filing an application for
             9373      registration:
             9374          (a) setting forth its corporate name, the name to be registered which [must] shall meet
             9375      the requirements of Section 16-10a-401 that apply to domestic corporations, the state or
             9376      country and date of incorporation, and a brief description of the nature of the business in which
             9377      it is engaged; and
             9378          (b) accompanied by a certificate of existence, or a document of similar import from the
             9379      state or country of incorporation as evidence that the foreign corporation is in existence or has
             9380      authority to transact business under the laws of the state or country in which it is organized.
             9381          (3) The name is registered for the applicant upon the effective date of the application,
             9382      and the initial registration is effective until the end of the calendar year in which it became
             9383      effective.
             9384          (4) A foreign corporation that has in effect a registration of its corporate name as
             9385      permitted by Subsection (1) may renew the registration for the following year by delivering to
             9386      the division for filing a renewal application for registration, which complies with the
             9387      requirements of Subsection (2), between October 1 and December 31 of the preceding year.
             9388      When filed, the renewal application for registration renews the registration for the following
             9389      calendar year.


             9390          (5) A foreign corporation that has in effect registration of its corporate name may apply
             9391      for authority to transact business in this state under the registered name in accordance with the
             9392      procedure set forth in this part or it may assign the registration to another foreign corporation
             9393      by delivering to the division for filing an assignment of the registration that states the registered
             9394      name, the name of the assigning foreign corporation, and the name of the assignee,
             9395      concurrently with the delivery to the division for filing of the assignee's application for
             9396      registration of the name. The assignee's application [must] shall meet the requirements of this
             9397      part.
             9398          (6) (a) A foreign corporation that has in effect registration of its corporate name may
             9399      terminate the registration at any time by delivering to the division for filing a statement of
             9400      termination setting forth the corporate name and stating that the registration is terminated.
             9401          (b) A registration automatically terminates upon the filing of an application for
             9402      authority to transact business in this state under the registered name.
             9403          (7) The registration of a corporate name under Subsection (1) constitutes authority by
             9404      the division to file an application meeting the requirements of this part for authority to transact
             9405      business in this state under the registered name, but the authorization is subject to the
             9406      limitations applicable to corporate names as set forth in Section 16-10a-403 .
             9407          Section 299. Section 16-10a-1510 is amended to read:
             9408           16-10a-1510. Resignation of registered agent of foreign corporation.
             9409          (1) The registered agent of a foreign corporation authorized to transact business in this
             9410      state may resign the agency appointment by delivering to the division for filing a statement of
             9411      resignation, which [must] shall be signed by the resigning registered agent and accompanied by
             9412      two exact or conformed copies of the statement of resignation. The statement of resignation
             9413      may include a statement that the registered office is also discontinued. The statement of
             9414      resignation filed by the registered agent shall include a declaration that notice of the resignation
             9415      has been given to the corporation.
             9416          (2) After filing the statement of resignation, the division shall deliver one copy of the
             9417      resignation to the registered office of the foreign corporation and the other copy to its principal
             9418      office.
             9419          (3) The agency appointment terminates, and the registered office discontinues if so
             9420      provided, on the 31st day after the filing date of the statement of resignation.


             9421          Section 300. Section 16-10a-1533 is amended to read:
             9422           16-10a-1533. Domestication of foreign corporations.
             9423          (1) (a) Any foreign corporation may become a domestic corporation by delivering to
             9424      the division for filing articles of domestication meeting the requirements of Subsection (2) if
             9425      the board of directors of the corporation adopts, and its shareholders approve, the
             9426      domestication.
             9427          (b) The adoption and approval of the domestication shall be in accordance with the
             9428      consent requirements of Section 16-10a-1003 for amending articles of incorporation.
             9429          (2) (a) The articles of domestication shall meet the requirements applicable to articles
             9430      of incorporation set forth in Sections 16-10a-120 and 16-10a-202 , except that:
             9431          (i) the articles of domestication need not name, or be signed by, the incorporators of
             9432      the foreign corporation; and
             9433          (ii) any reference to the corporation's registered office, registered agent, or directors
             9434      shall be to the registered office and agent in Utah, and the directors then in office at the time of
             9435      filing the articles of domestication.
             9436          (b) The articles of domestication shall set forth:
             9437          (i) the date on which and jurisdiction where the corporation was first formed,
             9438      incorporated, or otherwise came into being;
             9439          (ii) the name of the corporation immediately prior to the filing of the articles of
             9440      domestication;
             9441          (iii) any jurisdiction that constituted the seat, location of incorporation, principal place
             9442      of business, or central administration of the corporation immediately prior to the filing of the
             9443      articles of domestication; and
             9444          (iv) a statement that the articles of domestication were adopted by the corporation's
             9445      board of directors and approved by its shareholders.
             9446          (3) (a) Upon the filing of articles of domestication with the division, the corporation
             9447      shall be domesticated in this state, shall thereafter be subject to all of the provisions of this
             9448      chapter, and shall continue as if it had been incorporated under this chapter.
             9449          (b) Notwithstanding any other provisions of this chapter, the existence of the
             9450      corporation shall be considered to have commenced on the date the corporation commenced its
             9451      existence in the jurisdiction in which the corporation was first formed, incorporated, or


             9452      otherwise came into being.
             9453          (4) The articles of domestication, upon filing with the division, shall become the
             9454      articles of incorporation of the corporation, and shall be subject to amendments or restatement
             9455      the same as any other articles of incorporation under this chapter.
             9456          (5) The domestication of any corporation in this state [shall not] may not be considered
             9457      to affect any obligation or liability of the corporation incurred prior to its domestication.
             9458          (6) The filing of the articles of domestication [shall not] do not affect the choice of law
             9459      applicable to the corporation, except that from the date the articles of domestication are filed,
             9460      the law of Utah, including the provisions of this chapter, shall apply to the corporation to the
             9461      same extent as if the corporation had been incorporated as a corporation of this state on that
             9462      date.
             9463          Section 301. Section 16-10a-1607 is amended to read:
             9464           16-10a-1607. Annual report for division.
             9465          (1) Each domestic corporation, and each foreign corporation authorized to transact
             9466      business in this state, shall deliver to the division for filing an annual report on a form provided
             9467      by the division that sets forth:
             9468          (a) the corporate name of the domestic or foreign corporation and any assumed
             9469      corporate name of the foreign corporation;
             9470          (b) the jurisdiction under whose law it is incorporated;
             9471          (c) the information required by Subsection 16-17-203 (1);
             9472          (d) the street address of its principal office, wherever located; and
             9473          (e) the names of its principal officers.
             9474          (2) The division shall deliver a copy of the prescribed form of annual report to each
             9475      domestic corporation and each foreign corporation authorized to transact business in this state.
             9476          (3) Information in the annual report [must] shall be current as of the date the annual
             9477      report is executed on behalf of the corporation.
             9478          (4) The annual report of a domestic or foreign corporation shall be delivered annually
             9479      to the division no later than the end of the second calendar month following the calendar month
             9480      in which the report form is mailed by the division. Proof to the satisfaction of the division that
             9481      the corporation has mailed an annual report form is considered in compliance with this
             9482      subsection.


             9483          (5) If an annual report contains the information required by this section, the division
             9484      shall file it. If a report does not contain the information required by this section, the division
             9485      shall promptly notify the reporting domestic or foreign corporation in writing and return the
             9486      report to it for correction. If the report was otherwise timely filed and is corrected to contain
             9487      the information required by this section and delivered to the division within 30 days after the
             9488      effective date of the notice of rejection, the annual report is considered to be timely filed.
             9489          (6) The fact that an individual's name is signed on an annual report form is prima facie
             9490      evidence for division purposes that the individual is authorized to certify the report on behalf of
             9491      the corporation.
             9492          (7) The annual report form provided by the division may be designed to provide a
             9493      simplified certification by the corporation if no changes have been made in the required
             9494      information from the last preceding report filed.
             9495          (8) A domestic or foreign corporation may, but may not be required to, deliver to the
             9496      division for filing an amendment to its annual report reflecting any change in the information
             9497      contained in its annual report as last amended.
             9498          Section 302. Section 16-11-6 is amended to read:
             9499           16-11-6. Purpose of professional corporation -- Power to own property and invest
             9500      funds.
             9501          A professional corporation may be organized pursuant to the provisions of this act only
             9502      for the purpose of rendering one specific type of professional service and services ancillary
             9503      thereto and [shall not] may not engage in any business other than rendering the professional
             9504      service which it was organized to render and services ancillary thereto; provided, however, that
             9505      a professional corporation may own real and personal property necessary or appropriate for
             9506      rendering the type of professional service it was organized to render and may invest its funds in
             9507      real estate, mortgages, stocks, bonds and any other type of investments.
             9508          Section 303. Section 16-11-8 is amended to read:
             9509           16-11-8. Officer, director, or shareholder [must] shall be licensed professional --
             9510      Nonlicensed person as secretary or treasurer.
             9511          (1) (a) Except as provided in Subsection (1)(b), a person may not be an officer,
             9512      director, or shareholder of a professional corporation unless that person is:
             9513          (i) an individual licensed to render the same specific professional services as those for


             9514      which the corporation is organized; or
             9515          (ii) qualified to be an officer, director, or shareholder under the applicable licensing act
             9516      for the profession for which the corporation is organized.
             9517          (b) Notwithstanding Subsection (1)(a), a nonlicensed person may serve as secretary or
             9518      treasurer of the professional corporation.
             9519          (2) For purposes of Subsection (1), professional services are considered the same
             9520      specific professional services as those for which the corporation is organized if:
             9521          (a) the corporation is organized to provide services described in:
             9522          (i) Title 58, Chapter 67, Utah Medical Practice Act; or
             9523          (ii) Title 58, Chapter 68, Utah Osteopathic Medical Practice Act; and
             9524          (b) the officer, director, or shareholder is licensed under either of the chapters listed in
             9525      Subsection (2)(a).
             9526          Section 304. Section 16-11-15 is amended to read:
             9527           16-11-15. Incorporation under Utah Revised Business Corporation Act permitted
             9528      -- Existing corporations may come under Professional Corporation Act.
             9529          This act [shall not] does not preclude incorporation by professional persons under Title
             9530      16, Chapter 10a, Utah Revised Business Corporation Act, where such persons would be
             9531      permitted to organize a corporation and perform professional services by means of such
             9532      corporation in the absence of this act. This act [shall not] does not apply to any corporation
             9533      organized by such persons prior to the passage of this act, but any such persons or any such
             9534      corporation may bring themselves and such corporation within the provisions of this act by
             9535      amending the articles of incorporation in such a manner as to be consistent with all of the
             9536      provisions of this act and by affirmatively stating in the amended articles of incorporation that
             9537      the shareholders have elected to bring the corporation within the provisions of this act.
             9538          Section 305. Section 16-11-16 is amended to read:
             9539           16-11-16. Corporate name.
             9540          (1) The name of each professional corporation as set forth in its articles of
             9541      incorporation:
             9542          (a) shall contain the terms:
             9543          (i) "professional corporation"; or
             9544          (ii) "P.C.";


             9545          (b) may not contain the words:
             9546          (i) "incorporated"; or
             9547          (ii) "inc.";
             9548          (c) may not contain language stating or implying that the professional corporation is
             9549      organized for a purpose other than that permitted by:
             9550          (i) Section 16-11-6 ; and
             9551          (ii) the professional corporation's articles of incorporation;
             9552          (d) without the written consent of the United States Olympic Committee, may not
             9553      contain the words:
             9554          (i) "Olympic";
             9555          (ii) "Olympiad"; or
             9556          (iii) "Citius Altius Fortius"; and
             9557          (e) without the written consent of the Division of Consumer Protection in accordance
             9558      with Section 13-34-114 , may not contain the words:
             9559          (i) "university";
             9560          (ii) "college"; or
             9561          (iii) "institute."
             9562          (2) The professional corporation may not imply by any word in the name that it is an
             9563      agency of the state or of any of its political subdivisions.
             9564          (3) A person, other than a professional corporation formed or registered under this
             9565      chapter, may not use in its name in this state any of the terms:
             9566          (a) "professional corporation"; or
             9567          (b) "P.C."
             9568          (4) Except as authorized by Subsection (5), the name of the professional corporation
             9569      [must] shall be distinguishable, as defined in Subsection (6), upon the records of the division
             9570      from:
             9571          (a) the name of any domestic corporation incorporated in or foreign corporation
             9572      authorized to transact business in this state;
             9573          (b) the name of any domestic or foreign nonprofit corporation incorporated or
             9574      authorized to transact business in this state;
             9575          (c) the name of any domestic or foreign limited liability company formed or authorized


             9576      to transact business in this state;
             9577          (d) the name of any limited partnership formed or authorized to transact business in
             9578      this state;
             9579          (e) any name reserved or registered with the division for a corporation, limited liability
             9580      company, or general or limited partnership, under the laws of this state; and
             9581          (f) any business name, fictitious name, assumed name, trademark, or service mark
             9582      registered by the division.
             9583          (5) (a) A professional corporation may apply to the division for authorization to file its
             9584      articles of incorporation under, or to register or reserve, a name that is not distinguishable upon
             9585      its records from one or more of the names described in Subsection (4).
             9586          (b) The division shall approve the application filed under Subsection (5)(a) if:
             9587          (i) the other person whose name is not distinguishable from the name under which the
             9588      applicant desires to file, or which the applicant desires to register or reserve:
             9589          (A) consents to the filing, registration, or reservation in writing; and
             9590          (B) submits an undertaking in a form satisfactory to the division to change its name to
             9591      a name that is distinguishable from the name of the applicant; or
             9592          (ii) the applicant delivers to the division a certified copy of the final judgment of a
             9593      court of competent jurisdiction establishing the applicant's right to make the requested filing in
             9594      this state under the name applied for.
             9595          (6) (a) A name is distinguishable from other names, trademarks, and service marks
             9596      registered with the division if it:
             9597          (i) contains one or more different letters or numerals from other names upon the
             9598      division's records; or
             9599          (ii) has a different sequence of letter or numerals from the other names on the division's
             9600      records.
             9601          (b) The following differences are not distinguishable:
             9602          (i) the words or abbreviations of the words:
             9603          (A) "corporation";
             9604          (B) "incorporated";
             9605          (C) "company";
             9606          (D) "limited partnership";


             9607          (E) "limited";
             9608          (F) "L.P.";
             9609          (G) "Ltd.";
             9610          (H) "limited liability company";
             9611          (I) "limited company";
             9612          (J) "L.C."; or
             9613          (K) "L.L.C.";
             9614          (ii) the presence or absence of the words or symbols of the words "the," "and," "a," or
             9615      "plus";
             9616          (iii) differences in punctuation and special characters;
             9617          (iv) differences in capitalization; or
             9618          (v) differences in abbreviations.
             9619          (7) The director of the division shall have the power and authority reasonably necessary
             9620      to interpret and efficiently administer this section and to perform the duties imposed upon the
             9621      division by this section.
             9622          Section 306. Section 16-12-5 is amended to read:
             9623           16-12-5. Limited liability of shareholders or beneficiaries.
             9624          The shareholders or beneficiaries of a real estate investment trust [shall not] are not, as
             9625      such, [be] personally liable for obligations of the real estate investment trust, and shall be under
             9626      no obligation to the trust or its creditors with respect to such shares or interest other than the
             9627      obligation to pay the trust the full amount of consideration for which such shares were issued
             9628      or to be issued.
             9629          Section 307. Section 16-12-6 is amended to read:
             9630           16-12-6. Trustee governed by declaration of trust -- Liability.
             9631          A trustee of a real estate investment trust shall be governed by all the provisions of the
             9632      declaration of trust and [shall not be] is not liable for any claims or damages that may result
             9633      from his acts in the discharge of any duty imposed or power conferred upon him by the trust, if
             9634      he exercises ordinary care, and acts in good faith, but shall be liable for his own willful
             9635      misfeasance or malfeasance. Persons dealing with the trust through the trustees or agents shall
             9636      look to the trust estate for performance of obligations.
             9637          Section 308. Section 16-13-4 is amended to read:


             9638           16-13-4. General powers of business development corporation.
             9639          In furtherance of the purposes of a development corporation, and in addition to the
             9640      powers conferred on corporations by Title 16, Chapter 10a, Utah Revised Business Corporation
             9641      Act, such corporation, subject to the restrictions and limitations contained in this act, shall have
             9642      the following powers:
             9643          (a) To borrow money from lenders, and otherwise incur indebtedness for any of its
             9644      purposes; to issue its bonds, debentures, notes, or other evidences of indebtedness whether
             9645      secured or unsecured therefor; and to secure the same by mortgage, pledge, deed of trust, or
             9646      other lien on its property, franchises, rights and privileges of every kind and nature or any part
             9647      thereof.
             9648          (b) To lend money to, and to guarantee, indorse, or act as surety on the bonds, notes,
             9649      contracts, or other obligations of, or otherwise assist financially, any person, firm, corporation,
             9650      or association, and to establish and regulate the terms and conditions with respect to any such
             9651      loans or financial assistance and the charges for interest and service connected therewith;
             9652      provided, however, that the corporation [shall not] may not approve any application for a loan
             9653      unless and until the applicant shall have shown that the applicant has applied for the loan
             9654      through ordinary financial channels and that the loan has been refused by at least one financial
             9655      institution doing business in this state and, in the ordinary course of its business, granting loans
             9656      similar in amount and kind to the requested loan.
             9657          (c) To purchase, receive, hold, lease, or otherwise acquire, and to sell, convey,
             9658      mortgage, lease, pledge, or otherwise dispose of, upon such terms and conditions as its board of
             9659      directors may deem advisable, real and personal property, together with such rights and
             9660      privileges as may be incidental and appurtenant thereto and the use thereof, including, but not
             9661      restricted to, any real or personal property acquired by such corporation from time to time in
             9662      the satisfaction of debts or enforcement of obligations.
             9663          (d) To acquire the good will, business, rights, real and personal property, and other
             9664      assets, or any part thereof, of such persons, firms, corporations, joint stock companies,
             9665      associations, or trusts as may be in furtherance of the corporate purposes provided herein, and
             9666      to assume, undertake, guarantee, or pay the obligations, debts, and liabilities of any such
             9667      person, firm, corporation, joint stock company, association, or trust; to acquire improved or
             9668      unimproved real estate for the purpose of constructing industrial plants or other business


             9669      establishments thereon or for the purpose of disposing of such real estate to others for the
             9670      construction of industrial plants or other business establishments, and, in furtherance of the
             9671      corporate purposes, to acquire, construct, or reconstruct, alter, repair, maintain, operate, sell,
             9672      lease, or otherwise dispose of industrial plants or business establishments.
             9673          (e) To acquire, subscribe for, own, hold, sell, assign, transfer, mortgage, pledge, or
             9674      otherwise dispose of the stock, shares, bonds, debentures, notes, or other securities and
             9675      evidences of interest in, or indebtedness of, any person, firm, corporation, joint stock company,
             9676      association, or trust, and while the owner or holder thereof, to exercise all the rights, powers,
             9677      and privileges of ownership, including the right to vote thereon, but nothing herein provided
             9678      shall authorize the holding of securities of or otherwise engaging directly or indirectly in a
             9679      business where such holding of securities or engaging in business is not authorized for
             9680      corporations by general law.
             9681          (f) To cooperate with and avail itself of the facilities of state departments and other
             9682      government agencies; and to cooperate with and assist, and otherwise encourage, local
             9683      organizations in the various communities in the state in the promotion, assistance, and
             9684      development of the business prosperity and economic welfare of such communities and of the
             9685      state.
             9686          Section 309. Section 16-13-5 is amended to read:
             9687           16-13-5. Bonds or securities, capital stock of development corporations --
             9688      Authority to purchase, hold, or dispose of -- Rights of holders -- Rights of financial
             9689      institutions.
             9690          (1) All persons, firms, partnerships, associations, trusts and domestic and foreign
             9691      corporations organized or authorized to do business in this state, including, without implied
             9692      limitation, all financial institutions, public utility corporations and insurance corporations, are
             9693      hereby authorized to acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or
             9694      otherwise dispose of any bonds, securities or other evidences of indebtedness created by a
             9695      development corporation, and to exercise all the rights, powers and privileges of ownership
             9696      thereof, all without the approval of any regulatory authority of the state.
             9697          (2) All persons, firms, partnerships, associations, trusts, domestic and foreign
             9698      corporations organized or authorized to do business in this state, including without implied
             9699      limitation all public utility corporations and insurance corporations, other than financial


             9700      institutions, are hereby authorized to acquire, purchase, hold, sell, assign, transfer, mortgage,
             9701      pledge, or otherwise dispose of any of the shares of the capital stock of a development
             9702      corporation, and while owners of said stock to exercise all the rights, powers and privileges of
             9703      ownership, including the right to vote thereon, all without the approval of any regulatory
             9704      authority of the state.
             9705          (3) All financial institutions are hereby authorized to become lenders to development
             9706      corporations and to make loans to the corporations as provided herein, without the approval of
             9707      any regulatory authority of the state.
             9708          (4) A financial institution is authorized to acquire, purchase, hold, sell, assign, transfer,
             9709      mortgage, pledge, or otherwise dispose of, any bonds, securities or other evidences of
             9710      indebtedness created by the corporation in accordance with its provisions for the call of loans,
             9711      and any of the shares of the capital stock of the corporation, and while owners thereof, to
             9712      exercise all the rights, powers and privileges of ownership, including the right to vote, all
             9713      without approval of any regulatory authority of the state; provided, that the amount of the
             9714      capital stock of the corporation which may be acquired by any lender pursuant to the authority
             9715      granted herein [shall not] may not exceed 10% of the loan limit of such lender. The amount of
             9716      capital stock of the corporation which any lender is authorized to acquire pursuant to the
             9717      authority granted herein is in addition to the amount of capital stock in corporations which such
             9718      lender may otherwise be authorized to acquire.
             9719          Section 310. Section 16-13-9 is amended to read:
             9720           16-13-9. Requirement before commencing business -- Cash consideration for
             9721      shares -- Minimum stated capital.
             9722          A development corporation incorporated after July 1, 1979, [shall not] may not transact
             9723      any business or incur any indebtedness, except as is incidental to its organization or to obtain
             9724      subscriptions to or payment for its shares, until there has been paid in for the issuance of shares
             9725      consideration in cash of at least $300,000. A development corporation shall have a stated
             9726      capital of not less than $300,000.
             9727          Section 311. Section 16-13-11 is amended to read:
             9728           16-13-11. Designation of depository.
             9729          A development corporation [shall not] may not deposit any of its funds in any banking
             9730      institution unless such institution has been designated as a depository by a vote of a majority of


             9731      the directors present at an authorized meeting of the board of directors, exclusive of any
             9732      director who is an officer or director of the depository so designated. A development
             9733      corporation [shall not] may not receive money on deposit.
             9734          Section 312. Section 16-16-111 is amended to read:
             9735           16-16-111. Name.
             9736          (1) Use of the term "cooperative" or its abbreviation under this chapter is not a
             9737      violation of the provisions restricting the use of the term under any other law of this state.
             9738          (2) Notwithstanding Section 48-2a-102 , the name of a limited cooperative association
             9739      [must] shall contain the words "limited cooperative association" or "limited cooperative" or the
             9740      abbreviation "L.C.A." or "LCA". "Limited" may be abbreviated as "Ltd.". "Cooperative" may
             9741      be abbreviated as "Co-op" or "Coop". "Association" may be abbreviated as "Assoc." or
             9742      "Assn.". Use of the term "cooperative" or its abbreviation as permitted by this chapter is not a
             9743      violation of the provisions restricting the use of the term under any other law of this state. A
             9744      limited cooperative association or a member may enforce the restrictions on the use of the term
             9745      "cooperative" under this chapter and any other law of this state. A limited cooperative
             9746      association or a member may enforce the restrictions on the use of the term "cooperative" under
             9747      any other law of this state.
             9748          (3) Except as otherwise provided in Subsection (4), a limited cooperative association
             9749      may use only a name that is available. A name is available if it is distinguishable in the records
             9750      of the division from:
             9751          (a) the name of any entity organized or authorized to transact business in this state;
             9752          (b) a name reserved under Section 16-16-112 ; and
             9753          (c) an alternative name approved for a foreign cooperative authorized to transact
             9754      business in this state.
             9755          (4) A limited cooperative association may apply to the division for authorization to use
             9756      a name that is not available. The division shall authorize use of the name if:
             9757          (a) the person with ownership rights to use the name consents in a record to the use and
             9758      applies in a form satisfactory to the division to change the name used or reserved to a name that
             9759      is distinguishable upon the records of the division from the name applied for; or
             9760          (b) the applicant delivers to the division a certified copy of the final judgment of a
             9761      court establishing the applicant's right to use the name in this state.


             9762          Section 313. Section 16-16-112 is amended to read:
             9763           16-16-112. Reservation of name.
             9764          (1) A person may reserve the exclusive use of the name of a limited cooperative
             9765      association, including a fictitious name for a foreign cooperative whose name is not available
             9766      under Section 16-16-111 , by delivering an application to the division for filing. The
             9767      application [must] shall set forth the name and address of the applicant and the name proposed
             9768      to be reserved. If the division finds that the name applied for is available under Section
             9769      16-16-111 , the division shall reserve the name for the applicant's exclusive use for a
             9770      nonrenewable period of 120 days.
             9771          (2) A person that has reserved a name for a limited cooperative association may
             9772      transfer the reservation to another person by delivering to the division a signed notice of the
             9773      transfer which states the name, street address, and, if different, the mailing address of the
             9774      transferee. If the person is an organizer of the association and the name of the association is
             9775      the same as the reserved name, the delivery of articles of organization for filing by the division
             9776      is a transfer by the person to the association.
             9777          Section 314. Section 16-16-113 is amended to read:
             9778           16-16-113. Effect of organic rules.
             9779          (1) The relations between a limited cooperative association and its members are
             9780      consensual. Unless required, limited, or prohibited by this chapter, the organic rules may
             9781      provide for any matter concerning the relations among the members of the association and
             9782      between the members and the association, the activities of the association, and the conduct of
             9783      its activities.
             9784          (2) The matters referred to in Subsections (2)(a) through (i) may be varied only in the
             9785      articles of organization. The articles may:
             9786          (a) state a term of existence for the association under Subsection 16-16-105 (3);
             9787          (b) limit or eliminate the acceptance of new or additional members by the initial board
             9788      of directors under Subsection 16-16-303 (2);
             9789          (c) vary the limitations on the obligations and liability of members for association
             9790      obligations under Section 16-16-504 ;
             9791          (d) require a notice of an annual members meeting to state a purpose of the meeting
             9792      under Subsection 16-16-508 (2);


             9793          (e) vary the board of directors meeting quorum under Subsection 16-16-815 (1);
             9794          (f) vary the matters the board of directors may consider in making a decision under
             9795      Section 16-16-820 ;
             9796          (g) specify causes of dissolution under Subsection 16-16-1202 (1);
             9797          (h) delegate amendment of the bylaws to the board of directors pursuant to Subsection
             9798      16-16-405 (6);
             9799          (i) provide for member approval of asset dispositions under Subsection 16-16-1501 ;
             9800      and
             9801          (j) provide for any matters that may be contained in the organic rules, including those
             9802      under Subsection (3).
             9803          (3) The matters referred to in Subsections (3)(a) through (y) may be varied only in the
             9804      organic rules. The organic rules may:
             9805          (a) require more information to be maintained under Section 16-16-114 or provided to
             9806      members under Subsection 16-16-505 (11);
             9807          (b) provide restrictions on transactions between a member and an association under
             9808      Section 16-16-115 ;
             9809          (c) provide for the percentage and manner of voting on amendments to the organic
             9810      rules by district, class, or voting group under Subsection 16-16-404 (1);
             9811          (d) provide for the percentage vote required to amend the bylaws concerning the
             9812      admission of new members under Subsection 16-16-405 (5)(e);
             9813          (e) provide for terms and conditions to become a member under Section 16-16-502 ;
             9814          (f) restrict the manner of conducting members meetings under Subsections
             9815      16-16-506 (3) and 16-16-507 (5);
             9816          (g) designate the presiding officer of members meetings under Subsections
             9817      16-16-506 (5) and 16-16-507 (7);
             9818          (h) require a statement of purposes in the annual meeting notice under Subsection
             9819      16-16-508 (2);
             9820          (i) increase quorum requirements for members meetings under Section 16-16-510 and
             9821      board of directors meetings under Section 16-16-815 ;
             9822          (j) allocate voting power among members, including patron members and investor
             9823      members, and provide for the manner of member voting and action as permitted by Sections


             9824      16-16-511 through 16-16-517 ;
             9825          (k) authorize investor members and expand or restrict the transferability of members'
             9826      interests to the extent provided in Sections 16-16-602 through 16-16-604 ;
             9827          (l) provide for enforcement of a marketing contract under Subsection 16-16-704 (1);
             9828          (m) provide for qualification, election, terms, removal, filling vacancies, and member
             9829      approval for compensation of directors in accordance with Sections 16-16-803 through
             9830      16-16-805 , 16-16-807 , 16-16-809 , and 16-16-810 ;
             9831          (n) restrict the manner of conducting board meetings and taking action without a
             9832      meeting under Sections 16-16-811 and 16-16-812 ;
             9833          (o) provide for frequency, location, notice and waivers of notice for board meetings
             9834      under Sections 16-16-813 and 16-16-814 ;
             9835          (p) increase the percentage of votes necessary for board action under Subsection
             9836      16-16-816 (2);
             9837          (q) provide for the creation of committees of the board of directors and matters related
             9838      to the committees in accordance with Section 16-16-817 ;
             9839          (r) provide for officers and their appointment, designation, and authority under Section
             9840      16-16-822 ;
             9841          (s) provide for forms and values of contributions under Section 16-16-1002 ;
             9842          (t) provide for remedies for failure to make a contribution under Subsection
             9843      16-16-1003 (2);
             9844          (u) provide for the allocation of profits and losses of the association, distributions, and
             9845      the redemption or repurchase of distributed property other than money in accordance with
             9846      Sections 16-16-1004 through 16-16-1007 ;
             9847          (v) specify when a member's dissociation is wrongful and the liability incurred by the
             9848      dissociating member for damage to the association under Subsections 16-16-1101 (2) and (3);
             9849          (w) provide the personal representative, or other legal representative of, a deceased
             9850      member or a member adjudged incompetent with additional rights under Section 16-16-1103 ;
             9851          (x) increase the percentage of votes required for board of director approval of:
             9852          (i) a resolution to dissolve under Subsection 16-16-1205 (1)(a);
             9853          (ii) a proposed amendment to the organic rules under Subsection 16-16-402 (1)(a);
             9854          (iii) a plan of conversion under Subsection 16-16-1603 (1);


             9855          (iv) a plan of merger under Subsection 16-16-1607 (1); and
             9856          (v) a proposed disposition of assets under Subsection 16-16-1503 (1); and
             9857          (y) vary the percentage of votes required for members' approval of:
             9858          (i) a resolution to dissolve under Section 16-16-1205 ;
             9859          (ii) an amendment to the organic rules under Section 16-16-405 ;
             9860          (iii) a plan of conversion under Section 16-16-1603 ;
             9861          (iv) a plan of merger under Section 16-16-1608 ; and
             9862          (v) a disposition of assets under Section 16-16-1504 .
             9863          (4) The organic rules [must] shall address members' contributions pursuant to Section
             9864      16-16-1001 .
             9865          Section 315. Section 16-16-114 is amended to read:
             9866           16-16-114. Required information.
             9867          (1) Subject to Subsection (2), a limited cooperative association shall maintain in a
             9868      record available at its principal office:
             9869          (a) a list containing the name, last known street address and, if different, mailing
             9870      address, and term of office of each director and officer;
             9871          (b) the initial articles of organization and all amendments to and restatements of the
             9872      articles, together with a signed copy of any power of attorney under which any article,
             9873      amendment, or restatement has been signed;
             9874          (c) the initial bylaws and all amendments to and restatements of the bylaws;
             9875          (d) all filed articles of merger and statements of conversion;
             9876          (e) all financial statements of the association for the six most recent years;
             9877          (f) the six most recent annual reports delivered by the association to the division;
             9878          (g) the minutes of members meetings for the six most recent years;
             9879          (h) evidence of all actions taken by members without a meeting for the six most recent
             9880      years;
             9881          (i) a list containing:
             9882          (i) the name, in alphabetical order, and last known street address and, if different,
             9883      mailing address of each patron member and each investor member; and
             9884          (ii) if the association has districts or classes of members, information from which each
             9885      current member in a district or class may be identified;


             9886          (j) the federal income tax returns, any state and local income tax returns, and any tax
             9887      reports of the association for the six most recent years;
             9888          (k) accounting records maintained by the association in the ordinary course of its
             9889      operations for the six most recent years;
             9890          (l) the minutes of directors meetings for the six most recent years;
             9891          (m) evidence of all actions taken by directors without a meeting for the six most recent
             9892      years;
             9893          (n) the amount of money contributed and agreed to be contributed by each member;
             9894          (o) a description and statement of the agreed value of contributions other than money
             9895      made and agreed to be made by each member;
             9896          (p) the times at which, or events on the happening of which, any additional
             9897      contribution is to be made by each member;
             9898          (q) for each member, a description and statement of the member's interest or
             9899      information from which the description and statement can be derived; and
             9900          (r) all communications concerning the association made in a record to all members, or
             9901      to all members in a district or class, for the six most recent years.
             9902          (2) If a limited cooperative association has existed for less than the period for which
             9903      records [must] are required to be maintained under Subsection (1), the period records [must]
             9904      shall be kept is the period of the association's existence.
             9905          (3) The organic rules may require that more information be maintained.
             9906          Section 316. Section 16-16-117 is amended to read:
             9907           16-16-117. Designated office and agent for service of process.
             9908          (1) A limited cooperative association, or a foreign cooperative that has a certificate of
             9909      authority under Section 16-16-1404 , shall designate and continuously maintain in this state:
             9910          (a) an office, as its designated office, which need not be a place of the association's or
             9911      foreign cooperative's activity in this state; and
             9912          (b) an agent for service of process at the designated office.
             9913          (2) An agent for service of process of a limited cooperative association or foreign
             9914      cooperative [must] shall be an individual who is a resident of this state or an entity that is
             9915      authorized to do business in this state.
             9916          Section 317. Section 16-16-118 is amended to read:


             9917           16-16-118. Change of designated office or agent for service of process.
             9918          (1) Except as otherwise provided in Subsection 16-16-207 (5), to change its designated
             9919      office, its agent for service of process, or the street address or, if different, mailing address of
             9920      its principal office, a limited cooperative association [must] shall deliver to the division for
             9921      filing a statement of change containing:
             9922          (a) the name of the limited cooperative association;
             9923          (b) the street address and, if different, mailing address of its designated office;
             9924          (c) if the designated office is to be changed, the street address and, if different, mailing
             9925      address of the new designated office;
             9926          (d) the name of its agent for service of process; and
             9927          (e) if the agent for service of process is to be changed, the name of the new agent.
             9928          (2) Except as otherwise provided in Subsection 16-16-207 (5), to change its agent for
             9929      service of process, the address of its designated office, or the street address or, if different,
             9930      mailing address of its principal office, a foreign cooperative shall deliver to the division for
             9931      filing a statement of change containing:
             9932          (a) the name of the foreign cooperative;
             9933          (b) the name, street address and, if different, mailing address of its designated office;
             9934          (c) if the current agent for service of process or an address of the designated office is to
             9935      be changed, the new information;
             9936          (d) the street address and, if different, mailing address of its principal office; and
             9937          (e) if the street address or, if different, the mailing address of its principal office is to
             9938      be changed, the street address and, if different, the mailing address of the new principal office.
             9939          (3) Except as otherwise provided in Section 16-16-204 , a statement of change is
             9940      effective when filed by the division.
             9941          Section 318. Section 16-16-119 is amended to read:
             9942           16-16-119. Resignation of agent for service of process.
             9943          (1) To resign as an agent for service of process of a limited cooperative association or
             9944      foreign cooperative, the agent [must] shall deliver to the division for filing a statement of
             9945      resignation containing the name of the agent and the name of the association or foreign
             9946      cooperative.
             9947          (2) After receiving a statement of resignation under Subsection (1), the division shall


             9948      file it and mail or otherwise provide or deliver a copy to the limited cooperative association or
             9949      foreign cooperative at its principal office.
             9950          (3) An agency for service of process of a limited cooperative association or foreign
             9951      cooperative terminates on the earlier of:
             9952          (a) the 31st day after the division files a statement of resignation under Subsection (2);
             9953      or
             9954          (b) when a record designating a new agent for service of process is delivered to the
             9955      division for filing on behalf of the association or foreign cooperative and becomes effective.
             9956          Section 319. Section 16-16-201 is amended to read:
             9957           16-16-201. Signing of records delivered for filing to division.
             9958          (1) A record delivered to the division for filing pursuant to this chapter [must] shall be
             9959      signed as follows:
             9960          (a) The initial articles of organization [must] shall be signed by at least one organizer.
             9961          (b) A statement of cancellation under Subsection 16-16-302 (4) [must] shall be signed
             9962      by at least one organizer.
             9963          (c) Except as otherwise provided in Subsection (1)(d), a record signed on behalf of an
             9964      existing limited cooperative association [must] shall be signed by an officer.
             9965          (d) A record filed on behalf of a dissolved association [must] shall be signed by a
             9966      person winding up activities under Section 16-16-1206 or a person appointed under Section
             9967      16-16-1206 to wind up those activities.
             9968          (e) Any other record [must] shall be signed by the person on whose behalf the record is
             9969      delivered to the division.
             9970          (2) Any record to be signed under this chapter may be signed by an authorized agent.
             9971          Section 320. Section 16-16-203 is amended to read:
             9972           16-16-203. Delivery to and filing of records by division -- Effective time and date.
             9973          (1) A record authorized or required by this chapter to be delivered to the division for
             9974      filing [must] shall be captioned to describe the record's purpose, be in a medium and format
             9975      permitted by the division, and be delivered to the division. If the filing fees have been paid,
             9976      and unless the division determines that the record does not comply with the filing requirements
             9977      of this chapter, the division shall file the record.
             9978          (2) The division, upon request and payment of the required fee, shall furnish a certified


             9979      copy of any record filed by the division under this chapter to the person making the request.
             9980          (3) Except as otherwise provided in Sections 16-16-118 and 16-16-204 , a record
             9981      delivered to the division for filing under this chapter may specify an effective time and a
             9982      delayed effective date that may include an effective time on that date. Except as otherwise
             9983      provided in Sections 16-16-118 and 16-16-204 , a record filed by the division under this chapter
             9984      is effective:
             9985          (a) if the record does not specify an effective time and does not specify a delayed
             9986      effective date, on the date and at the time the record is filed as evidenced by the division's
             9987      endorsement of the date and time on the record;
             9988          (b) if the record specifies an effective time but not a delayed effective date, on the date
             9989      the record is filed at the time specified in the record;
             9990          (c) if the record specifies a delayed effective date but not an effective time, at 12:01
             9991      a.m. on the earlier of:
             9992          (i) the specified date; or
             9993          (ii) the 90th day after the record is filed; or
             9994          (d) if the record specifies an effective time and a delayed effective date, at the specified
             9995      time on the earlier of:
             9996          (i) the specified date; or
             9997          (ii) the 90th day after the record is filed.
             9998          Section 321. Section 16-16-204 is amended to read:
             9999           16-16-204. Correcting filed record.
             10000          (1) A limited cooperative association or foreign cooperative may deliver to the division
             10001      for filing a statement of correction to correct a record previously delivered by the association or
             10002      foreign cooperative to the division and filed by the division if, at the time of filing, the record
             10003      contained inaccurate information or was defectively signed.
             10004          (2) A statement of correction may not state a delayed effective date and [must] shall:
             10005          (a) describe the record to be corrected, including its filing date, or have attached a copy
             10006      of the record as filed;
             10007          (b) specify the inaccurate information and the reason it is inaccurate or the manner in
             10008      which the signing was defective; and
             10009          (c) correct the inaccurate information or defective signature.


             10010          (3) When filed by the division, a statement of correction is effective:
             10011          (a) when filed as to persons relying on the inaccurate information or defective signature
             10012      before its correction and adversely affected by the correction; and
             10013          (b) as to all other persons, retroactively as of the effective date and time of the record
             10014      the statement corrects.
             10015          Section 322. Section 16-16-207 is amended to read:
             10016           16-16-207. Annual report for division.
             10017          (1) A limited cooperative association or foreign cooperative authorized to transact
             10018      business in this state shall deliver to the division for filing an annual report that states:
             10019          (a) the name of the association or foreign cooperative;
             10020          (b) the street address and, if different, mailing address of the association's or foreign
             10021      cooperative's designated office and the name of its agent for service of process at the
             10022      designated office;
             10023          (c) the street address and, if different, mailing address of the association's or foreign
             10024      cooperative's principal office; and
             10025          (d) in the case of a foreign cooperative, the state or other jurisdiction under whose law
             10026      the foreign cooperative is formed and any alternative name adopted under Section 16-16-1405 .
             10027          (2) Information in an annual report [must] shall be current as of the date the report is
             10028      delivered to the division.
             10029          (3) The first annual report [must] shall be delivered to the division between January 1
             10030      and April 1 of the year following the calendar year in which the limited cooperative association
             10031      is formed or the foreign cooperative is authorized to transact business in this state. For
             10032      subsequent years, an annual report [must] shall be delivered to the division during the month in
             10033      which falls the anniversary of the limited cooperative association's organization or the foreign
             10034      cooperative's authorization to transact business.
             10035          (4) If an annual report does not contain the information required by Subsection (1), the
             10036      division shall promptly notify the reporting limited cooperative association or foreign
             10037      cooperative and return the report for correction. If the report is corrected to contain the
             10038      information required by Subsection (1) and delivered to the division not later than 30 days after
             10039      the date of the notice from the division, it is timely delivered.
             10040          (5) If a filed annual report contains an address of the designated office, name of the


             10041      agent for service of process, or address of the principal office which differs from the
             10042      information shown in the records of the division immediately before the filing, the differing
             10043      information in the annual report is considered a statement of change.
             10044          (6) If a limited cooperative association fails to deliver an annual report under this
             10045      section, the division may proceed under Section 16-16-1211 to dissolve the association
             10046      administratively.
             10047          (7) If a foreign cooperative fails to deliver an annual report under this section, the
             10048      division may revoke the certificate of authority of the cooperative.
             10049          Section 323. Section 16-16-301 is amended to read:
             10050           16-16-301. Organizers.
             10051          A limited cooperative association [must] shall be organized by one or more organizers.
             10052          Section 324. Section 16-16-302 is amended to read:
             10053           16-16-302. Formation of limited cooperative association -- Articles of
             10054      organization.
             10055          (1) To form a limited cooperative association, an organizer of the association [must]
             10056      shall deliver articles of organization to the division for filing. The articles [must] shall state:
             10057          (a) the name of the association;
             10058          (b) the purposes for which the association is formed;
             10059          (c) the street address and, if different, mailing address of the association's initial
             10060      designated office and the name of the association's initial agent for service of process at the
             10061      designated office;
             10062          (d) the street address and, if different, mailing address of the initial principal office;
             10063          (e) the name and street address and, if different, mailing address of each organizer; and
             10064          (f) the term for which the association is to exist if other than perpetual.
             10065          (2) Subject to Subsection 16-16-113 (1), articles of organization may contain any other
             10066      provisions in addition to those required by Subsection (1).
             10067          (3) A limited cooperative association is formed after articles of organization that
             10068      substantially comply with Subsection (1) are delivered to the division, are filed, and become
             10069      effective under Subsection 16-16-203 (3).
             10070          (4) If articles of organization filed by the division state a delayed effective date, a
             10071      limited cooperative association is not formed if, before the articles take effect, an organizer


             10072      signs and delivers to the division for filing a statement of cancellation.
             10073          Section 325. Section 16-16-304 is amended to read:
             10074           16-16-304. Bylaws.
             10075          (1) Bylaws [must] shall be in a record and, if not stated in the articles of organization,
             10076      [must] shall include:
             10077          (a) a statement of the capital structure of the limited cooperative association, including:
             10078          (i) the classes or other types of members' interests and relative rights, preferences, and
             10079      restrictions granted to or imposed upon each class or other type of member's interest; and
             10080          (ii) the rights to share in profits or distributions of the association;
             10081          (b) a statement of the method for admission of members;
             10082          (c) a statement designating voting and other governance rights, including which
             10083      members have voting power and any restriction on voting power;
             10084          (d) a statement that a member's interest is transferable if it is to be transferable and a
             10085      statement of the conditions upon which it may be transferred;
             10086          (e) a statement concerning the manner in which profits and losses are allocated and
             10087      distributions are made among patron members and, if investor members are authorized, the
             10088      manner in which profits and losses are allocated and how distributions are made among
             10089      investor members and between patron members and investor members;
             10090          (f) a statement concerning:
             10091          (i) whether persons that are not members but conduct business with the association
             10092      may be permitted to share in allocations of profits and losses and receive distributions; and
             10093          (ii) the manner in which profits and losses are allocated and distributions are made
             10094      with respect to those persons; and
             10095          (g) a statement of the number and terms of directors or the method by which the
             10096      number and terms are determined.
             10097          (2) Subject to Subsection 16-16-113 (3) and the articles of organization, bylaws may
             10098      contain any other provision for managing and regulating the affairs of the association.
             10099          (3) In addition to amendments permitted under Part 4, Amendment of Organic Rules of
             10100      Limited Cooperative Association, the initial board of directors may amend the bylaws by a
             10101      majority vote of the directors at any time before the admission of members.
             10102          Section 326. Section 16-16-402 is amended to read:


             10103           16-16-402. Notice and action on amendment of organic rules.
             10104          (1) Except as provided in Subsections 16-16-401 (1) and 16-16-405 (6), the organic
             10105      rules of a limited cooperative association may be amended only at a members meeting. An
             10106      amendment may be proposed by either:
             10107          (a) a majority of the board of directors, or a greater percentage if required by the
             10108      organic rules; or
             10109          (b) one or more petitions signed by at least 10% of the patron members or at least 10%
             10110      of the investor members.
             10111          (2) The board of directors shall call a members meeting to consider an amendment
             10112      proposed pursuant to Subsection (1). The meeting [must] shall be held not later than 90 days
             10113      following the proposal of the amendment by the board or receipt of a petition. The board
             10114      [must] shall mail or otherwise transmit or deliver in a record to each member:
             10115          (a) the proposed amendment, or a summary of the proposed amendment and a
             10116      statement of the manner in which a copy of the amendment in a record may be reasonably
             10117      obtained by a member;
             10118          (b) a recommendation that the members approve the amendment, or if the board
             10119      determines that because of conflict of interest or other special circumstances it should not make
             10120      a favorable recommendation, the basis for that determination;
             10121          (c) a statement of any condition of the board's submission of the amendment to the
             10122      members; and
             10123          (d) notice of the meeting at which the proposed amendment will be considered, which
             10124      [must] shall be given in the same manner as notice for a special meeting of members.
             10125          Section 327. Section 16-16-403 is amended to read:
             10126           16-16-403. Change to amendment of organic rules at meeting.
             10127          (1) A substantive change to a proposed amendment of the organic rules may not be
             10128      made at the members meeting at which a vote on the amendment occurs.
             10129          (2) A nonsubstantive change to a proposed amendment of the organic rules may be
             10130      made at the members meeting at which the vote on the amendment occurs and need not be
             10131      separately voted upon by the board of directors.
             10132          (3) A vote to adopt a nonsubstantive change to a proposed amendment to the organic
             10133      rules [must] shall be by the same percentage of votes required to pass a proposed amendment.


             10134          Section 328. Section 16-16-404 is amended to read:
             10135           16-16-404. Voting by district, class, or voting group.
             10136          (1) This section applies if the organic rules provide for voting by district or class, or if
             10137      there is one or more identifiable voting groups that a proposed amendment to the organic rules
             10138      would affect differently from other members with respect to matters identified in Subsections
             10139      16-16-405 (5)(a) through (e). Approval of the amendment requires the same percentage of
             10140      votes of the members of that district, class, or voting group required in Sections 16-16-405 and
             10141      16-16-514 .
             10142          (2) If a proposed amendment to the organic rules would affect members in two or more
             10143      districts or classes entitled to vote separately under Subsection (1) in the same or a substantially
             10144      similar way, the districts or classes affected [must] shall vote as a single voting group unless
             10145      the organic rules otherwise provide for separate voting.
             10146          Section 329. Section 16-16-405 is amended to read:
             10147           16-16-405. Approval of amendment.
             10148          (1) Subject to Section 16-16-404 and Subsections (3) and (4), an amendment to the
             10149      articles of organization [must] shall be approved by:
             10150          (a) at least two-thirds of the voting power of members present at a members meeting
             10151      called under Section 16-16-402 ; and
             10152          (b) if the limited cooperative association has investor members, at least a majority of
             10153      the votes cast by patron members, unless the organic rules require a greater percentage vote by
             10154      patron members.
             10155          (2) Subject to Section 16-16-404 and Subsections (3), (4), (5), and (6), an amendment
             10156      to the bylaws [must] shall be approved by:
             10157          (a) at least a majority vote of the voting power of all members present at a members
             10158      meeting called under Section 16-16-402 , unless the organic rules require a greater percentage;
             10159      and
             10160          (b) if a limited cooperative association has investor members, a majority of the votes
             10161      cast by patron members, unless the organic rules require a larger affirmative vote by patron
             10162      members.
             10163          (3) The organic rules may require that the percentage of votes under Subsection (1)(a)
             10164      or (2)(a) be:


             10165          (a) a different percentage that is not less than a majority of members voting at the
             10166      meeting;
             10167          (b) measured against the voting power of all members; or
             10168          (c) a combination of Subsections (3)(a) and (b).
             10169          (4) Consent in a record by a member [must] shall be delivered to a limited cooperative
             10170      association before delivery of an amendment to the articles of organization or restated articles
             10171      of organization for filing pursuant to Section 16-16-407 , if as a result of the amendment the
             10172      member will have:
             10173          (a) personal liability for an obligation of the association; or
             10174          (b) an obligation or liability for an additional contribution.
             10175          (5) The vote required to amend bylaws [must] shall satisfy the requirements of
             10176      Subsection (1) if the proposed amendment modifies:
             10177          (a) the equity capital structure of the limited cooperative association, including the
             10178      rights of the association's members to share in profits or distributions, or the relative rights,
             10179      preferences, and restrictions granted to or imposed upon one or more districts, classes, or
             10180      voting groups of similarly situated members;
             10181          (b) the transferability of a member's interest;
             10182          (c) the manner or method of allocation of profits or losses among members;
             10183          (d) the quorum for a meeting and the rights of voting and governance; or
             10184          (e) unless otherwise provided in the organic rules, the terms for admission of new
             10185      members.
             10186          (6) Except for the matters described in Subsection (5), the articles of organization may
             10187      delegate amendment of all or a part of the bylaws to the board of directors without requiring
             10188      member approval.
             10189          (7) If the articles of organization delegate amendment of bylaws to the board of
             10190      directors, the board shall provide a description of any amendment of the bylaws made by the
             10191      board to the members in a record not later than 30 days after the amendment, but the
             10192      description may be provided at the next annual members meeting if the meeting is held within
             10193      the 30-day period.
             10194          Section 330. Section 16-16-407 is amended to read:
             10195           16-16-407. Amendment or restatement of articles of organization--Filing.


             10196          (1) To amend its articles of organization, a limited cooperative association [must] shall
             10197      deliver to the division for filing an amendment of the articles, or restated articles of
             10198      organization or articles of conversion or merger pursuant to Part 16, Conversion and Merger,
             10199      which contain one or more amendments of the articles of organization, stating:
             10200          (a) the name of the association;
             10201          (b) the date of filing of the association's initial articles; and
             10202          (c) the changes the amendment makes to the articles as most recently amended or
             10203      restated.
             10204          (2) Before the beginning of the initial meeting of the board of directors, an organizer
             10205      who knows that information in the filed articles of organization was inaccurate when the
             10206      articles were filed or has become inaccurate due to changed circumstances shall promptly:
             10207          (a) cause the articles to be amended; or
             10208          (b) if appropriate, deliver an amendment to the division for filing pursuant to Section
             10209      16-16-203 .
             10210          (3) If restated articles of organization are adopted, the restated articles may be
             10211      delivered to the division for filing in the same manner as an amendment.
             10212          (4) Upon filing, an amendment of the articles of organization or other record
             10213      containing an amendment of the articles which has been properly adopted by the members is
             10214      effective as provided in Subsection 16-16-203 (3).
             10215          Section 331. Section 16-16-501 is amended to read:
             10216           16-16-501. Members.
             10217          To begin business, a limited cooperative association [must] shall have at least two
             10218      patron members unless the sole member is a cooperative.
             10219          Section 332. Section 16-16-507 is amended to read:
             10220           16-16-507. Special meeting of members.
             10221          (1) A special meeting of members may be called only:
             10222          (a) as provided in the organic rules;
             10223          (b) by a majority vote of the board of directors on a proposal stating the purpose of the
             10224      meeting;
             10225          (c) by demand in a record signed by members holding at least 20% of the voting power
             10226      of the persons in any district or class entitled to vote on the matter that is the purpose of the


             10227      meeting stated in the demand; or
             10228          (d) by demand in a record signed by members holding at least 10% of the total voting
             10229      power of all the persons entitled to vote on the matter that is the purpose of the meeting stated
             10230      in the demand.
             10231          (2) A demand under Subsection (1)(c) or (d) [must] shall be submitted to the officer of
             10232      the limited cooperative association charged with keeping its records.
             10233          (3) Any voting member may withdraw its demand under Subsection (1)(c) or (d) before
             10234      receipt by the limited cooperative association of demands sufficient to require a special
             10235      meeting of members.
             10236          (4) A special meeting of members may be held inside or outside this state at the place
             10237      stated in the organic rules or selected by the board of directors not inconsistent with the organic
             10238      rules.
             10239          (5) Unless the organic rules otherwise provide, members may attend or conduct a
             10240      special meeting of members through the use of any means of communication if all members
             10241      attending the meeting can communicate with each other during the meeting.
             10242          (6) Only business within the purpose or purposes stated in the notice of a special
             10243      meeting of members may be conducted at the meeting.
             10244          (7) Unless the organic rules otherwise provide, the presiding officer of a special
             10245      meeting of members shall be designated by the board of directors.
             10246          Section 333. Section 16-16-508 is amended to read:
             10247           16-16-508. Notice of members meeting.
             10248          (1) A limited cooperative association shall notify each member of the time, date, and
             10249      place of a members meeting at least 15 and not more than 60 days before the meeting.
             10250          (2) Unless the articles of organization otherwise provide, notice of an annual members
             10251      meeting need not include any purpose of the meeting.
             10252          (3) Notice of a special meeting of members [must] shall include each purpose of the
             10253      meeting as contained in the demand under Subsection 16-16-507 (1)(c) or (d) or as voted upon
             10254      by the board of directors under Subsection 16-16-507 (1)(b).
             10255          (4) Notice of a members meeting [must] shall be given in a record unless oral notice is
             10256      reasonable under the circumstances.
             10257          Section 334. Section 16-16-603 is amended to read:


             10258           16-16-603. Transferability of member's interest.
             10259          (1) The provisions of this chapter relating to the transferability of a member's interest
             10260      are subject to Title 70A, Uniform Commercial Code.
             10261          (2) Unless the organic rules otherwise provide, a member's interest other than financial
             10262      rights is not transferable.
             10263          (3) Unless a transfer is restricted or prohibited by the organic rules, a member may
             10264      transfer the member's financial rights in the limited cooperative association.
             10265          (4) The terms of any restriction on transferability of financial rights [must] shall be:
             10266          (a) set forth in the organic rules and the member records of the association; and
             10267          (b) conspicuously noted on any certificates evidencing a member's interest.
             10268          (5) A transferee of a member's financial rights, to the extent the rights are transferred,
             10269      has the right to share in the allocation of profits or losses and to receive the distributions to the
             10270      member transferring the interest to the same extent as the transferring member.
             10271          (6) A transferee of a member's financial rights does not become a member upon
             10272      transfer of the rights unless the transferee is admitted as a member by the limited cooperative
             10273      association.
             10274          (7) A limited cooperative association need not give effect to a transfer under this
             10275      section until the association has notice of the transfer.
             10276          (8) A transfer of a member's financial rights in violation of a restriction on transfer
             10277      contained in the organic rules is ineffective as to a person having notice of the restriction at the
             10278      time of transfer.
             10279          Section 335. Section 16-16-801 is amended to read:
             10280           16-16-801. Board of directors.
             10281          (1) A limited cooperative association [must] shall have a board of directors of at least
             10282      three individuals, unless the association has fewer than three members. If the association has
             10283      fewer than three members, the number of directors may not be fewer than the number of
             10284      members.
             10285          (2) The affairs of a limited cooperative association [must] shall be managed by, or
             10286      under the direction of, the board of directors. The board may adopt policies and procedures
             10287      that do not conflict with the organic rules or this chapter.
             10288          (3) An individual is not an agent for a limited cooperative association solely by being a


             10289      director.
             10290          Section 336. Section 16-16-803 is amended to read:
             10291           16-16-803. Qualifications of directors.
             10292          (1) Unless the organic rules otherwise provide, and subject to Subsection (3), each
             10293      director of a limited cooperative association [must] shall be an individual who is a member of
             10294      the association or an individual who is designated by a member that is not an individual for
             10295      purposes of qualifying and serving as a director. Initial directors need not be members.
             10296          (2) Unless the organic rules otherwise provide, a director may be an officer or
             10297      employee of the limited cooperative association.
             10298          (3) If the organic rules provide for nonmember directors, the number of nonmember
             10299      directors may not exceed:
             10300          (a) one, if there are two through four directors;
             10301          (b) two, if there are five through eight directors; or
             10302          (c) 1/3 of the total number of directors if there are at least nine directors.
             10303          (4) The organic rules may provide qualifications for directors in addition to those in
             10304      this section.
             10305          Section 337. Section 16-16-804 is amended to read:
             10306           16-16-804. Election of directors and composition of board.
             10307          (1) Unless the organic rules require a greater number:
             10308          (a) the number of directors that [must] shall be patron members may not be fewer than:
             10309          (i) one, if there are two or three directors;
             10310          (ii) two, if there are four or five directors;
             10311          (iii) three, if there are six through eight directors; or
             10312          (iv) 1/3 of the directors if there are at least nine directors; and
             10313          (b) a majority of the board of directors [must] shall be elected exclusively by patron
             10314      members.
             10315          (2) Unless the organic rules otherwise provide, if a limited cooperative association has
             10316      investor members, the directors who are not elected exclusively by patron members are elected
             10317      by the investor members.
             10318          (3) Subject to Subsection (1), the organic rules may provide for the election of all or a
             10319      specified number of directors by one or more districts or classes of members.


             10320          (4) Subject to Subsection (1), the organic rules may provide for the nomination or
             10321      election of directors by districts or classes, directly or by district delegates.
             10322          (5) If a class of members consists of a single member, the organic rules may provide
             10323      for the member to appoint a director or directors.
             10324          (6) Unless the organic rules otherwise provide, cumulative voting for directors is
             10325      prohibited.
             10326          (7) Except as otherwise provided by the organic rules, Subsection (5), or Sections
             10327      16-16-303 , 16-16-516 , 16-16-517 , and 16-16-809 , member directors [must] shall be elected at
             10328      an annual members meeting.
             10329          Section 338. Section 16-16-809 is amended to read:
             10330           16-16-809. Vacancy on board.
             10331          (1) Unless the organic rules otherwise provide, a vacancy on the board of directors
             10332      [must] shall be filled:
             10333          (a) within a reasonable time by majority vote of the remaining directors until the next
             10334      annual members meeting or a special meeting of members called to fill the vacancy; and
             10335          (b) for the unexpired term by members at the next annual members meeting or a
             10336      special meeting of members called to fill the vacancy.
             10337          (2) Unless the organic rules otherwise provide, if a vacating director was elected or
             10338      appointed by a class of members or a district:
             10339          (a) the new director [must] shall be of that class or district; and
             10340          (b) the selection of the director for the unexpired term [must] shall be conducted in the
             10341      same manner as would the selection for that position without a vacancy.
             10342          (3) If a member appointed a vacating director, the organic rules may provide for that
             10343      member to appoint a director to fill the vacancy.
             10344          Section 339. Section 16-16-813 is amended to read:
             10345           16-16-813. Meetings and notice.
             10346          (1) Unless the organic rules otherwise provide, a board of directors may establish a
             10347      time, date, and place for regular board meetings, and notice of the time, date, place, or purpose
             10348      of those meetings is not required.
             10349          (2) Unless the organic rules otherwise provide, notice of the time, date, and place of a
             10350      special meeting of a board of directors [must] shall be given to all directors at least three days


             10351      before the meeting, the notice [must] shall contain a statement of the purpose of the meeting,
             10352      and the meeting is limited to the matters contained in the statement.
             10353          Section 340. Section 16-16-1001 is amended to read:
             10354           16-16-1001. Members' contributions.
             10355          The organic rules [must] shall establish the amount, manner, or method of determining
             10356      any contribution requirements for members or [must] shall authorize the board of directors to
             10357      establish the amount, manner, or other method of determining any contribution requirements
             10358      for members.
             10359          Section 341. Section 16-16-1002 is amended to read:
             10360           16-16-1002. Contribution and valuation.
             10361          (1) Unless the organic rules otherwise provide, the contributions of a member to a
             10362      limited cooperative association may consist of tangible or intangible property or other benefit
             10363      to the association, including money, labor or other services performed or to be performed,
             10364      promissory notes, other agreements to contribute money or property, and contracts to be
             10365      performed.
             10366          (2) The receipt and acceptance of contributions and the valuation of contributions
             10367      [must] shall be reflected in a limited cooperative association's records.
             10368          (3) Unless the organic rules otherwise provide, the board of directors shall determine
             10369      the value of a member's contributions received or to be received and the determination by the
             10370      board of directors of valuation is conclusive for purposes of determining whether the member's
             10371      contribution obligation has been met.
             10372          Section 342. Section 16-16-1004 is amended to read:
             10373           16-16-1004. Allocations of profits and losses.
             10374          (1) The organic rules may provide for allocating profits of a limited cooperative
             10375      association among members, among persons that are not members but conduct business with
             10376      the association, to an unallocated account, or to any combination thereof. Unless the organic
             10377      rules otherwise provide, losses of the association [must] shall be allocated in the same
             10378      proportion as profits.
             10379          (2) Unless the organic rules otherwise provide, all profits and losses of a limited
             10380      cooperative association [must] shall be allocated to patron members.
             10381          (3) If a limited cooperative association has investor members, the organic rules may


             10382      not reduce the allocation to patron members to less than 50% of profits. For purposes of this
             10383      Subsection (3), the following rules apply:
             10384          (a) Amounts paid or due on contracts for the delivery to the association by patron
             10385      members of products, goods, or services are not considered amounts allocated to patron
             10386      members.
             10387          (b) Amounts paid, due, or allocated to investor members as a stated fixed return on
             10388      equity are not considered amounts allocated to investor members.
             10389          (4) Unless prohibited by the organic rules, in determining the profits for allocation
             10390      under Subsections (1), (2), and (3), the board of directors may first deduct and set aside a part
             10391      of the profits to create or accumulate:
             10392          (a) an unallocated capital reserve; and
             10393          (b) reasonable unallocated reserves for specific purposes, including expansion and
             10394      replacement of capital assets; education, training, cooperative development; creation and
             10395      distribution of information concerning principles of cooperation; and community
             10396      responsibility.
             10397          (5) Subject to Subsections (2) and (6) and the organic rules, the board of directors shall
             10398      allocate the amount remaining after any deduction or setting aside of profits for unallocated
             10399      reserves under Subsection (4):
             10400          (a) to patron members in the ratio of each member's patronage to the total patronage of
             10401      all patron members during the period for which allocations are to be made; and
             10402          (b) to investor members, if any, in the ratio of each investor member's contributions to
             10403      the total contributions of all investor members.
             10404          (6) For purposes of allocation of profits and losses or specific items of profits or losses
             10405      of a limited cooperative association to members, the organic rules may establish allocation
             10406      units or methods based on separate classes of members or, for patron members, on class,
             10407      function, division, district, department, allocation units, pooling arrangements, members'
             10408      contributions, or other equitable methods.
             10409          Section 343. Section 16-16-1202 is amended to read:
             10410           16-16-1202. Nonjudicial dissolution.
             10411          Except as otherwise provided in Sections 16-16-1203 and 16-16-1211 , a limited
             10412      cooperative association is dissolved and its activities [must] shall be wound up:


             10413          (1) upon the occurrence of an event or at a time specified in the articles of
             10414      organization;
             10415          (2) upon the action of the association's organizers, board of directors, or members
             10416      under Section 16-16-1204 or 16-16-1205 ; or
             10417          (3) 90 days after the dissociation of a member, which results in the association having
             10418      one patron member and no other members, unless the association:
             10419          (a) has a sole member that is a cooperative; or
             10420          (b) not later than the end of the 90-day period, admits at least one member in
             10421      accordance with the organic rules and has at least two members, at least one of which is a
             10422      patron member.
             10423          Section 344. Section 16-16-1205 is amended to read:
             10424           16-16-1205. Voluntary dissolution by the board and members.
             10425          (1) Except as otherwise provided in Section 16-16-1204 , for a limited cooperative
             10426      association to voluntarily dissolve:
             10427          (a) a resolution to dissolve [must] shall be approved by a majority vote of the board of
             10428      directors unless a greater percentage is required by the organic rules;
             10429          (b) the board of directors [must] shall call a members meeting to consider the
             10430      resolution, to be held not later than 90 days after adoption of the resolution; and
             10431          (c) the board of directors [must] shall mail or otherwise transmit or deliver to each
             10432      member in a record that complies with Section 16-16-508 :
             10433          (i) the resolution required by Subsection (1)(a);
             10434          (ii) a recommendation that the members vote in favor of the resolution or, if the board
             10435      determines that because of conflict of interest or other special circumstances it should not make
             10436      a favorable recommendation, the basis of that determination; and
             10437          (iii) notice of the members meeting, which [must] shall be given in the same manner as
             10438      notice of a special meeting of members.
             10439          (2) Subject to Subsection (3), a resolution to dissolve [must] shall be approved by:
             10440          (a) at least two-thirds of the voting power of members present at a members meeting
             10441      called under Subsection (1)(b); and
             10442          (b) if the limited cooperative association has investor members, at least a majority of
             10443      the votes cast by patron members, unless the organic rules require a greater percentage.


             10444          (3) The organic rules may require that the percentage of votes under Subsection (2)(a)
             10445      is:
             10446          (a) a different percentage that is not less than a majority of members voting at the
             10447      meeting;
             10448          (b) measured against the voting power of all members; or
             10449          (c) a combination of Subsections (3)(a) and (b).
             10450          Section 345. Section 16-16-1208 is amended to read:
             10451           16-16-1208. Known claims against dissolved limited cooperative association.
             10452          (1) Subject to Subsection (4), a dissolved limited cooperative association may dispose
             10453      of the known claims against it by following the procedure in Subsections (2) and (3).
             10454          (2) A dissolved limited cooperative association may notify its known claimants of the
             10455      dissolution in a record. The notice [must] shall:
             10456          (a) specify that a claim be in a record;
             10457          (b) specify the information required to be included in the claim;
             10458          (c) provide an address to which the claim [must] shall be sent;
             10459          (d) state the deadline for receipt of the claim, which may not be less than 120 days after
             10460      the date the notice is received by the claimant; and
             10461          (e) state that the claim will be barred if not received by the deadline.
             10462          (3) A claim against a dissolved limited cooperative association is barred if the
             10463      requirements of Subsection (2) are met, and:
             10464          (a) the association is not notified of the claimant's claim, in a record, by the deadline
             10465      specified in the notice under Subsection (2)(d);
             10466          (b) in the case of a claim that is timely received but rejected by the association, the
             10467      claimant does not commence an action to enforce the claim against the association not later
             10468      than 90 days after receipt of the notice of the rejection; or
             10469          (c) if a claim is timely received but is neither accepted nor rejected by the association
             10470      not later than 120 days after the deadline for receipt of claims, the claimant does not commence
             10471      an action to enforce the claim against the association:
             10472          (i) after the 120-day period; and
             10473          (ii) not later than 90 days after the 120-day period.
             10474          (4) This section does not apply to a claim based on an event occurring after the date of


             10475      dissolution or a liability that is contingent on that date.
             10476          Section 346. Section 16-16-1209 is amended to read:
             10477           16-16-1209. Other claims against dissolved limited cooperative association.
             10478          (1) A dissolved limited cooperative association may publish notice of its dissolution
             10479      and request persons having claims against the association to present them in accordance with
             10480      the notice.
             10481          (2) A notice under Subsection (1) [must] shall:
             10482          (a) be published:
             10483          (i) at least once in a newspaper of general circulation in the county in which the
             10484      dissolved limited cooperative association's principal office is located or, if the association does
             10485      not have a principal office in this state, in the county in which the association's designated
             10486      office is or was last located; and
             10487          (ii) as required in Section 45-1-101 ;
             10488          (b) describe the information required to be contained in a claim and provide an address
             10489      to which the claim is to be sent; and
             10490          (c) state that a claim against the association is barred unless an action to enforce the
             10491      claim is commenced not later than three years after publication of the notice.
             10492          (3) If a dissolved limited cooperative association publishes a notice in accordance with
             10493      Subsection (2), the claim of each of the following claimants is barred unless the claimant
             10494      commences an action to enforce the claim not later than three years after the first publication
             10495      date of the notice:
             10496          (a) a claimant that is entitled to but did not receive notice in a record under Section
             10497      16-16-1208 ; and
             10498          (b) a claimant whose claim is contingent or based on an event occurring after the
             10499      effective date of dissolution.
             10500          (4) A claim not barred under this section may be enforced:
             10501          (a) against a dissolved limited cooperative association, to the extent of its undistributed
             10502      assets; or
             10503          (b) if the association's assets have been distributed in connection with winding up the
             10504      association's activities against a member or holder of financial rights to the extent of that
             10505      person's proportionate share of the claim or the association's assets distributed to the person in


             10506      connection with the winding up, whichever is less. The person's total liability for all claims
             10507      under this Subsection (4) [shall not] may not exceed the total amount of assets distributed to
             10508      the person as part of the winding up of the association.
             10509          Section 347. Section 16-16-1212 is amended to read:
             10510           16-16-1212. Reinstatement following administrative dissolution.
             10511          (1) A limited cooperative association that has been dissolved administratively may
             10512      apply to the division for reinstatement not later than two years after the effective date of
             10513      dissolution. The application [must] shall be delivered to the division for filing and state:
             10514          (a) the name of the association and the effective date of its administrative dissolution;
             10515          (b) that the grounds for dissolution either did not exist or have been eliminated; and
             10516          (c) that the association's name satisfies the requirements of Section 16-16-111 .
             10517          (2) If the division determines that an application contains the information required by
             10518      Subsection (1) and that the information is correct, the division shall:
             10519          (a) prepare a declaration of reinstatement;
             10520          (b) file the original of the declaration; and
             10521          (c) serve a copy of the declaration on the association.
             10522          (3) When reinstatement under this section becomes effective, it relates back to and
             10523      takes effect as of the effective date of the administrative dissolution, and the limited
             10524      cooperative association may resume or continue its activities as if the administrative
             10525      dissolution had not occurred.
             10526          Section 348. Section 16-16-1213 is amended to read:
             10527           16-16-1213. Denial of reinstatement -- Appeal.
             10528          (1) If the division denies a limited cooperative association's application for
             10529      reinstatement following administrative dissolution, the division shall prepare and file a notice
             10530      that explains the reason for denial and serve the association with a copy of the notice.
             10531          (2) Not later than 30 days after service of a notice of denial of reinstatement by the
             10532      division, a limited cooperative association may appeal the denial by petitioning the district
             10533      court to set aside the dissolution. The petition [must] shall be served on the division and
             10534      contain a copy of the division's declaration of dissolution, the association's application for
             10535      reinstatement, and the division's notice of denial.
             10536          (3) The court may summarily order the division to reinstate the dissolved cooperative


             10537      association or may take other action the court considers appropriate.
             10538          Section 349. Section 16-16-1303 is amended to read:
             10539           16-16-1303. Pleading.
             10540          In a derivative action to enforce a right of a limited cooperative association, the
             10541      complaint [must] shall state:
             10542          (1) the date and content of the plaintiff's demand under Subsection 16-16-1301 (1) and
             10543      the association's response;
             10544          (2) if 90 days have not expired since the demand, how irreparable harm to the
             10545      association would result by waiting for the expiration of 90 days; and
             10546          (3) if the association agreed to bring an action demanded, that the action has not been
             10547      brought within a reasonable time.
             10548          Section 350. Section 16-16-1402 is amended to read:
             10549           16-16-1402. Application for certificate of authority.
             10550          (1) A foreign cooperative may apply for a certificate of authority by delivering an
             10551      application to the division for filing. The application [must] shall state:
             10552          (a) the name of the foreign cooperative and, if the name does not comply with Section
             10553      16-16-111 , an alternative name adopted pursuant to Section 16-16-1405 ;
             10554          (b) the name of the state or other jurisdiction under whose law the foreign cooperative
             10555      is organized;
             10556          (c) the street address and, if different, mailing address of the principal office and, if the
             10557      law of the jurisdiction under which the foreign cooperative is organized requires the foreign
             10558      cooperative to maintain another office in that jurisdiction, the street address and, if different,
             10559      mailing address of the required office;
             10560          (d) the street address and, if different, mailing address of the foreign cooperative's
             10561      designated office in this state, and the name of the foreign cooperative's agent for service of
             10562      process at the designated office; and
             10563          (e) the name, street address and, if different, mailing address of each of the foreign
             10564      cooperative's current directors and officers.
             10565          (2) A foreign cooperative shall deliver with a completed application under Subsection
             10566      (1) a certificate of good standing or a similar record signed by the division or other official
             10567      having custody of the foreign cooperative's publicly filed records in the state or other


             10568      jurisdiction under whose law the foreign cooperative is organized.
             10569          Section 351. Section 16-16-1405 is amended to read:
             10570           16-16-1405. Noncomplying name of foreign cooperative.
             10571          (1) A foreign cooperative whose name does not comply with Section 16-16-111 may
             10572      not obtain a certificate of authority until it adopts, for the purpose of transacting business in
             10573      this state, an alternative name that complies with Section 16-16-111 . A foreign cooperative
             10574      that adopts an alternative name under this Subsection (1) and then obtains a certificate of
             10575      authority with that name need not also comply with Section 42-2-5 . After obtaining a
             10576      certificate of authority with an alternative name, a foreign cooperative's business in this state
             10577      [must] shall be transacted under that name unless the foreign cooperative is authorized under
             10578      Section 42-2-5 to transact business in this state under another name.
             10579          (2) If a foreign cooperative authorized to transact business in this state changes its
             10580      name to one that does not comply with Section 16-16-111 , it may not thereafter transact
             10581      business in this state until it complies with Subsection (1) and obtains an amended certificate of
             10582      authority.
             10583          Section 352. Section 16-16-1406 is amended to read:
             10584           16-16-1406. Revocation of certificate of authority.
             10585          (1) A certificate of authority may be revoked by the division in the manner provided in
             10586      Subsection (2) if the foreign cooperative does not:
             10587          (a) pay, not later than 60 days after the due date, any fee, tax, or penalty due to the
             10588      division under this chapter or any other law of this state;
             10589          (b) deliver, not later than 60 days after the due date, its annual report;
             10590          (c) appoint and maintain an agent for service of process; or
             10591          (d) deliver for filing a statement of change not later than 30 days after a change has
             10592      occurred in the name of the agent or the address of the foreign cooperative's designated office.
             10593          (2) To revoke a certificate of authority, the division [must] shall file a notice of
             10594      revocation and send a copy to the foreign cooperative's registered agent for service of process
             10595      in this state or, if the foreign cooperative does not appoint and maintain an agent for service of
             10596      process in this state, to the foreign cooperative's principal office. The notice [must] shall state:
             10597          (a) the revocation's effective date, which [must] shall be at least 60 days after the date
             10598      the division sends the copy; and


             10599          (b) the foreign cooperative's noncompliance that is the reason for the revocation.
             10600          (3) The authority of a foreign cooperative to transact business in this state ceases on the
             10601      effective date of the notice of revocation unless before that date the foreign cooperative cures
             10602      each failure to comply stated in the notice. If the foreign cooperative cures the failures, the
             10603      division shall so indicate on the filed notice.
             10604          Section 353. Section 16-16-1407 is amended to read:
             10605           16-16-1407. Cancellation of certificate of authority -- Effect of failure to have
             10606      certificate.
             10607          (1) To cancel its certificate of authority, a foreign cooperative [must] shall deliver to
             10608      the division for filing a notice of cancellation. The certificate is canceled when the notice
             10609      becomes effective under Section 16-16-203 .
             10610          (2) A foreign cooperative transacting business in this state may not maintain an action
             10611      or proceeding in this state unless it has a certificate of authority.
             10612          (3) The failure of a foreign cooperative to have a certificate of authority does not
             10613      impair the validity of a contract or act of the foreign cooperative or prevent the foreign
             10614      cooperative from defending an action or proceeding in this state.
             10615          (4) A member of a foreign cooperative is not liable for the obligations of the foreign
             10616      cooperative solely by reason of the foreign cooperative's having transacted business in this state
             10617      without a certificate of authority.
             10618          (5) If a foreign cooperative transacts business in this state without a certificate of
             10619      authority or cancels its certificate, it appoints the division as its agent for service of process for
             10620      an action arising out of the transaction of business in this state.
             10621          Section 354. Section 16-16-1503 is amended to read:
             10622           16-16-1503. Notice and action on disposition of assets.
             10623          For a limited cooperative association to dispose of assets under Section 16-16-1502 :
             10624          (1) a majority of the board of directors, or a greater percentage if required by the
             10625      organic rules, [must] shall approve the proposed disposition; and
             10626          (2) the board of directors [must] shall call a members meeting to consider the proposed
             10627      disposition, hold the meeting not later than 90 days after approval of the proposed disposition
             10628      by the board, and mail or otherwise transmit or deliver in a record to each member:
             10629          (a) the terms of the proposed disposition;


             10630          (b) a recommendation that the members approve the disposition, or if the board
             10631      determines that because of conflict of interest or other special circumstances it should not make
             10632      a favorable recommendation, the basis for that determination;
             10633          (c) a statement of any condition of the board's submission of the proposed disposition
             10634      to the members; and
             10635          (d) notice of the meeting at which the proposed disposition will be considered, which
             10636      [must] shall be given in the same manner as notice of a special meeting of members.
             10637          Section 355. Section 16-16-1504 is amended to read:
             10638           16-16-1504. Disposition of assets.
             10639          (1) Subject to Subsection (2), a disposition of assets under Section 16-16-1502 [must]
             10640      shall be approved by:
             10641          (a) at least two-thirds of the voting power of members present at a members meeting
             10642      called under Subsection 16-16-1503 (2); and
             10643          (b) if the limited cooperative association has investor members, at least a majority of
             10644      the votes cast by patron members, unless the organic rules require a greater percentage vote by
             10645      patron members.
             10646          (2) The organic rules may require that the percentage of votes under Subsection (1)(a)
             10647      is:
             10648          (a) a different percentage that is not less than a majority of members voting at the
             10649      meeting;
             10650          (b) measured against the voting power of all members; or
             10651          (c) a combination of Subsections (2)(a) and (b).
             10652          (3) Subject to any contractual obligations, after a disposition of assets is approved and
             10653      at any time before the consummation of the disposition, a limited cooperative association may
             10654      approve an amendment to the contract for disposition or the resolution authorizing the
             10655      disposition or approve abandonment of the disposition:
             10656          (a) as provided in the contract or the resolution; and
             10657          (b) except as prohibited by the resolution, with the same affirmative vote of the board
             10658      of directors and of the members as was required to approve the disposition.
             10659          (4) The voting requirements for districts, classes, or voting groups under Section
             10660      16-16-404 apply to approval of a disposition of assets under this part.


             10661          Section 356. Section 16-16-1602 is amended to read:
             10662           16-16-1602. Conversion.
             10663          (1) An entity that is not a limited cooperative association may convert to a limited
             10664      cooperative association and a limited cooperative association may convert to an entity that is
             10665      not a limited cooperative association pursuant to this section, Sections 16-16-1603 through
             10666      16-16-1605 , and a plan of conversion, if:
             10667          (a) the other entity's organic law authorizes the conversion;
             10668          (b) the conversion is not prohibited by the law of the jurisdiction that enacted the other
             10669      entity's organic law; and
             10670          (c) the other entity complies with its organic law in effecting the conversion.
             10671          (2) A plan of conversion [must] shall be in a record and [must] shall include:
             10672          (a) the name and form of the entity before conversion;
             10673          (b) the name and form of the entity after conversion;
             10674          (c) the terms and conditions of the conversion, including the manner and basis for
             10675      converting interests in the converting entity into any combination of money, interests in the
             10676      converted entity, and other consideration; and
             10677          (d) the organizational documents of the proposed converted entity.
             10678          Section 357. Section 16-16-1603 is amended to read:
             10679           16-16-1603. Action on plan of conversion by converting limited cooperative
             10680      association.
             10681          (1) For a limited cooperative association to convert to another entity, a plan of
             10682      conversion [must] shall be approved by a majority of the board of directors, or a greater
             10683      percentage if required by the organic rules, and the board of directors [must] shall call a
             10684      members meeting to consider the plan of conversion, hold the meeting not later than 90 days
             10685      after approval of the plan by the board, and mail or otherwise transmit or deliver in a record to
             10686      each member:
             10687          (a) the plan, or a summary of the plan and a statement of the manner in which a copy of
             10688      the plan in a record may be reasonably obtained by a member;
             10689          (b) a recommendation that the members approve the plan of conversion, or if the board
             10690      determines that because of a conflict of interest or other circumstances it should not make a
             10691      favorable recommendation, the basis for that determination;


             10692          (c) a statement of any condition of the board's submission of the plan of conversion to
             10693      the members; and
             10694          (d) notice of the meeting at which the plan of conversion will be considered, which
             10695      [must] shall be given in the same manner as notice of a special meeting of members.
             10696          (2) Subject to Subsections (3) and (4), a plan of conversion [must] shall be approved
             10697      by:
             10698          (a) at least two-thirds of the voting power of members present at a members meeting
             10699      called under Subsection (1); and
             10700          (b) if the limited cooperative association has investor members, at least a majority of
             10701      the votes cast by patron members, unless the organic rules require a greater percentage vote by
             10702      patron members.
             10703          (3) The organic rules may require that the percentage of votes under Subsection (2)(a)
             10704      is:
             10705          (a) a different percentage that is not less than a majority of members voting at the
             10706      meeting;
             10707          (b) measured against the voting power of all members; or
             10708          (c) a combination of Subsections (3)(a) and (b).
             10709          (4) The vote required to approve a plan of conversion may not be less than the vote
             10710      required for the members of the limited cooperative association to amend the articles of
             10711      organization.
             10712          (5) Consent in a record to a plan of conversion by a member [must] shall be delivered
             10713      to the limited cooperative association before delivery of articles of conversion for filing if as a
             10714      result of the conversion the member will have:
             10715          (a) personal liability for an obligation of the association; or
             10716          (b) an obligation or liability for an additional contribution.
             10717          (6) Subject to Subsection (5) and any contractual rights, after a conversion is approved
             10718      and at any time before the effective date of the conversion, a converting limited cooperative
             10719      association may amend a plan of conversion or abandon the planned conversion:
             10720          (a) as provided in the plan; and
             10721          (b) except as prohibited by the plan, by the same affirmative vote of the board of
             10722      directors and of the members as was required to approve the plan.


             10723          (7) The voting requirements for districts, classes, or voting groups under Section
             10724      16-16-404 apply to approval of a conversion under this part.
             10725          Section 358. Section 16-16-1604 is amended to read:
             10726           16-16-1604. Filings required for conversion -- Effective date.
             10727          (1) After a plan of conversion is approved:
             10728          (a) a converting limited cooperative association shall deliver to the division for filing
             10729      articles of conversion, which [must] shall include:
             10730          (i) a statement that the limited cooperative association has been converted into another
             10731      entity;
             10732          (ii) the name and form of the converted entity and the jurisdiction of its governing
             10733      statute;
             10734          (iii) the date the conversion is effective under the governing statute of the converted
             10735      entity;
             10736          (iv) a statement that the conversion was approved as required by this chapter;
             10737          (v) a statement that the conversion was approved as required by the governing statute
             10738      of the converted entity; and
             10739          (vi) if the converted entity is an entity organized in a jurisdiction other than this state
             10740      and is not authorized to transact business in this state, the street address and, if different,
             10741      mailing address of an office which the division may use for purposes of Section 16-16-120 ; and
             10742          (b) if the converting entity is not a converting limited cooperative association, the
             10743      converting entity shall deliver to the division for filing articles of organization, which [must]
             10744      shall include, in addition to the information required by Section 16-16-302 :
             10745          (i) a statement that the association was converted from another entity;
             10746          (ii) the name and form of the converting entity and the jurisdiction of its governing
             10747      statute; and
             10748          (iii) a statement that the conversion was approved in a manner that complied with the
             10749      converting entity's governing statute.
             10750          (2) A conversion becomes effective:
             10751          (a) if the converted entity is a limited cooperative association, when the articles of
             10752      conversion take effect pursuant to Subsection 16-16-203 (3); or
             10753          (b) if the converted entity is not a limited cooperative association, as provided by the


             10754      governing statute of the converted entity.
             10755          Section 359. Section 16-16-1606 is amended to read:
             10756           16-16-1606. Merger.
             10757          (1) One or more limited cooperative associations may merge with one or more other
             10758      entities pursuant to this part and a plan of merger if:
             10759          (a) the governing statute of each of the other entities authorizes the merger;
             10760          (b) the merger is not prohibited by the law of a jurisdiction that enacted any of those
             10761      governing statutes; and
             10762          (c) each of the other entities complies with its governing statute in effecting the
             10763      merger.
             10764          (2) A plan of merger [must] shall be in a record and [must] shall include:
             10765          (a) the name and form of each constituent entity;
             10766          (b) the name and form of the surviving entity and, if the surviving entity is to be
             10767      created by the merger, a statement to that effect;
             10768          (c) the terms and conditions of the merger, including the manner and basis for
             10769      converting the interests in each constituent entity into any combination of money, interests in
             10770      the surviving entity, and other consideration;
             10771          (d) if the surviving entity is to be created by the merger, the surviving entity's
             10772      organizational documents;
             10773          (e) if the surviving entity is not to be created by the merger, any amendments to be
             10774      made by the merger to the surviving entity's organizational documents; and
             10775          (f) if a member of a constituent limited cooperative association will have personal
             10776      liability with respect to a surviving entity, the identity of the member by descriptive class or
             10777      other reasonable manner.
             10778          Section 360. Section 16-16-1607 is amended to read:
             10779           16-16-1607. Notice and action on plan of merger by constituent limited
             10780      cooperative association.
             10781          (1) For a limited cooperative association to merge with another entity, a plan of merger
             10782      [must] shall be approved by a majority vote of the board of directors or a greater percentage if
             10783      required by the association's organic rules.
             10784          (2) The board of directors shall call a members meeting to consider a plan of merger


             10785      approved by the board, hold the meeting not later than 90 days after approval of the plan by the
             10786      board, and mail or otherwise transmit or deliver in a record to each member:
             10787          (a) the plan of merger, or a summary of the plan and a statement of the manner in
             10788      which a copy of the plan in a record may be reasonably obtained by a member;
             10789          (b) a recommendation that the members approve the plan of merger, or if the board
             10790      determines that because of conflict of interest or other special circumstances it should not make
             10791      a favorable recommendation, the basis for that determination;
             10792          (c) a statement of any condition of the board's submission of the plan of merger to the
             10793      members; and
             10794          (d) notice of the meeting at which the plan of merger will be considered, which [must]
             10795      shall be given in the same manner as notice of a special meeting of members.
             10796          Section 361. Section 16-16-1608 is amended to read:
             10797           16-16-1608. Approval or abandonment of merger by members.
             10798          (1) Subject to Subsections (2) and (3), a plan of merger [must] shall be approved by:
             10799          (a) at least two-thirds of the voting power of members present at a members meeting
             10800      called under Subsection 16-16-1607 (2); and
             10801          (b) if the limited cooperative association has investor members, at least a majority of
             10802      the votes cast by patron members, unless the organic rules require a greater percentage vote by
             10803      patron members.
             10804          (2) The organic rules may provide that the percentage of votes under Subsection (1)(a)
             10805      is:
             10806          (a) a different percentage that is not less than a majority of members voting at the
             10807      meeting;
             10808          (b) measured against the voting power of all members; or
             10809          (c) a combination of Subsections (2)(a) and (b).
             10810          (3) The vote required to approve a plan of merger may not be less than the vote
             10811      required for the members of the limited cooperative association to amend the articles of
             10812      organization.
             10813          (4) Consent in a record to a plan of merger by a member [must] shall be delivered to
             10814      the limited cooperative association before delivery of articles of merger for filing pursuant to
             10815      Section 16-16-1609 if as a result of the merger the member will have:


             10816          (a) personal liability for an obligation of the association; or
             10817          (b) an obligation or liability for an additional contribution.
             10818          (5) Subject to Subsection (4) and any contractual rights, after a merger is approved, and
             10819      at any time before the effective date of the merger, a limited cooperative association that is a
             10820      party to the merger may approve an amendment to the plan of merger or approve abandonment
             10821      of the planned merger:
             10822          (a) as provided in the plan; and
             10823          (b) except as prohibited by the plan, with the same affirmative vote of the board of
             10824      directors and of the members as was required to approve the plan.
             10825          (6) The voting requirements for districts, classes, or voting groups under Section
             10826      16-16-404 apply to approval of a merger under this part.
             10827          Section 362. Section 16-16-1609 is amended to read:
             10828           16-16-1609. Filings required for merger -- Effective date.
             10829          (1) After each constituent entity has approved a merger, articles of merger [must] shall
             10830      be signed on behalf of each constituent entity by an authorized representative.
             10831          (2) The articles of merger [must] shall include:
             10832          (a) the name and form of each constituent entity and the jurisdiction of its governing
             10833      statute;
             10834          (b) the name and form of the surviving entity, the jurisdiction of its governing statute,
             10835      and, if the surviving entity is created by the merger, a statement to that effect;
             10836          (c) the date the merger is effective under the governing statute of the surviving entity;
             10837          (d) if the surviving entity is to be created by the merger and:
             10838          (i) will be a limited cooperative association, the limited cooperative association's
             10839      articles of organization; or
             10840          (ii) will be an entity other than a limited cooperative association, the organizational
             10841      document that creates the entity;
             10842          (e) if the surviving entity is not created by the merger, any amendments provided for in
             10843      the plan of merger to the organizational document that created the entity;
             10844          (f) a statement as to each constituent entity that the merger was approved as required
             10845      by the entity's governing statute;
             10846          (g) if the surviving entity is a foreign organization not authorized to transact business


             10847      in this state, the street address and, if different, mailing address of an office which the division
             10848      may use for the purposes of Section 16-16-120 ; and
             10849          (h) any additional information required by the governing statute of any constituent
             10850      entity.
             10851          (3) Each limited cooperative association that is a party to a merger shall deliver the
             10852      articles of merger to the division for filing.
             10853          (4) A merger becomes effective under this part:
             10854          (a) if the surviving entity is a limited cooperative association, upon the later of:
             10855          (i) compliance with Subsection (3); or
             10856          (ii) subject to Subsection 16-16-203 (3), as specified in the articles of merger; or
             10857          (b) if the surviving entity is not a limited cooperative association, as provided by the
             10858      governing statute of the surviving entity.
             10859          Section 363. Section 16-16-1701 is amended to read:
             10860           16-16-1701. Uniformity of application and construction.
             10861          In applying and construing this uniform act, consideration [must] shall be given to the
             10862      need to promote uniformity of the law with respect to its subject matter among states that enact
             10863      it.
             10864          Section 364. Section 16-17-202 is amended to read:
             10865           16-17-202. Addresses in filings.
             10866          Whenever a provision of this chapter other than Subsection 16-17-209 (1)(d) requires
             10867      that a filing state an address, the filing [must] shall state:
             10868          (1) an actual street address or rural route box number in this state; and
             10869          (2) a mailing address in this state, if different from the address under Subsection (1).
             10870          Section 365. Section 16-17-203 is amended to read:
             10871           16-17-203. Appointment of registered agent.
             10872          (1) A registered agent filing [must] shall state:
             10873          (a) the name of the represented entity's commercial registered agent; or
             10874          (b) if the entity does not have a commercial registered agent:
             10875          (i) the name and address of the entity's noncommercial registered agent; or
             10876          (ii) the title of an office or other position with the entity if service of process is to be
             10877      sent to the person holding that office or position, and the address of the business office of that


             10878      person.
             10879          (2) The appointment of a registered agent pursuant to Subsection (1)(a) or (b)(i) is an
             10880      affirmation by the represented entity that the agent has consented to serve as such.
             10881          (3) The division shall make available in a record as soon as practicable a daily list of
             10882      filings that contain the name of a registered agent. The list [must] shall:
             10883          (a) be available for at least 14 calendar days;
             10884          (b) list in alphabetical order the names of the registered agents; and
             10885          (c) state the type of filing and name of the represented entity making the filing.
             10886          Section 366. Section 16-17-204 is amended to read:
             10887           16-17-204. Listing of commercial registered agent.
             10888          (1) An individual or a domestic or foreign entity may become listed as a commercial
             10889      registered agent by filing with the division a commercial registered agent listing statement
             10890      signed by or on behalf of the person which states:
             10891          (a) the name of the individual or the name, type, and jurisdiction of organization of the
             10892      entity;
             10893          (b) that the person is in the business of serving as a commercial registered agent in this
             10894      state; and
             10895          (c) the address of a place of business of the person in this state to which service of
             10896      process and other notice and documents being served on or sent to entities represented by it
             10897      may be delivered.
             10898          (2) A commercial registered agent listing statement may include the information
             10899      regarding acceptance of service of process in a record by the commercial registered agent
             10900      provided for in Subsection 16-17-301 (4).
             10901          (3) If the name of a person filing a commercial registered agent listing statement is not
             10902      distinguishable on the records of the division from the name of another commercial registered
             10903      agent listed under this section, the person [must] shall adopt a fictitious name that is
             10904      distinguishable and use that name in its statement and when it does business in this state as a
             10905      commercial registered agent.
             10906          (4) A commercial registered agent listing statement takes effect on filing.
             10907          (5) The division shall note the filing of the commercial registered agent listing
             10908      statement in the index of filings maintained by the division for each entity represented by the


             10909      registered agent at the time of the filing. The statement has the effect of deleting the address of
             10910      the registered agent from the registered agent filing of each of those entities.
             10911          Section 367. Section 16-17-210 is amended to read:
             10912           16-17-210. Appointment of agent by nonfiling or nonqualified foreign entity.
             10913          (1) A domestic entity that is not a filing entity or a nonqualified foreign entity may file
             10914      with the division a statement appointing an agent for service of process signed on behalf of the
             10915      entity which states:
             10916          (a) the name, type, and jurisdiction of organization of the entity; and
             10917          (b) the information required by Subsection 16-17-203 (1).
             10918          (2) A statement appointing an agent for service of process takes effect on filing.
             10919          (3) The appointment of a registered agent under this section does not qualify a
             10920      nonqualified foreign entity to do business in this state and is not sufficient alone to create
             10921      personal jurisdiction over the nonqualified foreign entity in this state.
             10922          (4) A statement appointing an agent for service of process may not be rejected for
             10923      filing because the name of the entity filing the statement is not distinguishable on the records of
             10924      the division from the name of another entity appearing in those records. The filing of a
             10925      statement appointing an agent for service of process does not make the name of the entity filing
             10926      the statement unavailable for use by another entity.
             10927          (5) An entity that has filed a statement appointing an agent for service of process may
             10928      cancel the statement by filing a statement of cancellation, which shall take effect upon filing,
             10929      and [must] shall state the name of the entity and that the entity is canceling its appointment of
             10930      an agent for service of process in this state. A statement appointing an agent for service of
             10931      process which has not been canceled earlier is effective for a period of five years after the date
             10932      of filing.
             10933          (6) A statement appointing an agent for service of process for a nonqualified foreign
             10934      entity terminates automatically on the date the entity becomes a qualified foreign entity.
             10935          Section 368. Section 16-17-301 is amended to read:
             10936           16-17-301. Service of process on entities.
             10937          (1) A registered agent is an agent of the represented entity authorized to receive service
             10938      of any process, notice, or demand required or permitted by law to be served on the entity.
             10939          (2) If an entity that previously filed a registered agent filing with the division no longer


             10940      has a registered agent, or if its registered agent cannot with reasonable diligence be served, the
             10941      entity may be served by registered or certified mail, return receipt requested, addressed to the
             10942      governors of the entity by name at its principal office in accordance with any applicable
             10943      judicial rules and procedures. The names of the governors and the address of the principal
             10944      office may be as shown in the most recent annual report filed with the division. Service is
             10945      perfected under this Subsection (2) at the earliest of:
             10946          (a) the date the entity receives the mail;
             10947          (b) the date shown on the return receipt, if signed on behalf of the entity; or
             10948          (c) five days after its deposit with the United States Postal Service, if correctly
             10949      addressed and with sufficient postage.
             10950          (3) If process, notice, or demand cannot be served on an entity pursuant to Subsection
             10951      (1) or (2), service of process may be made by handing a copy to the manager, clerk, or other
             10952      person in charge of any regular place of business or activity of the entity if the person served is
             10953      not a plaintiff in the action.
             10954          (4) Service of process, notice, or demand on a registered agent [must] shall be in the
             10955      form of a written document, except that service may be made on a commercial registered agent
             10956      in such other forms of a record, and subject to such requirements as the agent has stated from
             10957      time to time in its listing under Section 16-17-204 that it will accept.
             10958          (5) Service of process, notice, or demand may be perfected by any other means
             10959      prescribed by law other than this chapter.
             10960          Section 369. Section 16-17-402 is amended to read:
             10961           16-17-402. Consistency of application.
             10962          In applying and construing this chapter, consideration [must] shall be given to the need
             10963      to promote consistency of the law with respect to its subject matter among states that enact it.




Legislative Review Note
    as of 1-27-10 9:59 AM


Office of Legislative Research and General Counsel


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