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S.B. 95 Enrolled

             1     

UTAH EDUCATIONAL SAVINGS PLAN

             2     
AMENDMENTS

             3     
2010 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Wayne L. Niederhauser

             6     
House Sponsor: Gregory H. Hughes

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies provisions related to the Utah Educational Savings Plan.
             11      Highlighted Provisions:
             12          This bill:
             13          .    amends the governance and oversight authority of the State Board of Regents for
             14      the Utah Educational Savings Plan;
             15          .    modifies Utah Educational Savings Plan provisions, including:
             16              .    clarifying the plan's name, powers, and duties;
             17              .    beginning with the 2011 taxable year, eliminating a requirement to reduce the
             18      value of the Utah Educational Savings Plan tax credit or deduction when the
             19      Consumer Price Index decreases from one year to the next; and
             20              .    exempting certain withdrawals from the add back provisions of a Utah state
             21      income tax credit or deduction previously claimed;
             22          .    defines terms; and
             23          .    makes technical changes.
             24      Monies Appropriated in this Bill:
             25          None
             26      Other Special Clauses:
             27          This bill provides an immediate effective date.
             28      Utah Code Sections Affected:
             29      AMENDS:


             30          53B-8-110, as last amended by Laws of Utah 2009, Chapter 329
             31          53B-8a-101, as last amended by Laws of Utah 2008, Chapter 196
             32          53B-8a-102, as last amended by Laws of Utah 2008, Chapter 196
             33          53B-8a-103, as last amended by Laws of Utah 2007, Chapter 100
             34          53B-8a-104, as last amended by Laws of Utah 2007, Chapter 100
             35          53B-8a-105, as last amended by Laws of Utah 2009, Chapter 356
             36          53B-8a-106, as last amended by Laws of Utah 2008, Chapters 196 and 389
             37          53B-8a-107, as last amended by Laws of Utah 2008, Chapter 196
             38          53B-8a-108, as last amended by Laws of Utah 2008, Chapter 196
             39          53B-8a-109, as last amended by Laws of Utah 2008, Chapter 196
             40          53B-8a-110, as enacted by Laws of Utah 1996, Second Special Session, Chapter 4
             41          53B-8a-111, as last amended by Laws of Utah 2008, Chapter 196
             42          53B-8a-112, as last amended by Laws of Utah 2007, Chapter 100
             43          53B-8a-113, as last amended by Laws of Utah 2007, Chapter 100
             44          59-1-403, as last amended by Laws of Utah 2009, Chapters 31, 45, 64, 203, and 251
             45          59-7-105, as last amended by Laws of Utah 2008, Chapter 389
             46          59-7-106, as last amended by Laws of Utah 2009, Chapter 312
             47          59-10-114, as last amended by Laws of Utah 2008, Chapters 382 and 389
             48          59-10-201, as last amended by Laws of Utah 2008, Chapter 389
             49          59-10-202, as last amended by Laws of Utah 2008, Chapters 382 and 389
             50          59-10-1017, as renumbered and amended by Laws of Utah 2008, Chapter 389
             51          59-10-1313, as enacted by Laws of Utah 2009, Chapter 251
             52          63G-2-305, as last amended by Laws of Utah 2009, Chapters 64 and 121
             53     
             54      Be it enacted by the Legislature of the state of Utah:
             55          Section 1. Section 53B-8-110 is amended to read:
             56           53B-8-110. Regents' Scholarship Program -- Supplemental award to encourage
             57      college savings.


             58          (1) A student who qualifies for the Base Regents' Scholarship in accordance with the
             59      provisions of Section 53B-8-109 may be awarded up to an additional $400 as provided in this
             60      section.
             61          (2) A student who qualifies for the Base Regents' Scholarship shall be awarded $100
             62      for a year that:
             63          (a) the student was 14, 15, 16, or 17 years of age; and
             64          (b) at least $100 in contributions, excluding transfers, investment earnings, and
             65      interest, was deposited in a Utah Educational Savings Plan [Trust] account that designated the
             66      student as the beneficiary.
             67          Section 2. Section 53B-8a-101 is amended to read:
             68     
CHAPTER 8a. UTAH EDUCATIONAL SAVINGS PLAN

             69           53B-8a-101. Purpose.
             70          (1) (a) The Legislature finds that the general welfare and well-being of the state are
             71      directly related to educational levels and skills of the citizens of the state.
             72          (b) Therefore, a vital and valid public purpose is served by the creation and
             73      implementation of programs which encourage and make possible the attainment of higher
             74      education by the greatest number of citizens of the state.
             75          (2) (a) The Legislature finds that the state has limited resources to provide additional
             76      programs for higher education funding and that the continued operation and maintenance of
             77      the state's public institutions of higher education and the general welfare of the citizens of the
             78      state will be enhanced by establishing a [program] plan which allows citizens of the state to
             79      invest money in a public trust for future application to the payment of higher education costs.
             80          (b) The Legislature further finds that [a program] the plan described in Subsection
             81      (2)(a) serves a vital and valid public purpose.
             82          (3) (a) In order to make available to the citizens of the state an opportunity to fund
             83      future higher education needs, it is necessary that a public trust be established in which
             84      moneys may be invested for future educational use.
             85          (b) It may also be necessary to establish and create an endowment fund, which may be


             86      funded with public funds, among other sources, the income from which may be made
             87      available to account owners to enhance or encourage their savings invested for future higher
             88      education costs or for use in scholarship or other college savings incentive programs.
             89          Section 3. Section 53B-8a-102 is amended to read:
             90           53B-8a-102. Definitions.
             91          As used in this chapter:
             92          (1) "Account agreement" means an agreement between an account owner and the Utah
             93      Educational Savings Plan [Trust] entered into under this chapter.
             94          (2) "Account owner" means a person, estate, or trust, if that person, estate, or trust has
             95      entered into an account agreement under this chapter to save for the higher education costs on
             96      behalf of a beneficiary.
             97          (3) "Administrative fund" means the moneys used to administer the Utah Educational
             98      Savings Plan [Trust].
             99          (4) "Beneficiary" means the individual designated in an account agreement to benefit
             100      from the amount saved for higher education costs.
             101          (5) "Board" means the board of directors of the Utah Educational Savings Plan [Trust]
             102      which is the state Board of Regents acting in its capacity as the Utah Higher Education
             103      Assistance Authority under Title 53B, Chapter 12, Higher Education Assistance Authority.
             104          (6) "Endowment fund" means the endowment fund established under Section
             105      53B-8a-107 which is held as a separate fund within the Utah Educational Savings Plan
             106      [Trust].
             107          (7) "Executive director" means the administrator appointed to administer and manage
             108      the Utah Educational Savings Plan.
             109          [(7)] (8) "Higher education costs" means qualified higher education expenses as
             110      defined in Section 529(e)(3), Internal Revenue Code.
             111          (9) "Plan" means the Utah Educational Savings Plan created in Section 53B-8a-103 .
             112          [(8) "Program administrator" means the administrator of the Utah Educational Savings
             113      Plan Trust appointed by the board to administer and manage the Utah Educational Savings


             114      Plan Trust.]
             115          [(9)] (10) "Program fund" means the program fund created under Section 53B-8a-107 ,
             116      which is held as a separate fund within the Utah Educational Savings Plan [Trust].
             117          [(10)] (11) "Qualified investment" means an amount invested in accordance with an
             118      account agreement established under this chapter.
             119          [(11)] (12) "Tuition and fees" means the quarterly or semester charges imposed to
             120      attend an institution of higher education and required as a condition of enrollment.
             121          [(12) "Utah Educational Savings Plan Trust" means the Utah Educational Savings
             122      Plan Trust created under Section 53B-8a-103 .]
             123          Section 4. Section 53B-8a-103 is amended to read:
             124           53B-8a-103. Creation of Utah Educational Savings Plan -- Powers and duties of
             125      plan.
             126          (1) There is created the Utah Educational Savings Plan [Trust], which may also be
             127      known and function as the Utah Educational Savings Plan Trust.
             128          [(2) The board is the trustee of the Utah Educational Savings Plan Trust.]
             129          (2) The plan:
             130          (a) is a non-profit, self-supporting agency that administers a public trust;
             131          (b) shall administer the various programs, funds, trusts, plans, functions, duties, and
             132      obligations assigned to the plan:
             133          (i) consistent with sound fiduciary principles; and
             134          (ii) subject to review of the board; and
             135          (c) shall be known as and managed as a qualified tuition program in compliance with
             136      Section 529, Internal Revenue Code, that is sponsored by the state.
             137          (3) [The board, in the capacity of trustee,] The plan may:
             138          [(a) exercise any authority granted by law to the Board of Regents;]
             139          [(b)] (a) make and enter into contracts necessary for the administration of the [Utah
             140      Educational Savings Plan Trust created under this chapter;] plan payable from plan moneys,
             141      including:


             142          (i) contracts for goods and services; and
             143          (ii) contracts to engage:
             144          (A) personnel, including consultants, actuaries, managers, counsel, and auditors for
             145      the purpose of rendering professional, managerial, and technical assistance and advice; and
             146          (B) one or more investment advisors, registered under the Investment Advisers Act of
             147      1940, with at least 5,000 advisory clients and at least $1,000,000,000 under management, to
             148      provide investment advice to the board with respect to the assets held in each account;
             149          [(c)] (b) adopt a corporate seal and change and amend it from time to time;
             150          [(d)] (c) invest moneys within the program fund:
             151          (i) (A) in any investments that are determined by the board to be appropriate [and are
             152      approved by the state treasurer]; or
             153          (B) in mutual funds registered under the Investment Company Act of 1940, consistent
             154      with the best interests of a designated beneficiary's higher education funding needs; and
             155          (ii) that are in compliance with rules of the State Money Management Council
             156      applicable to gift funds;
             157          [(e)] (d) invest moneys within the endowment fund in any investments that are:
             158          (i) determined by the board to be appropriate;
             159          (ii) approved by the state treasurer; and
             160          (iii) in compliance with rules of the State Money Management Council applicable to
             161      gift funds;
             162          [(f)] (e) enter into agreements with account owners, any institution of higher
             163      education, any federal or state agency, or other entity as required to implement this chapter;
             164          [(g)] (f) solicit and accept any grants, gifts, legislative appropriations, and other
             165      moneys from the state, any unit of federal, state, or local government, or any other person,
             166      firm, partnership, or corporation for deposit to the administrative fund, endowment fund, or
             167      the program fund;
             168          [(h) enter into account agreements with account owners;]
             169          [(i) make payments to institutions of higher education pursuant to account agreements


             170      on behalf of beneficiaries;]
             171          [(j) make refunds to account owners upon the termination of account agreements
             172      pursuant to the provisions of this chapter;]
             173          [(k) appoint a program administrator and determine the duties of the program
             174      administrator and other staff as necessary and fix their compensation;]
             175          [(l)] (g) make provision for the payment of costs of administration and operation of
             176      the [Utah Educational Savings Plan Trust; and] plan;
             177          [(m) carry out the duties and obligations of the Utah Educational Savings Plan Trust
             178      pursuant to this chapter.]
             179          (h) carry out studies and projections in order to advise account owners regarding
             180      present and estimated future higher education costs and levels of financial participation in the
             181      plan required in order to enable account owners to achieve their educational funding objective;
             182          (i) participate in federal, state, local governmental, or private programs;
             183          (j) create public and private partnerships, including investment or management
             184      relationships with other 529 plans or entities;
             185          (k) promulgate, impose, and collect administrative fees and charges in connection with
             186      transactions of the plan, and provide for reasonable service charges;
             187          (l) procure insurance:
             188          (i) against any loss in connection with the property, assets, or activities of the plan;
             189      and
             190          (ii) indemnifying any member of the board from personal loss or accountability arising
             191      from liability resulting from a member's action or inaction as a member of the plan's board;
             192          (m) administer outreach efforts to:
             193          (i) market and publicize the plan and its products to existing and prospective account
             194      owners; and
             195          (ii) encourage economically challenged populations to save for post-secondary
             196      education;
             197          (n) adopt, trademark, and copyright names and materials for use in marketing and


             198      publicizing the plan and its products;
             199          (o) administer the funds of the plan;
             200          (p) sue and be sued in its own name; and
             201          (q) have and exercise any other powers or duties that are necessary or appropriate to
             202      carry out and effectuate the purposes of this chapter.
             203          Section 5. Section 53B-8a-104 is amended to read:
             204           53B-8a-104. Office facilities, clerical, and administrative support for the Utah
             205      Educational Savings Plan.
             206          (1) The board shall provide to the [Utah Educational Savings Plan Trust] plan, by
             207      agreement, administrative and clerical support and office facilities and space.
             208          (2) Reasonable charges or fees may be levied against the [Utah Educational Savings
             209      Plan Trust] plan pursuant to the agreement for the services provided by the board.
             210          Section 6. Section 53B-8a-105 is amended to read:
             211           53B-8a-105. Powers and duties of board.
             212          (1) The board has all powers necessary to carry out and effectuate the purposes,
             213      objectives, and provisions of this chapter pertaining to the [Utah Educational Savings Plan
             214      Trust, including the power to:] plan.
             215          (2) The duties, responsibilities, funds, liabilities, and expenses of the board in
             216      oversight and governance of the plan shall be maintained separate and apart from the board's
             217      other duties, responsibilities, funds, liabilities, and expenses.
             218          (3) The board shall make policies governing the:
             219          (a) administration of the plan; and
             220          (b) appointment and duties of the plan's executive director.
             221          [(1) engage:]
             222          [(a) one or more investment advisors, registered under the Investment Advisers Act of
             223      1940, with at least 5,000 advisory clients and at least $1,000,000,000 under management, to
             224      provide investment advice to the board with respect to the assets held in each account;]
             225          [(b) an administrator to perform recordkeeping functions on behalf of the Utah


             226      Educational Savings Plan Trust; and]
             227          [(c) a custodian for the safekeeping of the assets of the Utah Educational Savings Plan
             228      Trust;]
             229          [(2) carry out studies and projections in order to advise account owners regarding
             230      present and estimated future higher education costs and levels of financial participation in the
             231      Utah Educational Savings Plan Trust required in order to enable account owners to achieve
             232      their educational funding objective;]
             233          [(3) contract for goods and services and engage personnel as necessary, including
             234      consultants, actuaries, managers, counsel, and auditors for the purpose of rendering
             235      professional, managerial, and technical assistance and advice, all of which contract obligations
             236      and services shall be payable from any moneys of the Utah Educational Savings Plan Trust;]
             237          [(4) participate in any other way in any federal, state, or local governmental program
             238      for the benefit of the Utah Educational Savings Plan Trust;]
             239          [(5) promulgate, impose, and collect administrative fees and charges in connection
             240      with transactions of the Utah Educational Savings Plan Trust, and provide for reasonable
             241      service charges, including penalties for cancellations and late payments;]
             242          [(6) procure insurance against any loss in connection with the property, assets, or
             243      activities of the Utah Educational Savings Plan Trust;]
             244          [(7) administer the funds of the Utah Educational Savings Plan Trust;]
             245          [(8) solicit and accept for the benefit of the endowment fund gifts, grants, and other
             246      moneys, including general fund moneys from the state and grants from any federal or other
             247      governmental agency;]
             248          [(9) procure insurance indemnifying any member of the board from personal loss or
             249      accountability arising from liability resulting from a member's action or inaction as a member
             250      of the board; and]
             251          [(10) make rules and regulations for the administration of the Utah Educational
             252      Savings Plan Trust.]
             253          Section 7. Section 53B-8a-106 is amended to read:


             254           53B-8a-106. Account agreements.
             255          The [Utah Educational Savings Plan Trust] plan may enter into account agreements
             256      with account owners on behalf of beneficiaries under the following terms and agreements:
             257          (1) (a) An account agreement may require an account owner to agree to invest a
             258      specific amount of money in the [Utah Educational Savings Plan Trust] plan for a specific
             259      period of time for the benefit of a specific beneficiary, not to exceed an amount determined by
             260      the [program administrator] executive director.
             261          (b) Account agreements may be amended to provide for adjusted levels of payments
             262      based upon changed circumstances or changes in educational plans.
             263          (c) An account owner may make additional optional payments as long as the total
             264      payments for a specific beneficiary do not exceed the total estimated higher education costs as
             265      determined by the [program administrator] executive director.
             266          (d) Subject to [Subsection] Subsections (1)(f) and (g), the maximum amount of a
             267      qualified investment that a corporation that is an account owner may subtract from unadjusted
             268      income for a taxable year in accordance with Title 59, Chapter 7, Corporate Franchise and
             269      Income Taxes, is [$1,650] $1,710 for each individual beneficiary for the taxable year
             270      beginning on or after January 1, [2008] 2010, but beginning on or before December 31,
             271      [2008] 2010.
             272          (e) Subject to [Subsection] Subsections (1)(f) and (g), the maximum amount of a
             273      qualified investment that may be used as the basis for claiming a tax credit in accordance with
             274      Section 59-10-1017 , is:
             275          (i) for a resident or nonresident estate or trust that is an account owner, [$1,650]
             276      $1,710 for each individual beneficiary for the taxable year beginning on or after January 1,
             277      [2008] 2010, but beginning on or before December 31, [2008] 2010;
             278          (ii) for a resident or nonresident individual that is an account owner, other than a
             279      husband and wife who are account owners and file a single return jointly under Title 59,
             280      Chapter 10, Individual Income Tax Act, [$1,650] $1,710 for each individual beneficiary for
             281      the taxable year beginning on or after January 1, [2008] 2010, but beginning on or before


             282      December 31, [2008] 2010; or
             283          (iii) for a husband and wife who are account owners and file a single return jointly
             284      under Title 59, Chapter 10, Individual Income Tax Act, [$3,300] $3,420 for each individual
             285      beneficiary:
             286          (A) for the taxable year beginning on or after January 1, [2008] 2010, but beginning
             287      on or before December 31, [2008] 2010; and
             288          (B) regardless of whether the [Utah Educational Savings Plan Trust] plan has entered
             289      into:
             290          (I) a separate account agreement with each spouse; or
             291          (II) a single account agreement with both spouses jointly.
             292          (f) (i) For taxable years beginning on or after January 1, [2009] 2011, the [program
             293      administrator] executive director shall annually increase [or decrease] the maximum amount of
             294      a qualified investment described in Subsections (1)(d) and (1)(e)(i) and (ii), by a percentage
             295      equal to the [percentage difference between] increase in the consumer price index for the
             296      preceding calendar year [and the consumer price index for the calendar year 2007].
             297          (ii) After making an increase [or decrease] required by Subsection (1)(f)(i), the
             298      [program administrator] executive director shall:
             299          (A) round the maximum amount of the qualified investments described in Subsections
             300      (1)(d) and (1)(e)(i) and (ii) increased [or decreased] under Subsection (1)(f)(i) to the nearest
             301      10 dollar increment; and
             302          (B) increase [or decrease] the maximum amount of the qualified investment described
             303      in Subsection (1)(e)(iii) so that the maximum amount of the qualified investment described in
             304      Subsection (1)(e)(iii) is equal to the product of:
             305          (I) the maximum amount of the qualified investment described in Subsection (1)(e)(ii)
             306      as rounded under Subsection (1)(f)(ii)(A); and
             307          (II) two.
             308          (iii) For purposes of Subsections (1)(f)(i) and (ii), the [program administrator]
             309      executive director shall calculate the consumer price index as provided in Sections 1(f)(4) and


             310      1(f)(5), Internal Revenue Code.
             311          (g) For taxable years beginning on or after January 1, 2011, the executive director
             312      shall keep the previous year's maximum amount of a qualified investment described in
             313      Subsections (1)(d) and (1)(e)(i) and (ii) if the consumer price index for the preceding calendar
             314      year decreases.
             315          (2) (a) Beneficiaries designated in account agreements must be designated after birth
             316      and before age 19 for an account owner to:
             317          (i) subtract a qualified investment from income under Title 59, Chapter 7, Corporate
             318      Franchise and Income Taxes; or
             319          (ii) use a qualified investment as the basis for claiming a tax credit in accordance with
             320      Section 59-10-1017 .
             321          (b) Account owners may designate a beneficiary age 19 or older, but investments for
             322      that beneficiary are not eligible to be:
             323          (i) subtracted from income under Title 59, Chapter 7, Corporate Franchise and Income
             324      Taxes; or
             325          (ii) used as the basis for claiming a tax credit in accordance with Section 59-10-1017 .
             326          (3) Each account agreement shall state clearly that there are no guarantees regarding
             327      moneys in the [Utah Educational Savings Plan Trust] plan as to the return of principal and that
             328      losses could occur.
             329          (4) Each account agreement shall provide that:
             330          (a) a contributor to, or designated beneficiary under, an account agreement may not
             331      direct the investment of any contributions or earnings on contributions;
             332          (b) any part of the money in any account may not be used as security for a loan; and
             333          (c) an account owner may not borrow from the [Utah Educational Savings Plan Trust]
             334      plan.
             335          (5) The execution of an account agreement by the [trust] plan may not guarantee in
             336      any way that higher education costs will be equal to projections and estimates provided by the
             337      [Utah Educational Savings Plan Trust] plan or that the beneficiary named in any account


             338      agreement will:
             339          (a) be admitted to an institution of higher education;
             340          (b) if admitted, be determined a resident for tuition purposes by the institution of
             341      higher education;
             342          (c) be allowed to continue attendance at the institution of higher education following
             343      admission; or
             344          (d) graduate from the institution of higher education.
             345          (6) A beneficiary may be changed as permitted by the rules and regulations of the
             346      board upon written request of the account owner prior to the date of admission of any
             347      beneficiary under an account agreement by an institution of higher education so long as the
             348      substitute beneficiary is eligible for participation.
             349          (7) An account agreement may be freely amended throughout the term of the account
             350      agreement in order to enable an account owner to increase or decrease the level of
             351      participation, change the designation of beneficiaries, and carry out similar matters as
             352      authorized by rule.
             353          (8) Each account agreement shall provide that:
             354          (a) the account agreement may be canceled upon the terms and conditions, and upon
             355      payment of the fees and costs set forth and contained in the board's rules and regulations; and
             356          (b) the [program administrator] executive director may amend the agreement
             357      unilaterally and retroactively, if necessary, to maintain the [Utah Educational Savings Plan
             358      Trust] plan as a qualified tuition program under Section 529, Internal Revenue Code.
             359          Section 8. Section 53B-8a-107 is amended to read:
             360           53B-8a-107. Program, administrative, and endowment funds -- Investment and
             361      payments from funds.
             362          (1) The [board] plan shall segregate moneys received by the [Utah Educational
             363      Savings Plan Trust] plan into three funds, the program fund, the administrative fund, and the
             364      endowment fund.
             365          (2) Transfers may be made from the program fund to the administrative fund to pay


             366      operating costs:
             367          (a) associated with administering the [Utah Educational Savings Plan Trust] plan and
             368      as required under Sections 53B-8a-103 through 53B-8a-105 ; and
             369          (b) as included in the budget approved by the board [of directors of the Utah
             370      Educational Savings Plan Trust].
             371          (3) (a) All moneys paid by account owners in connection with account agreements
             372      shall be deposited as received into separate accounts within the program fund which shall be
             373      [promptly] invested and accounted for separately.
             374          (b) Moneys accrued by account owners in the program fund [of the Utah Educational
             375      Savings Plan Trust] may be used for:
             376          (i) payments to any institution of higher education;
             377          (ii) payments to the account owner or beneficiary;
             378          (iii) payments to another 529 plan; or
             379          (iv) other expenditures or transfers made in accordance with the account agreement.
             380          (4) (a) All moneys received by the [Utah Educational Savings Plan Trust] plan from
             381      the proceeds of gifts and other endowments for the purposes of the [Utah Educational Savings
             382      Plan Trust] plan shall be:
             383          (i) deposited, according to the nature of the donation, as received into the endowment
             384      fund[, which shall be promptly] or the administrative fund; and
             385          (ii) invested and accounted for separately.
             386          (b) Any gifts, grants, or donations made by any governmental unit or any person, firm,
             387      partnership, or corporation to the [Utah Educational Savings Plan Trust] plan for deposit to the
             388      endowment fund is a grant, gift, or donation to the state for the accomplishment of a valid
             389      public eleemosynary, charitable, and educational purpose and is not included in the income of
             390      the donor for Utah tax purposes.
             391          (c) The endowment fund or the administrative fund may be used to enhance the
             392      savings of low income account owners investing in the [Utah Educational Savings Plan Trust]
             393      plan, for scholarships, or for other college savings incentive programs as approved by the


             394      board.
             395          (d) Transfers may be made from the endowment fund to the administrative fund upon
             396      approval by the board.
             397          (e) Endowment fund earnings not accruing to a beneficiary under an account
             398      agreement or not transferred to the administrative fund shall be reinvested in the endowment
             399      fund.
             400          Section 9. Section 53B-8a-108 is amended to read:
             401           53B-8a-108. Cancellation of agreements.
             402          (1) Any account owner may cancel an account agreement at will.
             403          (2) If an account agreement is cancelled by the account owner, the current account
             404      balance shall be disbursed to the account owner less:
             405          (a) an administrative refund fee, which may be charged by the [Utah Educational
             406      Savings Plan Trust] plan, except as provided in Subsection (3); and
             407          (b) any penalty or tax required to be withheld by the Internal Revenue Code.
             408          (3) An administration refund fee may not be levied by the [Utah Educational Savings
             409      Plan Trust] plan if the account agreement is cancelled due to:
             410          (a) the death of the beneficiary; or
             411          (b) the permanent disability or mental incapacity of the beneficiary.
             412          Section 10. Section 53B-8a-109 is amended to read:
             413           53B-8a-109. Repayment and ownership of funds in the account -- Transfer of
             414      ownership rights.
             415          (1) (a) The account owner retains ownership of funds in the account until:
             416          (i) funds are used to pay higher education costs for the beneficiary;
             417          (ii) funds are otherwise disbursed;
             418          (iii) funds are transferred for administrative costs; or
             419          (iv) the account is closed.
             420          (b) Funds in the account shall be considered to be held in trust for the benefit of the
             421      beneficiary.


             422          (2) Any amounts that may be paid pursuant to the [Utah Educational Savings Plan
             423      Trust] plan that are not listed in this section are owned by the [Utah Educational Savings Plan
             424      Trust] plan.
             425          (3) (a) An account owner may transfer ownership rights to another eligible person.
             426          (b) The transfer shall be affected and the property distributed in accordance with
             427      administrative regulations promulgated by the board or the terms of the account agreement.
             428          Section 11. Section 53B-8a-110 is amended to read:
             429           53B-8a-110. Effect of payments on determination of need and eligibility for
             430      student aid.
             431          No student loan program, student grant program, or other program administered by any
             432      agency of the state, except as may be otherwise provided by federal law or the provisions of
             433      any specific grant applicable to that law, shall take into account and consider amounts
             434      available for the payment of higher education costs pursuant to the [Utah Educational Savings
             435      Plan Trust] plan in determining need and eligibility for student aid.
             436          Section 12. Section 53B-8a-111 is amended to read:
             437           53B-8a-111. Annual audit of financial statements -- Information to governor and
             438      Legislature.
             439          (1) The financial statements of the [Utah Educational Savings Plan Trust] plan shall
             440      be audited annually by the state auditor or the state auditor's designee and reported in
             441      accordance with generally accepted accounting principles.
             442          (2) The [board] plan shall submit to the governor and the Legislature:
             443          (a) upon request, any studies or evaluations of the [Utah Educational Savings Plan
             444      Trust] plan;
             445          (b) upon request, a summary of the benefits provided by the [Utah Educational
             446      Savings Plan Trust] plan including the number of participants and beneficiaries in the [Utah
             447      Educational Savings Plan Trust] plan; and
             448          (c) upon request, any other information which is relevant in order to make a full, fair,
             449      and effective disclosure of the operations of the [Utah Educational Savings Plan Trust] plan.


             450          Section 13. Section 53B-8a-112 is amended to read:
             451           53B-8a-112. Tax considerations.
             452          (1) For tax purposes the property of the [Utah Educational Savings Plan Trust] plan
             453      and its income are governed by Section 59-10-201 .
             454          (2) The tax commission, in consultation with the board and the plan, may adopt rules
             455      necessary to monitor and implement the tax provisions referred to in Subsection (1) as related
             456      to the property of the [Utah Educational Savings Plan Trust] plan and its income.
             457          Section 14. Section 53B-8a-113 is amended to read:
             458           53B-8a-113. Property rights to plan assets.
             459          (1) The assets of the [Utah Educational Savings Plan Trust] plan, including the
             460      program fund and the endowment fund, shall at all times be preserved, invested, and expended
             461      solely and only for the purposes of the [Utah Educational Savings Plan Trust] plan and shall
             462      be held in trust for the account owners and beneficiaries.
             463          (2) No property rights in the [Utah Educational Savings Plan Trust] plan shall exist in
             464      favor of the state.
             465          (3) The assets may not be transferred or used by the state for any purposes other than
             466      the purposes of the [Utah Educational Savings Plan Trust] plan.
             467          Section 15. Section 59-1-403 is amended to read:
             468           59-1-403. Confidentiality -- Exceptions -- Penalty -- Application to property tax.
             469          (1) (a) Any of the following may not divulge or make known in any manner any
             470      information gained by that person from any return filed with the commission:
             471          (i) a tax commissioner;
             472          (ii) an agent, clerk, or other officer or employee of the commission; or
             473          (iii) a representative, agent, clerk, or other officer or employee of any county, city, or
             474      town.
             475          (b) An official charged with the custody of a return filed with the commission is not
             476      required to produce the return or evidence of anything contained in the return in any action or
             477      proceeding in any court, except:


             478          (i) in accordance with judicial order;
             479          (ii) on behalf of the commission in any action or proceeding under:
             480          (A) this title; or
             481          (B) other law under which persons are required to file returns with the commission;
             482          (iii) on behalf of the commission in any action or proceeding to which the commission
             483      is a party; or
             484          (iv) on behalf of any party to any action or proceeding under this title if the report or
             485      facts shown by the return are directly involved in the action or proceeding.
             486          (c) Notwithstanding Subsection (1)(b), a court may require the production of, and may
             487      admit in evidence, any portion of a return or of the facts shown by the return, as are
             488      specifically pertinent to the action or proceeding.
             489          (2) This section does not prohibit:
             490          (a) a person or that person's duly authorized representative from receiving a copy of
             491      any return or report filed in connection with that person's own tax;
             492          (b) the publication of statistics as long as the statistics are classified to prevent the
             493      identification of particular reports or returns; and
             494          (c) the inspection by the attorney general or other legal representative of the state of
             495      the report or return of any taxpayer:
             496          (i) who brings action to set aside or review a tax based on the report or return;
             497          (ii) against whom an action or proceeding is contemplated or has been instituted under
             498      this title; or
             499          (iii) against whom the state has an unsatisfied money judgment.
             500          (3) (a) Notwithstanding Subsection (1) and for purposes of administration, the
             501      commission may by rule, made in accordance with Title 63G, Chapter 3, Utah Administrative
             502      Rulemaking Act, provide for a reciprocal exchange of information with:
             503          (i) the United States Internal Revenue Service; or
             504          (ii) the revenue service of any other state.
             505          (b) Notwithstanding Subsection (1) and for all taxes except individual income tax and


             506      corporate franchise tax, the commission may by rule, made in accordance with Title 63G,
             507      Chapter 3, Utah Administrative Rulemaking Act, share information gathered from returns and
             508      other written statements with the federal government, any other state, any of the political
             509      subdivisions of another state, or any political subdivision of this state, except as limited by
             510      Sections 59-12-209 and 59-12-210 , if the political subdivision, other state, or the federal
             511      government grant substantially similar privileges to this state.
             512          (c) Notwithstanding Subsection (1) and for all taxes except individual income tax and
             513      corporate franchise tax, the commission may by rule, in accordance with Title 63G, Chapter 3,
             514      Utah Administrative Rulemaking Act, provide for the issuance of information concerning the
             515      identity and other information of taxpayers who have failed to file tax returns or to pay any tax
             516      due.
             517          (d) Notwithstanding Subsection (1), the commission shall provide to the Solid and
             518      Hazardous Waste Control Board executive secretary, as defined in Section 19-6-102 , as
             519      requested by the executive secretary, any records, returns, or other information filed with the
             520      commission under Chapter 13, Motor and Special Fuel Tax Act, or Section 19-6-410.5
             521      regarding the environmental assurance program participation fee.
             522          (e) Notwithstanding Subsection (1), at the request of any person the commission shall
             523      provide that person sales and purchase volume data reported to the commission on a report,
             524      return, or other information filed with the commission under:
             525          (i) Chapter 13, Part 2, Motor Fuel; or
             526          (ii) Chapter 13, Part 4, Aviation Fuel.
             527          (f) Notwithstanding Subsection (1), upon request from a tobacco product
             528      manufacturer, as defined in Section 59-22-202 , the commission shall report to the
             529      manufacturer:
             530          (i) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the
             531      manufacturer and reported to the commission for the previous calendar year under Section
             532      59-14-407 ; and
             533          (ii) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the


             534      manufacturer for which a tax refund was granted during the previous calendar year under
             535      Section 59-14-401 and reported to the commission under Subsection 59-14-401 (1)(a)(v).
             536          (g) Notwithstanding Subsection (1), the commission shall notify manufacturers,
             537      distributors, wholesalers, and retail dealers of a tobacco product manufacturer that is
             538      prohibited from selling cigarettes to consumers within the state under Subsection
             539      59-14-210 (2).
             540          (h) Notwithstanding Subsection (1), the commission may:
             541          (i) provide to the Division of Consumer Protection within the Department of
             542      Commerce and the attorney general data:
             543          (A) reported to the commission under Section 59-14-212 ; or
             544          (B) related to a violation under Section 59-14-211 ; and
             545          (ii) upon request provide to any person data reported to the commission under
             546      Subsections 59-14-212 (1)(a) through (c) and Subsection 59-14-212 (1)(g).
             547          (i) Notwithstanding Subsection (1), the commission shall, at the request of a
             548      committee of the Legislature, Office of the Legislative Fiscal Analyst, or Governor's Office of
             549      Planning and Budget, provide to the committee or office the total amount of revenues
             550      collected by the commission under Chapter 24, Radioactive Waste Facility Tax Act, for the
             551      time period specified by the committee or office.
             552          (j) Notwithstanding Subsection (1), the commission shall make the directory required
             553      by Section 59-14-603 available for public inspection.
             554          (k) Notwithstanding Subsection (1), the commission may share information with
             555      federal, state, or local agencies as provided in Subsection 59-14-606 (3).
             556          (l) (i) Notwithstanding Subsection (1), the commission shall provide the Office of
             557      Recovery Services within the Department of Human Services any relevant information
             558      obtained from a return filed under Chapter 10, Individual Income Tax Act, regarding a
             559      taxpayer who has become obligated to the Office of Recovery Services.
             560          (ii) The information described in Subsection (3)(l)(i) may be provided by the Office of
             561      Recovery Services to any other state's child support collection agency involved in enforcing


             562      that support obligation.
             563          (m) (i) Notwithstanding Subsection (1), upon request from the state court
             564      administrator, the commission shall provide to the state court administrator, the name,
             565      address, telephone number, county of residence, and Social Security number on resident
             566      returns filed under Chapter 10, Individual Income Tax Act.
             567          (ii) The state court administrator may use the information described in Subsection
             568      (3)(m)(i) only as a source list for the master jury list described in Section 78B-1-106 .
             569          (n) Notwithstanding Subsection (1), the commission shall at the request of a
             570      committee, commission, or task force of the Legislature provide to the committee,
             571      commission, or task force of the Legislature any information relating to a tax imposed under
             572      Chapter 9, Taxation of Admitted Insurers, relating to the study required by Section 59-9-101 .
             573          (o) (i) As used in this Subsection (3)(o), "office" means the:
             574          (A) Office of the Legislative Fiscal Analyst; or
             575          (B) Office of Legislative Research and General Counsel.
             576          (ii) Notwithstanding Subsection (1) and except as provided in Subsection (3)(o)(iii),
             577      the commission shall at the request of an office provide to the office all information:
             578          (A) gained by the commission; and
             579          (B) required to be attached to or included in returns filed with the commission.
             580          (iii) (A) An office may not request and the commission may not provide to an office a
             581      person's:
             582          (I) address;
             583          (II) name;
             584          (III) Social Security number; or
             585          (IV) taxpayer identification number.
             586          (B) The commission shall in all instances protect the privacy of a person as required
             587      by Subsection (3)(o)(iii)(A).
             588          (iv) An office may provide information received from the commission in accordance
             589      with this Subsection (3)(o) only:


             590          (A) as:
             591          (I) a fiscal estimate;
             592          (II) fiscal note information; or
             593          (III) statistical information; and
             594          (B) if the information is classified to prevent the identification of a particular return.
             595          (v) (A) A person may not request information from an office under Title 63G, Chapter
             596      2, Government Records Access and Management Act, or this section, if that office received
             597      the information from the commission in accordance with this Subsection (3)(o).
             598          (B) An office may not provide to a person that requests information in accordance
             599      with Subsection (3)(o)(v)(A) any information other than the information the office provides in
             600      accordance with Subsection (3)(o)(iv).
             601          (p) Notwithstanding Subsection (1), the commission may provide to the governing
             602      board of the agreement or a taxing official of another state, the District of Columbia, the
             603      United States, or a territory of the United States:
             604          (i) the following relating to an agreement sales and use tax:
             605          (A) information contained in a return filed with the commission;
             606          (B) information contained in a report filed with the commission;
             607          (C) a schedule related to Subsection (3)(p)(i)(A) or (B); or
             608          (D) a document filed with the commission; or
             609          (ii) a report of an audit or investigation made with respect to an agreement sales and
             610      use tax.
             611          (q) Notwithstanding Subsection (1), the commission may provide information
             612      concerning a taxpayer's state income tax return or state income tax withholding information to
             613      the Driver License Division if the Driver License Division:
             614          (i) requests the information; and
             615          (ii) provides the commission with a signed release form from the taxpayer allowing the
             616      Driver License Division access to the information.
             617          (r) Notwithstanding Subsection (1), the commission shall provide to the Utah State


             618      911 Committee the information requested by the Utah State 911 Committee under Subsection
             619      53-10-602 (3).
             620          (s) Notwithstanding Subsection (1), the commission may provide to the Utah
             621      Educational Savings Plan [Trust] information related to a resident or nonresident individual's
             622      contribution to a Utah Educational Savings Plan account as designated on the resident or
             623      nonresident's individual income tax return under Section 59-10-1313 .
             624          (4) (a) Reports and returns shall be preserved for at least three years.
             625          (b) After the three-year period provided in Subsection (4)(a) the commission may
             626      destroy a report or return.
             627          (5) (a) Any person who violates this section is guilty of a class A misdemeanor.
             628          (b) If the person described in Subsection (5)(a) is an officer or employee of the state,
             629      the person shall be dismissed from office and be disqualified from holding public office in this
             630      state for a period of five years thereafter.
             631          (c) Notwithstanding Subsection (5)(a) or (b), an office that requests information in
             632      accordance with Subsection (3)(o)(iii) or a person that requests information in accordance
             633      with Subsection (3)(o)(v):
             634          (i) is not guilty of a class A misdemeanor; and
             635          (ii) is not subject to:
             636          (A) dismissal from office in accordance with Subsection (5)(b); or
             637          (B) disqualification from holding public office in accordance with Subsection (5)(b).
             638          (6) Except as provided in Section 59-1-404 , this part does not apply to the property
             639      tax.
             640          Section 16. Section 59-7-105 is amended to read:
             641           59-7-105. Additions to unadjusted income.
             642          In computing adjusted income the following amounts shall be added to unadjusted
             643      income:
             644          (1) interest from bonds, notes, and other evidences of indebtedness issued by any state
             645      of the United States, including any agency and instrumentality of a state of the United States;


             646          (2) the amount of any deduction taken on a corporation's federal return for taxes paid
             647      by a corporation:
             648          (a) to Utah for taxes imposed by this chapter; and
             649          (b) to another state of the United States, a foreign country, a United States possession,
             650      or the Commonwealth of Puerto Rico for taxes imposed for the privilege of doing business, or
             651      exercising its corporate franchise, including income, franchise, corporate stock and business
             652      and occupation taxes;
             653          (3) the safe harbor lease adjustment required under Subsections 59-7-111 (1)(a) and
             654      (2)(a);
             655          (4) capital losses that have been deducted on a Utah corporate return in previous
             656      years;
             657          (5) any deduction on the federal return that has been previously deducted on the Utah
             658      return;
             659          (6) the amount of contributions claimed as a tax credit pursuant to Section 59-7-602 ;
             660          (7) the amount of the deduction taken pursuant to Section 59-7-603 for sophisticated
             661      technological equipment;
             662          (8) charitable contributions, to the extent deducted on the federal return when
             663      determining federal taxable income;
             664          (9) the amount of gain or loss determined under Section 59-7-114 relating to a target
             665      corporation under Section 338, Internal Revenue Code, unless such gain or loss has already
             666      been included in the unadjusted income of the target corporation;
             667          (10) the amount of gain or loss determined under Section 59-7-115 relating to
             668      corporations treated for federal purposes as having disposed of its assets under Section 336(e),
             669      Internal Revenue Code, unless such gain or loss has already been included in the unadjusted
             670      income of the target corporation;
             671          (11) adjustments to gains, losses, depreciation expense, amortization expense, and
             672      similar items due to a difference between basis for federal purposes and basis as computed
             673      under Section 59-7-107 ;


             674          (12) the amount withdrawn under Title 53B, Chapter 8a, [Higher Education Savings
             675      Incentive Program] Utah Educational Savings Plan, from the account of a corporation that is
             676      an account owner as defined in Section 53B-8a-102 , for the taxable year for which the amount
             677      is withdrawn, if that amount withdrawn from the account of the corporation that is the account
             678      owner:
             679          (a) is not expended for:
             680          (i) higher education costs as defined in Section 53B-8a-102 ; [and] or
             681          (ii) a payment or distribution that qualifies as an exception to the additional tax for
             682      distributions not used for educational expenses provided in Sections 529(c) and 530(d),
             683      Internal Revenue Code; and
             684          (b) is subtracted by the corporation:
             685          (i) that is the account owner; and
             686          (ii) in accordance with Subsection 59-7-106 (18); and
             687          (13) the amount of the deduction for dividends paid, as defined in Section 561,
             688      Internal Revenue Code, that is allowed under Section 857(b)(2)(B), Internal Revenue Code, in
             689      computing the taxable income of a captive real estate investment trust, if that captive real
             690      estate investment trust is subject to federal income taxation.
             691          Section 17. Section 59-7-106 is amended to read:
             692           59-7-106. Subtractions from unadjusted income.
             693          In computing adjusted income the following amounts shall be subtracted from
             694      unadjusted income:
             695          (1) the foreign dividend gross-up included in gross income for federal income tax
             696      purposes under Section 78, Internal Revenue Code;
             697          (2) the net capital loss, as defined for federal purposes, if the taxpayer elects to deduct
             698      the loss on the current Utah return. The deduction shall be made by claiming the deduction on
             699      the current Utah return which shall be filed by the due date of the return, including extensions.
             700      For the purposes of this Subsection (2) all capital losses in a given year must be:
             701          (a) deducted in the year incurred; or


             702          (b) carried forward as provided in Sections 1212(a)(1)(B) and (C), Internal Revenue
             703      Code;
             704          (3) the decrease in salary expense deduction for federal income tax purposes due to
             705      claiming the federal jobs credit under Section 51, Internal Revenue Code;
             706          (4) the decrease in qualified research and basic research expense deduction for federal
             707      income tax purposes due to claiming the federal research and development credit under
             708      Section 41, Internal Revenue Code;
             709          (5) the decrease in qualified clinical testing expense deduction for federal income tax
             710      purposes due to claiming the federal orphan drug credit under Section 28, Internal Revenue
             711      Code;
             712          (6) any decrease in any expense deduction for federal income tax purposes due to
             713      claiming any other federal credit;
             714          (7) the safe harbor lease adjustment required under Subsections 59-7-111 (1)(b) and
             715      (2)(b);
             716          (8) any income on the federal corporate return that has been previously taxed by Utah;
             717          (9) amounts included in federal taxable income that are due to refunds of taxes
             718      imposed for the privilege of doing business, or exercising a corporate franchise, including
             719      income, franchise, corporate stock and business and occupation taxes paid by the corporation
             720      to Utah, another state of the United States, a foreign country, a United States possession, or
             721      the Commonwealth of Puerto Rico to the extent that the taxes were added to unadjusted
             722      income under Section 59-7-105 ;
             723          (10) charitable contributions, to the extent allowed as a subtraction under Section
             724      59-7-109 ;
             725          (11) (a) 50% of the dividends deemed received or received from subsidiaries which
             726      are members of the unitary group and are organized or incorporated outside of the United
             727      States unless such subsidiaries are included in a combined report under Section 59-7-402 or
             728      59-7-403 . In arriving at the amount of the dividend exclusion, the taxpayer shall first deduct
             729      from the dividends deemed received or received, the expense directly attributable to those


             730      dividends. Interest expense attributable to excluded dividends shall be determined by
             731      multiplying interest expense by a fraction, the numerator of which is the taxpayer's average
             732      investment in such dividend paying subsidiaries, and the denominator of which is the
             733      taxpayer's average total investment in assets;
             734          (b) in determining income apportionable to this state, a portion of the factors of a
             735      foreign subsidiary whose dividends are partially excluded under Subsection (11)(a) shall be
             736      included in the combined report factors. The portion to be included shall be determined by
             737      multiplying each factor of the foreign subsidiary by a fraction, but not to exceed 100%, the
             738      numerator of which is the amount of the dividend paid by the foreign subsidiary which is
             739      included in adjusted income, and the denominator of which is the current year earnings and
             740      profits of the foreign subsidiary as determined under the Internal Revenue Code;
             741          (12) (a) 50% of the adjusted income of a foreign operating company unless the
             742      taxpayer has elected to file a worldwide combined report as provided in Section 59-7-403 . For
             743      purposes of this Subsection (12), when calculating the adjusted income of a foreign operating
             744      company, a foreign operating company may not deduct the subtractions allowable under this
             745      Subsection (12) and Subsection (11);
             746          (b) in determining income apportionable to this state, the factors for a foreign
             747      operating company shall be included in the combined report factors in the same percentage its
             748      adjusted income is included in the combined adjusted income;
             749          (13) the amount of gain or loss which is included in unadjusted income but not
             750      recognized for federal purposes on stock sold or exchanged by a member of a selling
             751      consolidated group as defined in Section 338, Internal Revenue Code, if an election has been
             752      made pursuant to Section 338(h)(10), Internal Revenue Code;
             753          (14) the amount of gain or loss which is included in unadjusted income but not
             754      recognized for federal purposes on stock sold, exchanged, or distributed by a corporation
             755      pursuant to Section 336(e), Internal Revenue Code, if an election under Section 336(e),
             756      Internal Revenue Code, has been made for federal purposes;
             757          (15) (a) adjustments to gains, losses, depreciation expense, amortization expense, and


             758      similar items due to a difference between basis for federal purposes and basis as computed
             759      under Section 59-7-107 ; and
             760          (b) if there has been a reduction in federal basis for a federal tax credit where there is
             761      no corresponding Utah tax credit, the amount of the reduction in basis shall be allowed as an
             762      expense in the year of the federal credit;
             763          (16) any interest expense not deducted on the federal corporate return under Section
             764      265(b) or 291(e), Internal Revenue Code;
             765          (17) 100% of the dividends received from subsidiaries which are insurance companies
             766      exempt from this chapter under Subsection 59-7-102 (1)(c) and are under common ownership;
             767          (18) subject to Subsection 59-7-105 (12), the amount of a qualified investment as
             768      defined in Section 53B-8a-102 that:
             769          (a) a corporation that is an account owner as defined in Section 53B-8a-102 makes
             770      during the taxable year;
             771          (b) the corporation described in Subsection (18)(a) does not deduct on a federal
             772      corporation income tax return; and
             773          (c) does not exceed the maximum amount of the qualified investment that may be
             774      subtracted from unadjusted income for a taxable year in accordance with [Subsections]
             775      Subsection 53B-8a-106 (1)[(d) and (f)]; and
             776          (19) for purposes of income included in a combined report under Part 4, Combined
             777      Reporting, the entire amount of the dividends a member of a unitary group receives or is
             778      considered to receive from a captive real estate investment trust.
             779          Section 18. Section 59-10-114 is amended to read:
             780           59-10-114. Additions to and subtractions from adjusted gross income of an
             781      individual.
             782          (1) There shall be added to adjusted gross income of a resident or nonresident
             783      individual:
             784          (a) a lump sum distribution that the taxpayer does not include in adjusted gross
             785      income on the taxpayer's federal individual income tax return for the taxable year;


             786          (b) the amount of a child's income calculated under Subsection (4) that:
             787          (i) a parent elects to report on the parent's federal individual income tax return for the
             788      taxable year; and
             789          (ii) the parent does not include in adjusted gross income on the parent's federal
             790      individual income tax return for the taxable year;
             791          (c) (i) a withdrawal from a medical care savings account and any penalty imposed for
             792      the taxable year if:
             793          (A) the resident or nonresident individual does not deduct the amounts on the resident
             794      or nonresident individual's federal individual income tax return under Section 220, Internal
             795      Revenue Code;
             796          (B) the withdrawal is subject to Subsections 31A-32a-105 (1) and (2); and
             797          (C) the withdrawal is:
             798          (I) subtracted on a return the resident or nonresident individual files under this chapter
             799      for a taxable year beginning on or before December 31, 2007; or
             800          (II) used as the basis for a resident or nonresident individual to claim a tax credit
             801      under Section 59-10-1021 ;
             802          (ii) a disbursement required to be added to adjusted gross income in accordance with
             803      Subsection 31A-32a-105 (3); or
             804          (iii) an amount required to be added to adjusted gross income in accordance with
             805      Subsection 31A-32a-105 (5)(c);
             806          (d) the amount withdrawn under Title 53B, Chapter 8a, [Higher Education Savings
             807      Incentive Program] Utah Educational Savings Plan, from the account of a resident or
             808      nonresident individual who is an account owner as defined in Section 53B-8a-102 , for the
             809      taxable year for which the amount is withdrawn, if that amount withdrawn from the account of
             810      the resident or nonresident individual who is the account owner:
             811          (i) is not expended for:
             812          (A) higher education costs as defined in Section 53B-8a-102 ; [and] or
             813          (B) a payment or distribution that qualifies as an exception to the additional tax for


             814      distributions not used for educational expenses provided in Sections 529(c) and 530(d),
             815      Internal Revenue Code; and
             816          (ii) is:
             817          (A) subtracted by the resident or nonresident individual:
             818          (I) who is the account owner; and
             819          (II) on the resident or nonresident individual's return filed under this chapter for a
             820      taxable year beginning on or before December 31, 2007; or
             821          (B) used as the basis for the resident or nonresident individual who is the account
             822      owner to claim a tax credit under Section 59-10-1017 ;
             823          (e) except as provided in Subsection [(6)] (5), for bonds, notes, and other evidences of
             824      indebtedness acquired on or after January 1, 2003, the interest from bonds, notes, and other
             825      evidences of indebtedness issued by one or more of the following entities:
             826          (i) a state other than this state;
             827          (ii) the District of Columbia;
             828          (iii) a political subdivision of a state other than this state; or
             829          (iv) an agency or instrumentality of an entity described in Subsections (1)(e)(i)
             830      through (iii);
             831          (f) subject to Subsection (2)(c), any distribution received by a resident beneficiary of a
             832      resident trust of income that was taxed at the trust level for federal tax purposes, but was
             833      subtracted from state taxable income of the trust pursuant to Subsection 59-10-202 (2)(b);
             834          (g) any distribution received by a resident beneficiary of a nonresident trust of
             835      undistributed distributable net income realized by the trust on or after January 1, 2004, if that
             836      undistributed distributable net income was taxed at the trust level for federal tax purposes, but
             837      was not taxed at the trust level by any state, with undistributed distributable net income
             838      considered to be distributed from the most recently accumulated undistributed distributable
             839      net income; and
             840          (h) any adoption expense:
             841          (i) for which a resident or nonresident individual receives reimbursement from another


             842      person; and
             843          (ii) to the extent to which the resident or nonresident individual subtracts that adoption
             844      expense:
             845          (A) on a return filed under this chapter for a taxable year beginning on or before
             846      December 31, 2007; or
             847          (B) from federal taxable income on a federal individual income tax return.
             848          (2) There shall be subtracted from adjusted gross income of a resident or nonresident
             849      individual:
             850          (a) the difference between:
             851          (i) the interest or a dividend on an obligation or security of the United States or an
             852      authority, commission, instrumentality, or possession of the United States, to the extent that
             853      interest or dividend is:
             854          (A) included in adjusted gross income for federal income tax purposes for the taxable
             855      year; and
             856          (B) exempt from state income taxes under the laws of the United States; and
             857          (ii) any interest on indebtedness incurred or continued to purchase or carry the
             858      obligation or security described in Subsection (2)(a)(i);
             859          (b) for taxable years beginning on or after January 1, 2000, if the conditions of
             860      Subsection (3)(a) are met, the amount of income derived by a Ute tribal member:
             861          (i) during a time period that the Ute tribal member resides on homesteaded land
             862      diminished from the Uintah and Ouray Reservation; and
             863          (ii) from a source within the Uintah and Ouray Reservation;
             864          (c) an amount received by a resident or nonresident individual or distribution received
             865      by a resident or nonresident beneficiary of a resident trust:
             866          (i) if that amount or distribution constitutes a refund of taxes imposed by:
             867          (A) a state; or
             868          (B) the District of Columbia; and
             869          (ii) to the extent that amount or distribution is included in adjusted gross income for


             870      that taxable year on the federal individual income tax return of the resident or nonresident
             871      individual or resident or nonresident beneficiary of a resident trust;
             872          (d) the amount of a railroad retirement benefit:
             873          (i) paid:
             874          (A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et
             875      seq.;
             876          (B) to a resident or nonresident individual; and
             877          (C) for the taxable year; and
             878          (ii) to the extent that railroad retirement benefit is included in adjusted gross income
             879      on that resident or nonresident individual's federal individual income tax return for that
             880      taxable year; and
             881          (e) an amount:
             882          (i) received by an enrolled member of an American Indian tribe; and
             883          (ii) to the extent that the state is not authorized or permitted to impose a tax under this
             884      part on that amount in accordance with:
             885          (A) federal law;
             886          (B) a treaty; or
             887          (C) a final decision issued by a court of competent jurisdiction.
             888          (3) (a) A subtraction for an amount described in Subsection (2)(b) is allowed only if:
             889          (i) the taxpayer is a Ute tribal member; and
             890          (ii) the governor and the Ute tribe execute and maintain an agreement meeting the
             891      requirements of this Subsection (3).
             892          (b) The agreement described in Subsection (3)(a):
             893          (i) may not:
             894          (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
             895          (B) provide a subtraction under this section greater than or different from the
             896      subtraction described in Subsection (2)(b); or
             897          (C) affect the power of the state to establish rates of taxation; and


             898          (ii) shall:
             899          (A) provide for the implementation of the subtraction described in Subsection (2)(b);
             900          (B) be in writing;
             901          (C) be signed by:
             902          (I) the governor; and
             903          (II) the chair of the Business Committee of the Ute tribe;
             904          (D) be conditioned on obtaining any approval required by federal law; and
             905          (E) state the effective date of the agreement.
             906          (c) (i) The governor shall report to the commission by no later than February 1 of each
             907      year regarding whether or not an agreement meeting the requirements of this Subsection (3) is
             908      in effect.
             909          (ii) If an agreement meeting the requirements of this Subsection (3) is terminated, the
             910      subtraction permitted under Subsection (2)(b) is not allowed for taxable years beginning on or
             911      after the January 1 following the termination of the agreement.
             912          (d) For purposes of Subsection (2)(b) and in accordance with Title 63G, Chapter 3,
             913      Utah Administrative Rulemaking Act, the commission may make rules:
             914          (i) for determining whether income is derived from a source within the Uintah and
             915      Ouray Reservation; and
             916          (ii) that are substantially similar to how adjusted gross income derived from Utah
             917      sources is determined under Section 59-10-117 .
             918          (4) (a) For purposes of this Subsection (4), "Form 8814" means:
             919          (i) the federal individual income tax Form 8814, Parents' Election To Report Child's
             920      Interest and Dividends; or
             921          (ii) (A) a form designated by the commission in accordance with Subsection
             922      (4)(a)(ii)(B) as being substantially similar to 2000 Form 8814 if for purposes of federal
             923      individual income taxes the information contained on 2000 Form 8814 is reported on a form
             924      other than Form 8814; and
             925          (B) for purposes of Subsection (4)(a)(ii)(A) and in accordance with Title 63G, Chapter


             926      3, Utah Administrative Rulemaking Act, the commission may make rules designating a form
             927      as being substantially similar to 2000 Form 8814 if for purposes of federal individual income
             928      taxes the information contained on 2000 Form 8814 is reported on a form other than Form
             929      8814.
             930          (b) The amount of a child's income added to adjusted gross income under Subsection
             931      (1)(b) is equal to the difference between:
             932          (i) the lesser of:
             933          (A) the base amount specified on Form 8814; and
             934          (B) the sum of the following reported on Form 8814:
             935          (I) the child's taxable interest;
             936          (II) the child's ordinary dividends; and
             937          (III) the child's capital gain distributions; and
             938          (ii) the amount not taxed that is specified on Form 8814.
             939          (5) Notwithstanding Subsection (1)(e), interest from bonds, notes, and other evidences
             940      of indebtedness issued by an entity described in Subsections (1)(e)(i) through (iv) may not be
             941      added to adjusted gross income of a resident or nonresident individual if, as annually
             942      determined by the commission:
             943          (a) for an entity described in Subsection (1)(e)(i) or (ii), the entity and all of the
             944      political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
             945      income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
             946          (b) for an entity described in Subsection (1)(e)(iii) or (iv), the following do not impose
             947      a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of
             948      this state:
             949          (i) the entity; or
             950          (ii) (A) the state in which the entity is located; or
             951          (B) the District of Columbia, if the entity is located within the District of Columbia.
             952          Section 19. Section 59-10-201 is amended to read:
             953           59-10-201. Taxation of resident trusts and estates.


             954          (1) Except as provided in Subsection (2), a tax determined in accordance with the rate
             955      prescribed by Subsection 59-10-104 (2)(b) is imposed for each taxable year on the state taxable
             956      income of each resident estate or trust.
             957          (2) The following are not subject to a tax imposed by this part:
             958          (a) a resident estate or trust that is not required to file a federal income tax return for
             959      estates and trusts for the taxable year; or
             960          (b) a resident trust taxed as a corporation.
             961          (3) A resident estate or trust shall be allowed the credit provided in Section
             962      59-10-1003 , relating to an income tax imposed by another state, except that the limitation
             963      shall be computed by reference to the taxable income of the estate or trust.
             964          (4) The property of the Utah Educational Savings Plan [trust] established in Title 53B,
             965      Chapter 8a, [Higher Education Savings Incentive Program] Utah Educational Savings Plan,
             966      and its income from operations and investments are exempt from all taxation by the state
             967      under this chapter.
             968          Section 20. Section 59-10-202 is amended to read:
             969           59-10-202. Additions to and subtractions from unadjusted income of a resident
             970      or nonresident estate or trust.
             971          (1) There shall be added to unadjusted income of a resident or nonresident estate or
             972      trust:
             973          (a) a lump sum distribution allowable as a deduction under Section 402(d)(3), Internal
             974      Revenue Code, to the extent deductible under Section 62(a)(8), Internal Revenue Code, in
             975      determining adjusted gross income;
             976          (b) except as provided in Subsection (3), for bonds, notes, and other evidences of
             977      indebtedness acquired on or after January 1, 2003, the interest from bonds, notes, and other
             978      evidences of indebtedness issued by one or more of the following entities:
             979          (i) a state other than this state;
             980          (ii) the District of Columbia;
             981          (iii) a political subdivision of a state other than this state; or


             982          (iv) an agency or instrumentality of an entity described in Subsections (1)(b)(i)
             983      through (iii);
             984          (c) any portion of federal taxable income for a taxable year if that federal taxable
             985      income is derived from stock:
             986          (i) in an S corporation; and
             987          (ii) that is held by an electing small business trust;
             988          (d) the amount withdrawn under Title 53B, Chapter 8a, [Higher Education Savings
             989      Incentive Program] Utah Educational Savings Plan, from the account of a resident or
             990      nonresident estate or trust that is an account owner as defined in Section 53B-8a-102 , for the
             991      taxable year for which the amount is withdrawn, if that amount withdrawn from the account of
             992      the resident or nonresident estate or trust that is the account owner:
             993          (i) is not expended for:
             994          (A) higher education costs as defined in Section 53B-8a-102 ; [and] or
             995          (B) a payment or distribution that qualifies as an exception to the additional tax for
             996      distributions not used for educational expenses provided in Sections 529(c) and 530(d),
             997      Internal Revenue Code; and
             998          (ii) is:
             999          (A) subtracted by the resident or nonresident estate or trust:
             1000          (I) that is the account owner; and
             1001          (II) on the resident or nonresident estate's or trust's return filed under this chapter for a
             1002      taxable year beginning on or before December 31, 2007; or
             1003          (B) used as the basis for the resident or nonresident estate or trust that is the account
             1004      owner to claim a tax credit under Section 59-10-1017 ; and
             1005          (e) any fiduciary adjustments required by Section 59-10-210 .
             1006          (2) There shall be subtracted from unadjusted income of a resident or nonresident
             1007      estate or trust:
             1008          (a) the interest or a dividend on obligations or securities of the United States and its
             1009      possessions or of any authority, commission, or instrumentality of the United States, to the


             1010      extent that interest or dividend is included in gross income for federal income tax purposes for
             1011      the taxable year but exempt from state income taxes under the laws of the United States, but
             1012      the amount subtracted under this Subsection (2) shall be reduced by any interest on
             1013      indebtedness incurred or continued to purchase or carry the obligations or securities described
             1014      in this Subsection (2), and by any expenses incurred in the production of interest or dividend
             1015      income described in this Subsection (2) to the extent that such expenses, including
             1016      amortizable bond premiums, are deductible in determining federal taxable income;
             1017          (b) income of an irrevocable resident trust if:
             1018          (i) the income would not be treated as state taxable income derived from Utah sources
             1019      under Section 59-10-204 if received by a nonresident trust;
             1020          (ii) the trust first became a resident trust on or after January 1, 2004;
             1021          (iii) no assets of the trust were held, at any time after January 1, 2003, in another
             1022      resident irrevocable trust created by the same settlor or the spouse of the same settlor;
             1023          (iv) the trustee of the trust is a trust company as defined in Subsection 7-5-1 (1)(d);
             1024          (v) the amount subtracted under this Subsection (2)(b) is reduced to the extent the
             1025      settlor or any other person is treated as an owner of any portion of the trust under Subtitle A,
             1026      Subchapter J, Subpart E of the Internal Revenue Code; and
             1027          (vi) the amount subtracted under this Subsection (2)(b) is reduced by any interest on
             1028      indebtedness incurred or continued to purchase or carry the assets generating the income
             1029      described in this Subsection (2)(b), and by any expenses incurred in the production of income
             1030      described in this Subsection (2)(b), to the extent that those expenses, including amortizable
             1031      bond premiums, are deductible in determining federal taxable income;
             1032          (c) if the conditions of Subsection (4)(a) are met, the amount of income of a resident
             1033      or nonresident estate or trust derived from a deceased Ute tribal member:
             1034          (i) during a time period that the Ute tribal member resided on homesteaded land
             1035      diminished from the Uintah and Ouray Reservation; and
             1036          (ii) from a source within the Uintah and Ouray Reservation;
             1037          (d) any amount:


             1038          (i) received by a resident or nonresident estate or trust;
             1039          (ii) that constitutes a refund of taxes imposed by:
             1040          (A) a state; or
             1041          (B) the District of Columbia; and
             1042          (iii) to the extent that amount is included in total income on that resident or
             1043      nonresident estate's or trust's federal tax return for estates and trusts for that taxable year;
             1044          (e) the amount of a railroad retirement benefit:
             1045          (i) paid:
             1046          (A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et
             1047      seq.;
             1048          (B) to a resident or nonresident estate or trust derived from a deceased resident or
             1049      nonresident individual; and
             1050          (C) for the taxable year; and
             1051          (ii) to the extent that railroad retirement benefit is included in total income on that
             1052      resident or nonresident estate's or trust's federal tax return for estates and trusts;
             1053          (f) an amount:
             1054          (i) received by a resident or nonresident estate or trust if that amount is derived from a
             1055      deceased enrolled member of an American Indian tribe; and
             1056          (ii) to the extent that the state is not authorized or permitted to impose a tax under this
             1057      part on that amount in accordance with:
             1058          (A) federal law;
             1059          (B) a treaty; or
             1060          (C) a final decision issued by a court of competent jurisdiction;
             1061          (g) the amount that a qualified nongrantor charitable lead trust deducts under Section
             1062      642(c), Internal Revenue Code, as a charitable contribution deduction, as allowed on the
             1063      qualified nongrantor charitable lead trust's federal income tax return for estates and trusts for
             1064      the taxable year; and
             1065          (h) any fiduciary adjustments required by Section 59-10-210 .


             1066          (3) Notwithstanding Subsection (1)(b), interest from bonds, notes, and other evidences
             1067      of indebtedness issued by an entity described in Subsections (1)(b)(i) through (iv) may not be
             1068      added to unadjusted income of a resident or nonresident estate or trust if, as annually
             1069      determined by the commission:
             1070          (a) for an entity described in Subsection (1)(b)(i) or (ii), the entity and all of the
             1071      political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
             1072      income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
             1073          (b) for an entity described in Subsection (1)(b)(iii) or (iv), the following do not impose
             1074      a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of
             1075      this state:
             1076          (i) the entity; or
             1077          (ii) (A) the state in which the entity is located; or
             1078          (B) the District of Columbia, if the entity is located within the District of Columbia.
             1079          (4) (a) A subtraction for an amount described in Subsection (2)(c) is allowed only if:
             1080          (i) the income is derived from a deceased Ute tribal member; and
             1081          (ii) the governor and the Ute tribe execute and maintain an agreement meeting the
             1082      requirements of this Subsection (4).
             1083          (b) The agreement described in Subsection (4)(a):
             1084          (i) may not:
             1085          (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
             1086          (B) provide a subtraction under this section greater than or different from the
             1087      subtraction described in Subsection (2)(c); or
             1088          (C) affect the power of the state to establish rates of taxation; and
             1089          (ii) shall:
             1090          (A) provide for the implementation of the subtraction described in Subsection (2)(c);
             1091          (B) be in writing;
             1092          (C) be signed by:
             1093          (I) the governor; and


             1094          (II) the chair of the Business Committee of the Ute tribe;
             1095          (D) be conditioned on obtaining any approval required by federal law; and
             1096          (E) state the effective date of the agreement.
             1097          (c) (i) The governor shall report to the commission by no later than February 1 of each
             1098      year regarding whether or not an agreement meeting the requirements of this Subsection (4) is
             1099      in effect.
             1100          (ii) If an agreement meeting the requirements of this Subsection (4) is terminated, the
             1101      subtraction permitted under Subsection (2)(c) is not allowed for taxable years beginning on or
             1102      after the January 1 following the termination of the agreement.
             1103          (d) For purposes of Subsection (2)(c) and in accordance with Title 63G, Chapter 3,
             1104      Utah Administrative Rulemaking Act, the commission may make rules:
             1105          (i) for determining whether income is derived from a source within the Uintah and
             1106      Ouray Reservation; and
             1107          (ii) that are substantially similar to how adjusted gross income derived from Utah
             1108      sources is determined under Section 59-10-117 .
             1109          Section 21. Section 59-10-1017 is amended to read:
             1110           59-10-1017. Utah Educational Savings Plan tax credit.
             1111          (1) As used in this section:
             1112          (a) "Account owner" is as defined in Section 53B-8a-102 .
             1113          (b) "Higher education costs" is as defined in Section 53B-8a-102 .
             1114          (c) "Maximum amount of a qualified investment for the taxable year" means, for a
             1115      taxable year:
             1116          (i) for a claimant, estate, or trust that is an account owner, if that claimant, estate, or
             1117      trust is other than husband and wife account owners who file a single return jointly, the
             1118      maximum amount of a qualified investment:
             1119          (A) listed in Subsection 53B-8a-106 (1)(e)(ii); and
             1120          (B) increased or [decreased] kept for that taxable year in accordance with [Subsection]
             1121      Subsections 53B-8a-106 (1)(f) and (g); or


             1122          (ii) for claimants who are husband and wife account owners who file a single return
             1123      jointly, the maximum amount of a qualified investment:
             1124          (A) listed in Subsection 53B-8a-106 (1)(e)(iii); and
             1125          (B) increased or [decreased] kept for that taxable year in accordance with [Subsection]
             1126      Subsections 53B-8a-106 (1)(f) and (g).
             1127          (d) "Qualified investment" is as defined in Section 53B-8a-102 .
             1128          (2) Except as provided in Section 59-10-1002.2 , a claimant, estate, or trust that is an
             1129      account owner may claim a nonrefundable tax credit equal to the product of:
             1130          (a) the lesser of:
             1131          (i) the amount of a qualified investment the claimant, estate, or trust:
             1132          (A) makes during the taxable year; and
             1133          (B) does not deduct:
             1134          (I) for a claimant, on the claimant's federal individual income tax return; or
             1135          (II) for an estate or trust, on the estate's or trust's federal income tax return for estates
             1136      and trusts; or
             1137          (ii) the maximum amount of a qualified investment for the taxable year if the amount
             1138      described in Subsection (2)(a)(i) is greater than the maximum amount of a qualified
             1139      investment for the taxable year; and
             1140          (b) 5%.
             1141          (3) A tax credit under this section may not be carried forward or carried back.
             1142          Section 22. Section 59-10-1313 is amended to read:
             1143           59-10-1313. Contribution to a Utah Educational Savings Plan account.
             1144          (1) (a) If a resident or nonresident individual is owed an individual income tax refund
             1145      for the taxable year, the individual may designate on the resident or nonresident individual's
             1146      income tax return a contribution to a Utah Educational Savings Plan account established under
             1147      Title 53B, Chapter 8a, [Higher Education Savings Incentive Program] Utah Educational
             1148      Savings Plan, in the amount of the entire individual income tax refund.
             1149          (b) If a resident or nonresident individual is not owed an individual income tax refund


             1150      for the taxable year, the individual may not designate on the resident or nonresident's
             1151      individual income tax return a contribution to a Utah Educational Savings Plan account.
             1152          (2) The commission shall send the contribution to the Utah Educational Savings Plan
             1153      [Trust] along with information requested by the Utah Educational Savings Plan [Trust],
             1154      including the taxpayer's name, Social Security number, and address.
             1155          (3) (a) If the taxpayer owns a Utah Educational Savings Plan account, the Utah
             1156      Educational Savings Plan [Trust] shall deposit the contribution into the account.
             1157          (b) If the taxpayer owns more than one Utah Educational Savings Plan account, the
             1158      Utah Educational Savings Plan [Trust] shall allocate the contribution among the accounts in
             1159      equal amounts.
             1160          (c) (i) If the taxpayer does not own a Utah Educational Savings Plan account, the Utah
             1161      Educational Savings Plan [Trust] shall send the taxpayer an account agreement.
             1162          (ii) If the taxpayer does not sign and return the account agreement by the date
             1163      specified by the Utah Educational Savings Plan [Trust], the Utah Educational Savings Plan
             1164      [Trust] shall return the contribution to the taxpayer without any interest or earnings.
             1165          (4) For the purpose of determining interest on an overpayment or refund under Section
             1166      59-1-402 , no interest accrues after the commission sends the contribution to the Utah
             1167      Educational Savings Plan [Trust].
             1168          Section 23. Section 63G-2-305 is amended to read:
             1169           63G-2-305. Protected records.
             1170          The following records are protected if properly classified by a governmental entity:
             1171          (1) trade secrets as defined in Section 13-24-2 if the person submitting the trade secret
             1172      has provided the governmental entity with the information specified in Section 63G-2-309 ;
             1173          (2) commercial information or nonindividual financial information obtained from a
             1174      person if:
             1175          (a) disclosure of the information could reasonably be expected to result in unfair
             1176      competitive injury to the person submitting the information or would impair the ability of the
             1177      governmental entity to obtain necessary information in the future;


             1178          (b) the person submitting the information has a greater interest in prohibiting access
             1179      than the public in obtaining access; and
             1180          (c) the person submitting the information has provided the governmental entity with
             1181      the information specified in Section 63G-2-309 ;
             1182          (3) commercial or financial information acquired or prepared by a governmental entity
             1183      to the extent that disclosure would lead to financial speculations in currencies, securities, or
             1184      commodities that will interfere with a planned transaction by the governmental entity or cause
             1185      substantial financial injury to the governmental entity or state economy;
             1186          (4) records the disclosure of which could cause commercial injury to, or confer a
             1187      competitive advantage upon a potential or actual competitor of, a commercial project entity as
             1188      defined in Subsection 11-13-103 (4);
             1189          (5) test questions and answers to be used in future license, certification, registration,
             1190      employment, or academic examinations;
             1191          (6) records the disclosure of which would impair governmental procurement
             1192      proceedings or give an unfair advantage to any person proposing to enter into a contract or
             1193      agreement with a governmental entity, except, subject to Subsections (1) and (2), that this
             1194      Subsection (6) does not restrict the right of a person to have access to, once the contract or
             1195      grant has been awarded, a bid, proposal, or application submitted to or by a governmental
             1196      entity in response to:
             1197          (a) a request for bids;
             1198          (b) a request for proposals;
             1199          (c) a grant; or
             1200          (d) other similar document;
             1201          (7) records that would identify real property or the appraisal or estimated value of real
             1202      or personal property, including intellectual property, under consideration for public acquisition
             1203      before any rights to the property are acquired unless:
             1204          (a) public interest in obtaining access to the information outweighs the governmental
             1205      entity's need to acquire the property on the best terms possible;


             1206          (b) the information has already been disclosed to persons not employed by or under a
             1207      duty of confidentiality to the entity;
             1208          (c) in the case of records that would identify property, potential sellers of the described
             1209      property have already learned of the governmental entity's plans to acquire the property;
             1210          (d) in the case of records that would identify the appraisal or estimated value of
             1211      property, the potential sellers have already learned of the governmental entity's estimated value
             1212      of the property; or
             1213          (e) the property under consideration for public acquisition is a single family residence
             1214      and the governmental entity seeking to acquire the property has initiated negotiations to
             1215      acquire the property as required under Section 78B-6-505 ;
             1216          (8) records prepared in contemplation of sale, exchange, lease, rental, or other
             1217      compensated transaction of real or personal property including intellectual property, which, if
             1218      disclosed prior to completion of the transaction, would reveal the appraisal or estimated value
             1219      of the subject property, unless:
             1220          (a) the public interest in access outweighs the interests in restricting access, including
             1221      the governmental entity's interest in maximizing the financial benefit of the transaction; or
             1222          (b) when prepared by or on behalf of a governmental entity, appraisals or estimates of
             1223      the value of the subject property have already been disclosed to persons not employed by or
             1224      under a duty of confidentiality to the entity;
             1225          (9) records created or maintained for civil, criminal, or administrative enforcement
             1226      purposes or audit purposes, or for discipline, licensing, certification, or registration purposes,
             1227      if release of the records:
             1228          (a) reasonably could be expected to interfere with investigations undertaken for
             1229      enforcement, discipline, licensing, certification, or registration purposes;
             1230          (b) reasonably could be expected to interfere with audits, disciplinary, or enforcement
             1231      proceedings;
             1232          (c) would create a danger of depriving a person of a right to a fair trial or impartial
             1233      hearing;


             1234          (d) reasonably could be expected to disclose the identity of a source who is not
             1235      generally known outside of government and, in the case of a record compiled in the course of
             1236      an investigation, disclose information furnished by a source not generally known outside of
             1237      government if disclosure would compromise the source; or
             1238          (e) reasonably could be expected to disclose investigative or audit techniques,
             1239      procedures, policies, or orders not generally known outside of government if disclosure would
             1240      interfere with enforcement or audit efforts;
             1241          (10) records the disclosure of which would jeopardize the life or safety of an
             1242      individual;
             1243          (11) records the disclosure of which would jeopardize the security of governmental
             1244      property, governmental programs, or governmental recordkeeping systems from damage, theft,
             1245      or other appropriation or use contrary to law or public policy;
             1246          (12) records that, if disclosed, would jeopardize the security or safety of a correctional
             1247      facility, or records relating to incarceration, treatment, probation, or parole, that would
             1248      interfere with the control and supervision of an offender's incarceration, treatment, probation,
             1249      or parole;
             1250          (13) records that, if disclosed, would reveal recommendations made to the Board of
             1251      Pardons and Parole by an employee of or contractor for the Department of Corrections, the
             1252      Board of Pardons and Parole, or the Department of Human Services that are based on the
             1253      employee's or contractor's supervision, diagnosis, or treatment of any person within the board's
             1254      jurisdiction;
             1255          (14) records and audit workpapers that identify audit, collection, and operational
             1256      procedures and methods used by the State Tax Commission, if disclosure would interfere with
             1257      audits or collections;
             1258          (15) records of a governmental audit agency relating to an ongoing or planned audit
             1259      until the final audit is released;
             1260          (16) records prepared by or on behalf of a governmental entity solely in anticipation of
             1261      litigation that are not available under the rules of discovery;


             1262          (17) records disclosing an attorney's work product, including the mental impressions
             1263      or legal theories of an attorney or other representative of a governmental entity concerning
             1264      litigation;
             1265          (18) records of communications between a governmental entity and an attorney
             1266      representing, retained, or employed by the governmental entity if the communications would
             1267      be privileged as provided in Section 78B-1-137 ;
             1268          (19) (a) (i) personal files of a state legislator, including personal correspondence to or
             1269      from a member of the Legislature; and
             1270          (ii) notwithstanding Subsection (19)(a)(i), correspondence that gives notice of
             1271      legislative action or policy may not be classified as protected under this section; and
             1272          (b) (i) an internal communication that is part of the deliberative process in connection
             1273      with the preparation of legislation between:
             1274          (A) members of a legislative body;
             1275          (B) a member of a legislative body and a member of the legislative body's staff; or
             1276          (C) members of a legislative body's staff; and
             1277          (ii) notwithstanding Subsection (19)(b)(i), a communication that gives notice of
             1278      legislative action or policy may not be classified as protected under this section;
             1279          (20) (a) records in the custody or control of the Office of Legislative Research and
             1280      General Counsel, that, if disclosed, would reveal a particular legislator's contemplated
             1281      legislation or contemplated course of action before the legislator has elected to support the
             1282      legislation or course of action, or made the legislation or course of action public; and
             1283          (b) notwithstanding Subsection (20)(a), the form to request legislation submitted to the
             1284      Office of Legislative Research and General Counsel is a public document unless a legislator
             1285      asks that the records requesting the legislation be maintained as protected records until such
             1286      time as the legislator elects to make the legislation or course of action public;
             1287          (21) research requests from legislators to the Office of Legislative Research and
             1288      General Counsel or the Office of the Legislative Fiscal Analyst and research findings prepared
             1289      in response to these requests;


             1290          (22) drafts, unless otherwise classified as public;
             1291          (23) records concerning a governmental entity's strategy about collective bargaining or
             1292      pending litigation;
             1293          (24) records of investigations of loss occurrences and analyses of loss occurrences that
             1294      may be covered by the Risk Management Fund, the Employers' Reinsurance Fund, the
             1295      Uninsured Employers' Fund, or similar divisions in other governmental entities;
             1296          (25) records, other than personnel evaluations, that contain a personal
             1297      recommendation concerning an individual if disclosure would constitute a clearly unwarranted
             1298      invasion of personal privacy, or disclosure is not in the public interest;
             1299          (26) records that reveal the location of historic, prehistoric, paleontological, or
             1300      biological resources that if known would jeopardize the security of those resources or of
             1301      valuable historic, scientific, educational, or cultural information;
             1302          (27) records of independent state agencies if the disclosure of the records would
             1303      conflict with the fiduciary obligations of the agency;
             1304          (28) records of an institution within the state system of higher education defined in
             1305      Section 53B-1-102 regarding tenure evaluations, appointments, applications for admissions,
             1306      retention decisions, and promotions, which could be properly discussed in a meeting closed in
             1307      accordance with Title 52, Chapter 4, Open and Public Meetings Act, provided that records of
             1308      the final decisions about tenure, appointments, retention, promotions, or those students
             1309      admitted, may not be classified as protected under this section;
             1310          (29) records of the governor's office, including budget recommendations, legislative
             1311      proposals, and policy statements, that if disclosed would reveal the governor's contemplated
             1312      policies or contemplated courses of action before the governor has implemented or rejected
             1313      those policies or courses of action or made them public;
             1314          (30) records of the Office of the Legislative Fiscal Analyst relating to budget analysis,
             1315      revenue estimates, and fiscal notes of proposed legislation before issuance of the final
             1316      recommendations in these areas;
             1317          (31) records provided by the United States or by a government entity outside the state


             1318      that are given to the governmental entity with a requirement that they be managed as protected
             1319      records if the providing entity certifies that the record would not be subject to public
             1320      disclosure if retained by it;
             1321          (32) transcripts, minutes, or reports of the closed portion of a meeting of a public body
             1322      except as provided in Section 52-4-206 ;
             1323          (33) records that would reveal the contents of settlement negotiations but not
             1324      including final settlements or empirical data to the extent that they are not otherwise exempt
             1325      from disclosure;
             1326          (34) memoranda prepared by staff and used in the decision-making process by an
             1327      administrative law judge, a member of the Board of Pardons and Parole, or a member of any
             1328      other body charged by law with performing a quasi-judicial function;
             1329          (35) records that would reveal negotiations regarding assistance or incentives offered
             1330      by or requested from a governmental entity for the purpose of encouraging a person to expand
             1331      or locate a business in Utah, but only if disclosure would result in actual economic harm to the
             1332      person or place the governmental entity at a competitive disadvantage, but this section may
             1333      not be used to restrict access to a record evidencing a final contract;
             1334          (36) materials to which access must be limited for purposes of securing or maintaining
             1335      the governmental entity's proprietary protection of intellectual property rights including
             1336      patents, copyrights, and trade secrets;
             1337          (37) the name of a donor or a prospective donor to a governmental entity, including an
             1338      institution within the state system of higher education defined in Section 53B-1-102 , and other
             1339      information concerning the donation that could reasonably be expected to reveal the identity of
             1340      the donor, provided that:
             1341          (a) the donor requests anonymity in writing;
             1342          (b) any terms, conditions, restrictions, or privileges relating to the donation may not be
             1343      classified protected by the governmental entity under this Subsection (37); and
             1344          (c) except for an institution within the state system of higher education defined in
             1345      Section 53B-1-102 , the governmental unit to which the donation is made is primarily engaged


             1346      in educational, charitable, or artistic endeavors, and has no regulatory or legislative authority
             1347      over the donor, a member of the donor's immediate family, or any entity owned or controlled
             1348      by the donor or the donor's immediate family;
             1349          (38) accident reports, except as provided in Sections 41-6a-404 , 41-12a-202 , and
             1350      73-18-13 ;
             1351          (39) a notification of workers' compensation insurance coverage described in Section
             1352      34A-2-205 ;
             1353          (40) (a) the following records of an institution within the state system of higher
             1354      education defined in Section 53B-1-102 , which have been developed, discovered, disclosed to,
             1355      or received by or on behalf of faculty, staff, employees, or students of the institution:
             1356          (i) unpublished lecture notes;
             1357          (ii) unpublished notes, data, and information:
             1358          (A) relating to research; and
             1359          (B) of:
             1360          (I) the institution within the state system of higher education defined in Section
             1361      53B-1-102 ; or
             1362          (II) a sponsor of sponsored research;
             1363          (iii) unpublished manuscripts;
             1364          (iv) creative works in process;
             1365          (v) scholarly correspondence; and
             1366          (vi) confidential information contained in research proposals;
             1367          (b) Subsection (40)(a) may not be construed to prohibit disclosure of public
             1368      information required pursuant to Subsection 53B-16-302 (2)(a) or (b); and
             1369          (c) Subsection (40)(a) may not be construed to affect the ownership of a record;
             1370          (41) (a) records in the custody or control of the Office of Legislative Auditor General
             1371      that would reveal the name of a particular legislator who requests a legislative audit prior to
             1372      the date that audit is completed and made public; and
             1373          (b) notwithstanding Subsection (41)(a), a request for a legislative audit submitted to


             1374      the Office of the Legislative Auditor General is a public document unless the legislator asks
             1375      that the records in the custody or control of the Office of Legislative Auditor General that
             1376      would reveal the name of a particular legislator who requests a legislative audit be maintained
             1377      as protected records until the audit is completed and made public;
             1378          (42) records that provide detail as to the location of an explosive, including a map or
             1379      other document that indicates the location of:
             1380          (a) a production facility; or
             1381          (b) a magazine;
             1382          (43) information:
             1383          (a) contained in the statewide database of the Division of Aging and Adult Services
             1384      created by Section 62A-3-311.1 ; or
             1385          (b) received or maintained in relation to the Identity Theft Reporting Information
             1386      System (IRIS) established under Section 67-5-22 ;
             1387          (44) information contained in the Management Information System and Licensing
             1388      Information System described in Title 62A, Chapter 4a, Child and Family Services;
             1389          (45) information regarding National Guard operations or activities in support of the
             1390      National Guard's federal mission;
             1391          (46) records provided by any pawn or secondhand business to a law enforcement
             1392      agency or to the central database in compliance with Title 13, Chapter 32a, Pawnshop and
             1393      Secondhand Merchandise Transaction Information Act;
             1394          (47) information regarding food security, risk, and vulnerability assessments
             1395      performed by the Department of Agriculture and Food;
             1396          (48) except to the extent that the record is exempt from this chapter pursuant to
             1397      Section 63G-2-106 , records related to an emergency plan or program prepared or maintained
             1398      by the Division of Homeland Security the disclosure of which would jeopardize:
             1399          (a) the safety of the general public; or
             1400          (b) the security of:
             1401          (i) governmental property;


             1402          (ii) governmental programs; or
             1403          (iii) the property of a private person who provides the Division of Homeland Security
             1404      information;
             1405          (49) records of the Department of Agriculture and Food relating to the National
             1406      Animal Identification System or any other program that provides for the identification, tracing,
             1407      or control of livestock diseases, including any program established under Title 4, Chapter 24,
             1408      Utah Livestock Brand and Anti-theft Act or Title 4, Chapter 31, Livestock Inspection and
             1409      Quarantine;
             1410          (50) as provided in Section 26-39-501 :
             1411          (a) information or records held by the Department of Health related to a complaint
             1412      regarding a child care program or residential child care which the department is unable to
             1413      substantiate; and
             1414          (b) information or records related to a complaint received by the Department of Health
             1415      from an anonymous complainant regarding a child care program or residential child care;
             1416          (51) unless otherwise classified as public under Section 63G-2-301 and except as
             1417      provided under Section 41-1a-116 , an individual's home address, home telephone number, or
             1418      personal mobile phone number, if:
             1419          (a) the individual is required to provide the information in order to comply with a law,
             1420      ordinance, rule, or order of a government entity; and
             1421          (b) the subject of the record has a reasonable expectation that this information will be
             1422      kept confidential due to:
             1423          (i) the nature of the law, ordinance, rule, or order; and
             1424          (ii) the individual complying with the law, ordinance, rule, or order;
             1425          (52) the name, home address, work addresses, and telephone numbers of an individual
             1426      that is engaged in, or that provides goods or services for, medical or scientific research that is:
             1427          (a) conducted within the state system of higher education, as defined in Section
             1428      53B-1-102 ; and
             1429          (b) conducted using animals;


             1430          (53) an initial proposal under Title 63M, Chapter 1, Part 26, Government Procurement
             1431      Private Proposal Program, to the extent not made public by rules made under that chapter;
             1432          (54) information collected and a report prepared by the Judicial Performance
             1433      Evaluation Commission concerning a judge, unless Section 20A-7-702 or Title 78A, Chapter
             1434      12, Judicial Performance Evaluation Commission Act, requires disclosure of, or makes public,
             1435      the information or report;
             1436          (55) (a) records of the Utah Educational Savings Plan [Trust] created under Section
             1437      53B-8a-103 if the disclosure of the records would conflict with its fiduciary obligations;
             1438          (b) proposals submitted to the Utah Educational Savings Plan [Trust]; and
             1439          (c) contracts entered into by the Utah Educational Savings Plan [Trust] and the related
             1440      payments;
             1441          (56) records contained in the Management Information System created in Section
             1442      62A-4a-1003 ;
             1443          (57) records provided or received by the Public Lands Policy Coordinating Office in
             1444      furtherance of any contract or other agreement made in accordance with Section 63J-4-603 ;
             1445      and
             1446          (58) information requested by and provided to the Utah State 911 Committee under
             1447      Section 53-10-602 .
             1448          Section 24. Effective date.
             1449          If approved by two-thirds of all the members elected to each house, this bill takes effect
             1450      upon approval by the governor, or the day following the constitutional time limit of Utah
             1451      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
             1452      the date of veto override.


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