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First Substitute S.B. 95

Senator Wayne L. Niederhauser proposes the following substitute bill:


             1     
UTAH EDUCATIONAL SAVINGS PLAN

             2     
AMENDMENTS

             3     
2010 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Wayne L. Niederhauser

             6     
House Sponsor: ____________

             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 the
             14      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 the
             77      state's public institutions of higher education and the general welfare of the citizens of the state
             78      will be enhanced by establishing a [program] plan which allows citizens of the state to invest
             79      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 moneys
             84      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 available
             87      to account owners to enhance or encourage their savings invested for future higher education


             88      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 [Trust].
             106          (7) "Executive director" means the administrator appointed to administer and manage
             107      the Utah Educational Savings Plan.
             108          [(7)] (8) "Higher education costs" means qualified higher education expenses as
             109      defined in Section 529(e)(3), Internal Revenue Code.
             110          (9) "Plan" means the Utah Educational Savings Plan created in Section 53B-8a-103 .
             111          [(8) "Program administrator" means the administrator of the Utah Educational Savings
             112      Plan Trust appointed by the board to administer and manage the Utah Educational Savings Plan
             113      Trust.]
             114          [(9)] (10) "Program fund" means the program fund created under Section 53B-8a-107 ,
             115      which is held as a separate fund within the Utah Educational Savings Plan [Trust].
             116          [(10)] (11) "Qualified investment" means an amount invested in accordance with an
             117      account agreement established under this chapter.
             118          [(11)] (12) "Tuition and fees" means the quarterly or semester charges imposed to


             119      attend an institution of higher education and required as a condition of enrollment.
             120          [(12) "Utah Educational Savings Plan Trust" means the Utah Educational Savings Plan
             121      Trust created under Section 53B-8a-103 .]
             122          Section 4. Section 53B-8a-103 is amended to read:
             123           53B-8a-103. Creation of Utah Educational Savings Plan -- Powers and duties of
             124      plan.
             125          (1) There is created the Utah Educational Savings Plan [Trust], which may also be
             126      known and function as the Utah Educational Savings Plan Trust.
             127          [(2) The board is the trustee of the Utah Educational Savings Plan Trust.]
             128          (2) The plan:
             129          (a) is a non-profit, self-supporting agency that administers a public trust;
             130          (b) shall administer the various programs, funds, trusts, plans, functions, duties, and
             131      obligations assigned to the plan:
             132          (i) consistent with sound fiduciary principles; and
             133          (ii) subject to review of the board; and
             134          (c) shall be known as and managed as a qualified tuition program in compliance with
             135      Section 529, Internal Revenue Code, that is sponsored by the state.
             136          (3) [The board, in the capacity of trustee,] The plan may:
             137          [(a) exercise any authority granted by law to the Board of Regents;]
             138          [(b)] (a) make and enter into contracts necessary for the administration of the [Utah
             139      Educational Savings Plan Trust created under this chapter;] plan payable from plan moneys,
             140      including:
             141          (i) contracts for goods and services; and
             142          (ii) contracts to engage:
             143          (A) personnel, including consultants, actuaries, managers, counsel, and auditors for the
             144      purpose of rendering professional, managerial, and technical assistance and advice; and
             145          (B) one or more investment advisors, registered under the Investment Advisers Act of
             146      1940, with at least 5,000 advisory clients and at least $1,000,000,000 under management, to
             147      provide investment advice to the board with respect to the assets held in each account;
             148          [(c)] (b) adopt a corporate seal and change and amend it from time to time;
             149          [(d)] (c) invest moneys within the program fund:


             150          (i) (A) in any investments that are determined by the board to be appropriate [and are
             151      approved by the state treasurer]; or
             152          (B) in mutual funds registered under the Investment Company Act of 1940, consistent
             153      with the best interests of a designated beneficiary's higher education funding needs; and
             154          (ii) are in compliance with rules of the State Money Management Council applicable to
             155      gift funds;
             156          [(e)] (d) invest moneys within the endowment fund in any investments that are:
             157          (i) determined by the board to be appropriate;
             158          (ii) approved by the state treasurer; and
             159          (iii) in compliance with rules of the State Money Management Council applicable to
             160      gift funds;
             161          [(f)] (e) enter into agreements with account owners, any institution of higher education,
             162      any federal or state agency, or other entity as required to implement this chapter;
             163          [(g)] (f) solicit and accept any grants, gifts, legislative appropriations, and other
             164      moneys from the state, any unit of federal, state, or local government, or any other person, firm,
             165      partnership, or corporation for deposit to the administrative fund, endowment fund, or the
             166      program fund;
             167          [(h) enter into account agreements with account owners;]
             168          [(i) make payments to institutions of higher education pursuant to account agreements
             169      on behalf of beneficiaries;]
             170          [(j) make refunds to account owners upon the termination of account agreements
             171      pursuant to the provisions of this chapter;]
             172          [(k) appoint a program administrator and determine the duties of the program
             173      administrator and other staff as necessary and fix their compensation;]
             174          [(l)] (g) make provision for the payment of costs of administration and operation of the
             175      [Utah Educational Savings Plan Trust; and] plan;
             176          [(m) carry out the duties and obligations of the Utah Educational Savings Plan Trust
             177      pursuant to this chapter.]
             178          (h) carry out studies and projections in order to advise account owners regarding
             179      present and estimated future higher education costs and levels of financial participation in the
             180      plan required in order to enable account owners to achieve their educational funding objective;


             181          (i) participate in federal, state, local governmental, or private programs;
             182          (j) create public and private partnerships, including investment or management
             183      relationships with other 529 plans or entities;
             184          (k) promulgate, impose, and collect administrative fees and charges in connection with
             185      transactions of the plan, and provide for reasonable service charges;
             186          (l) procure insurance:
             187          (i) against any loss in connection with the property, assets, or activities of the plan; and
             188          (ii) indemnifying any member of the board from personal loss or accountability arising
             189      from liability resulting from a member's action or inaction as a member of the plan's board;
             190          (m) administer outreach efforts to:
             191          (i) market and publicize the plan and its products to existing and prospective account
             192      owners; and
             193          (ii) encourage economically challenged populations to save for post-secondary
             194      education;
             195          (n) adopt, trademark, and copyright names and materials for use in marketing and
             196      publicizing the plan and its products;
             197          (o) administer the funds of the plan;
             198          (p) sue and be sued in its own name; and
             199          (q) have and exercise any other powers or duties that are necessary or appropriate to
             200      carry out and effectuate the purposes of this chapter.
             201          Section 5. Section 53B-8a-104 is amended to read:
             202           53B-8a-104. Office facilities, clerical, and administrative support for the Utah
             203      Educational Savings Plan.
             204          (1) The board shall provide to the [Utah Educational Savings Plan Trust] plan, by
             205      agreement, administrative and clerical support and office facilities and space.
             206          (2) Reasonable charges or fees may be levied against the [Utah Educational Savings
             207      Plan Trust] plan pursuant to the agreement for the services provided by the board.
             208          Section 6. Section 53B-8a-105 is amended to read:
             209           53B-8a-105. Powers and duties of board.
             210          (1) The board has all powers necessary to carry out and effectuate the purposes,
             211      objectives, and provisions of this chapter pertaining to the [Utah Educational Savings Plan


             212      Trust, including the power to:] plan.
             213          (2) The duties, responsibilities, funds, liabilities, and expenses of the board in oversight
             214      and governance of the plan shall be maintained separate and apart from the board's other duties,
             215      responsibilities, funds, liabilities, and expenses.
             216          (3) The board shall make policies governing the:
             217          (a) administration of the plan; and
             218          (b) appointment and duties of the plan's executive director.
             219          [(1) engage:]
             220          [(a) one or more investment advisors, registered under the Investment Advisers Act of
             221      1940, with at least 5,000 advisory clients and at least $1,000,000,000 under management, to
             222      provide investment advice to the board with respect to the assets held in each account;]
             223          [(b) an administrator to perform recordkeeping functions on behalf of the Utah
             224      Educational Savings Plan Trust; and]
             225          [(c) a custodian for the safekeeping of the assets of the Utah Educational Savings Plan
             226      Trust;]
             227          [(2) carry out studies and projections in order to advise account owners regarding
             228      present and estimated future higher education costs and levels of financial participation in the
             229      Utah Educational Savings Plan Trust required in order to enable account owners to achieve
             230      their educational funding objective;]
             231          [(3) contract for goods and services and engage personnel as necessary, including
             232      consultants, actuaries, managers, counsel, and auditors for the purpose of rendering
             233      professional, managerial, and technical assistance and advice, all of which contract obligations
             234      and services shall be payable from any moneys of the Utah Educational Savings Plan Trust;]
             235          [(4) participate in any other way in any federal, state, or local governmental program
             236      for the benefit of the Utah Educational Savings Plan Trust;]
             237          [(5) promulgate, impose, and collect administrative fees and charges in connection
             238      with transactions of the Utah Educational Savings Plan Trust, and provide for reasonable
             239      service charges, including penalties for cancellations and late payments;]
             240          [(6) procure insurance against any loss in connection with the property, assets, or
             241      activities of the Utah Educational Savings Plan Trust;]
             242          [(7) administer the funds of the Utah Educational Savings Plan Trust;]


             243          [(8) solicit and accept for the benefit of the endowment fund gifts, grants, and other
             244      moneys, including general fund moneys from the state and grants from any federal or other
             245      governmental agency;]
             246          [(9) procure insurance indemnifying any member of the board from personal loss or
             247      accountability arising from liability resulting from a member's action or inaction as a member
             248      of the board; and]
             249          [(10) make rules and regulations for the administration of the Utah Educational
             250      Savings Plan Trust.]
             251          Section 7. Section 53B-8a-106 is amended to read:
             252           53B-8a-106. Account agreements.
             253          The [Utah Educational Savings Plan Trust] plan may enter into account agreements
             254      with account owners on behalf of beneficiaries under the following terms and agreements:
             255          (1) (a) An account agreement may require an account owner to agree to invest a
             256      specific amount of money in the [Utah Educational Savings Plan Trust] plan for a specific
             257      period of time for the benefit of a specific beneficiary, not to exceed an amount determined by
             258      the [program administrator] executive director.
             259          (b) Account agreements may be amended to provide for adjusted levels of payments
             260      based upon changed circumstances or changes in educational plans.
             261          (c) An account owner may make additional optional payments as long as the total
             262      payments for a specific beneficiary do not exceed the total estimated higher education costs as
             263      determined by the [program administrator] executive director.
             264          (d) Subject to [Subsection] Subsections (1)(f) and (g), the maximum amount of a
             265      qualified investment that a corporation that is an account owner may subtract from unadjusted
             266      income for a taxable year in accordance with Title 59, Chapter 7, Corporate Franchise and
             267      Income Taxes, is [$1,650] $1,710 for each individual beneficiary for the taxable year beginning
             268      on or after January 1, [2008] 2010, but beginning on or before December 31, [2008] 2010.
             269          (e) Subject to [Subsection] Subsections (1)(f) and (g), the maximum amount of a
             270      qualified investment that may be used as the basis for claiming a tax credit in accordance with
             271      Section 59-10-1017 , is:
             272          (i) for a resident or nonresident estate or trust that is an account owner, [$1,650] $1,710
             273      for each individual beneficiary for the taxable year beginning on or after January 1, [2008]


             274      2010, but beginning on or before December 31, [2008] 2010;
             275          (ii) for a resident or nonresident individual that is an account owner, other than a
             276      husband and wife who are account owners and file a single return jointly under Title 59,
             277      Chapter 10, Individual Income Tax Act, [$1,650] $1,710 for each individual beneficiary for the
             278      taxable year beginning on or after January 1, [2008] 2010, but beginning on or before
             279      December 31, [2008] 2010; or
             280          (iii) for a husband and wife who are account owners and file a single return jointly
             281      under Title 59, Chapter 10, Individual Income Tax Act, [$3,300] $3,420 for each individual
             282      beneficiary:
             283          (A) for the taxable year beginning on or after January 1, [2008] 2010, but beginning on
             284      or before December 31, [2008] 2010; and
             285          (B) regardless of whether the [Utah Educational Savings Plan Trust] plan has entered
             286      into:
             287          (I) a separate account agreement with each spouse; or
             288          (II) a single account agreement with both spouses jointly.
             289          (f) (i) For taxable years beginning on or after January 1, [2009] 2011, the [program
             290      administrator] executive director shall annually increase [or decrease] the maximum amount of
             291      a qualified investment described in Subsections (1)(d) and (1)(e)(i) and (ii), by a percentage
             292      equal to the [percentage difference between] increase in the consumer price index for the
             293      preceding calendar year [and the consumer price index for the calendar year 2007].
             294          (ii) After making an increase [or decrease] required by Subsection (1)(f)(i), the
             295      [program administrator] executive director shall:
             296          (A) round the maximum amount of the qualified investments described in Subsections
             297      (1)(d) and (1)(e)(i) and (ii) increased [or decreased] under Subsection (1)(f)(i) to the nearest 10
             298      dollar increment; and
             299          (B) increase [or decrease] the maximum amount of the qualified investment described
             300      in Subsection (1)(e)(iii) so that the maximum amount of the qualified investment described in
             301      Subsection (1)(e)(iii) is equal to the product of:
             302          (I) the maximum amount of the qualified investment described in Subsection (1)(e)(ii)
             303      as rounded under Subsection (1)(f)(ii)(A); and
             304          (II) two.


             305          (iii) For purposes of Subsections (1)(f)(i) and (ii), the [program administrator]
             306      executive director shall calculate the consumer price index as provided in Sections 1(f)(4) and
             307      1(f)(5), Internal Revenue Code.
             308          (g) For taxable years beginning on or after January 1, 2011, the executive director shall
             309      keep the previous year's maximum amount of a qualified investment described in Subsections
             310      (1)(d) and (1)(e)(i) and (ii) if the consumer price index for the preceding calendar year
             311      decreases.
             312          (2) (a) Beneficiaries designated in account agreements must be designated after birth
             313      and before age 19 for an account owner to:
             314          (i) subtract a qualified investment from income under Title 59, Chapter 7, Corporate
             315      Franchise and Income Taxes; or
             316          (ii) use a qualified investment as the basis for claiming a tax credit in accordance with
             317      Section 59-10-1017 .
             318          (b) Account owners may designate a beneficiary age 19 or older, but investments for
             319      that beneficiary are not eligible to be:
             320          (i) subtracted from income under Title 59, Chapter 7, Corporate Franchise and Income
             321      Taxes; or
             322          (ii) used as the basis for claiming a tax credit in accordance with Section 59-10-1017 .
             323          (3) Each account agreement shall state clearly that there are no guarantees regarding
             324      moneys in the [Utah Educational Savings Plan Trust] plan as to the return of principal and that
             325      losses could occur.
             326          (4) Each account agreement shall provide that:
             327          (a) a contributor to, or designated beneficiary under, an account agreement may not
             328      direct the investment of any contributions or earnings on contributions;
             329          (b) any part of the money in any account may not be used as security for a loan; and
             330          (c) an account owner may not borrow from the [Utah Educational Savings Plan Trust]
             331      plan.
             332          (5) The execution of an account agreement by the [trust] plan may not guarantee in any
             333      way that higher education costs will be equal to projections and estimates provided by the
             334      [Utah Educational Savings Plan Trust] plan or that the beneficiary named in any account
             335      agreement will:


             336          (a) be admitted to an institution of higher education;
             337          (b) if admitted, be determined a resident for tuition purposes by the institution of
             338      higher education;
             339          (c) be allowed to continue attendance at the institution of higher education following
             340      admission; or
             341          (d) graduate from the institution of higher education.
             342          (6) A beneficiary may be changed as permitted by the rules and regulations of the board
             343      upon written request of the account owner prior to the date of admission of any beneficiary
             344      under an account agreement by an institution of higher education so long as the substitute
             345      beneficiary is eligible for participation.
             346          (7) An account agreement may be freely amended throughout the term of the account
             347      agreement in order to enable an account owner to increase or decrease the level of
             348      participation, change the designation of beneficiaries, and carry out similar matters as
             349      authorized by rule.
             350          (8) Each account agreement shall provide that:
             351          (a) the account agreement may be canceled upon the terms and conditions, and upon
             352      payment of the fees and costs set forth and contained in the board's rules and regulations; and
             353          (b) the [program administrator] executive director may amend the agreement
             354      unilaterally and retroactively, if necessary, to maintain the [Utah Educational Savings Plan
             355      Trust] plan as a qualified tuition program under Section 529, Internal Revenue Code.
             356          Section 8. Section 53B-8a-107 is amended to read:
             357           53B-8a-107. Program, administrative, and endowment funds -- Investment and
             358      payments from funds.
             359          (1) The [board] plan shall segregate moneys received by the [Utah Educational Savings
             360      Plan Trust] plan into three funds, the program fund, the administrative fund, and the
             361      endowment fund.
             362          (2) Transfers may be made from the program fund to the administrative fund to pay
             363      operating costs:
             364          (a) associated with administering the [Utah Educational Savings Plan Trust] plan and
             365      as required under Sections 53B-8a-103 through 53B-8a-105 ; and
             366          (b) as included in the budget approved by the board [of directors of the Utah


             367      Educational Savings Plan Trust].
             368          (3) (a) All moneys paid by account owners in connection with account agreements
             369      shall be deposited as received into separate accounts within the program fund which shall be
             370      [promptly] invested and accounted for separately.
             371          (b) Moneys accrued by account owners in the program fund [of the Utah Educational
             372      Savings Plan Trust] may be used for:
             373          (i) payments to any institution of higher education;
             374          (ii) payments to the account owner or beneficiary;
             375          (iii) payments to another 529 plan; or
             376          (iv) other expenditures or transfers made in accordance with the account agreement.
             377          (4) (a) All moneys received by the [Utah Educational Savings Plan Trust] plan from
             378      the proceeds of gifts and other endowments for the purposes of the [Utah Educational Savings
             379      Plan Trust] plan shall be:
             380          (i) deposited, according to the nature of the donation, as received into the endowment
             381      fund[, which shall be promptly] or the administrative fund; and
             382          (ii) invested and accounted for separately.
             383          (b) Any gifts, grants, or donations made by any governmental unit or any person, firm,
             384      partnership, or corporation to the [Utah Educational Savings Plan Trust] plan for deposit to the
             385      endowment fund is a grant, gift, or donation to the state for the accomplishment of a valid
             386      public eleemosynary, charitable, and educational purpose and is not included in the income of
             387      the donor for Utah tax purposes.
             388          (c) The endowment fund or the administrative fund may be used to enhance the savings
             389      of low income account owners investing in the [Utah Educational Savings Plan Trust] plan, for
             390      scholarships, or for other college savings incentive programs as approved by the board.
             391          (d) Transfers may be made from the endowment fund to the administrative fund upon
             392      approval by the board.
             393          (e) Endowment fund earnings not accruing to a beneficiary under an account agreement
             394      or not transferred to the administrative fund shall be reinvested in the endowment fund.
             395          Section 9. Section 53B-8a-108 is amended to read:
             396           53B-8a-108. Cancellation of agreements.
             397          (1) Any account owner may cancel an account agreement at will.


             398          (2) If an account agreement is cancelled by the account owner, the current account
             399      balance shall be disbursed to the account owner less:
             400          (a) an administrative refund fee, which may be charged by the [Utah Educational
             401      Savings Plan Trust] plan, except as provided in Subsection (3); and
             402          (b) any penalty or tax required to be withheld by the Internal Revenue Code.
             403          (3) An administration refund fee may not be levied by the [Utah Educational Savings
             404      Plan Trust] plan if the account agreement is cancelled due to:
             405          (a) the death of the beneficiary; or
             406          (b) the permanent disability or mental incapacity of the beneficiary.
             407          Section 10. Section 53B-8a-109 is amended to read:
             408           53B-8a-109. Repayment and ownership of funds in the account -- Transfer of
             409      ownership rights.
             410          (1) (a) The account owner retains ownership of funds in the account until:
             411          (i) funds are used to pay higher education costs for the beneficiary;
             412          (ii) funds are otherwise disbursed;
             413          (iii) funds are transferred for administrative costs; or
             414          (iv) the account is closed.
             415          (b) Funds in the account shall be considered to be held in trust for the benefit of the
             416      beneficiary.
             417          (2) Any amounts that may be paid pursuant to the [Utah Educational Savings Plan
             418      Trust] plan that are not listed in this section are owned by the [Utah Educational Savings Plan
             419      Trust] plan.
             420          (3) (a) An account owner may transfer ownership rights to another eligible person.
             421          (b) The transfer shall be affected and the property distributed in accordance with
             422      administrative regulations promulgated by the board or the terms of the account agreement.
             423          Section 11. Section 53B-8a-110 is amended to read:
             424           53B-8a-110. Effect of payments on determination of need and eligibility for
             425      student aid.
             426          No student loan program, student grant program, or other program administered by any
             427      agency of the state, except as may be otherwise provided by federal law or the provisions of
             428      any specific grant applicable to that law, shall take into account and consider amounts available


             429      for the payment of higher education costs pursuant to the [Utah Educational Savings Plan
             430      Trust] plan in determining need and eligibility for student aid.
             431          Section 12. Section 53B-8a-111 is amended to read:
             432           53B-8a-111. Annual audit of financial statements -- Information to governor and
             433      Legislature.
             434          (1) The financial statements of the [Utah Educational Savings Plan Trust] plan shall be
             435      audited annually by the state auditor or the state auditor's designee and reported in accordance
             436      with generally accepted accounting principles.
             437          (2) The [board] plan shall submit to the governor and the Legislature:
             438          (a) upon request, any studies or evaluations of the [Utah Educational Savings Plan
             439      Trust] plan;
             440          (b) upon request, a summary of the benefits provided by the [Utah Educational Savings
             441      Plan Trust] plan including the number of participants and beneficiaries in the [Utah
             442      Educational Savings Plan Trust] plan; and
             443          (c) upon request, any other information which is relevant in order to make a full, fair,
             444      and effective disclosure of the operations of the [Utah Educational Savings Plan Trust] plan.
             445          Section 13. Section 53B-8a-112 is amended to read:
             446           53B-8a-112. Tax considerations.
             447          (1) For tax purposes the property of the [Utah Educational Savings Plan Trust] plan
             448      and its income are governed by Section 59-10-201 .
             449          (2) The tax commission, in consultation with the board and the plan, may adopt rules
             450      necessary to monitor and implement the tax provisions referred to in Subsection (1) as related
             451      to the property of the [Utah Educational Savings Plan Trust] plan and its income.
             452          Section 14. Section 53B-8a-113 is amended to read:
             453           53B-8a-113. Property rights to plan assets.
             454          (1) The assets of the [Utah Educational Savings Plan Trust] plan, including the
             455      program fund and the endowment fund, shall at all times be preserved, invested, and expended
             456      solely and only for the purposes of the [Utah Educational Savings Plan Trust] plan and shall be
             457      held in trust for the account owners and beneficiaries.
             458          (2) No property rights in the [Utah Educational Savings Plan Trust] plan shall exist in
             459      favor of the state.


             460          (3) The assets may not be transferred or used by the state for any purposes other than
             461      the purposes of the [Utah Educational Savings Plan Trust] plan.
             462          Section 15. Section 59-1-403 is amended to read:
             463           59-1-403. Confidentiality -- Exceptions -- Penalty -- Application to property tax.
             464          (1) (a) Any of the following may not divulge or make known in any manner any
             465      information gained by that person from any return filed with the commission:
             466          (i) a tax commissioner;
             467          (ii) an agent, clerk, or other officer or employee of the commission; or
             468          (iii) a representative, agent, clerk, or other officer or employee of any county, city, or
             469      town.
             470          (b) An official charged with the custody of a return filed with the commission is not
             471      required to produce the return or evidence of anything contained in the return in any action or
             472      proceeding in any court, except:
             473          (i) in accordance with judicial order;
             474          (ii) on behalf of the commission in any action or proceeding under:
             475          (A) this title; or
             476          (B) other law under which persons are required to file returns with the commission;
             477          (iii) on behalf of the commission in any action or proceeding to which the commission
             478      is a party; or
             479          (iv) on behalf of any party to any action or proceeding under this title if the report or
             480      facts shown by the return are directly involved in the action or proceeding.
             481          (c) Notwithstanding Subsection (1)(b), a court may require the production of, and may
             482      admit in evidence, any portion of a return or of the facts shown by the return, as are specifically
             483      pertinent to the action or proceeding.
             484          (2) This section does not prohibit:
             485          (a) a person or that person's duly authorized representative from receiving a copy of
             486      any return or report filed in connection with that person's own tax;
             487          (b) the publication of statistics as long as the statistics are classified to prevent the
             488      identification of particular reports or returns; and
             489          (c) the inspection by the attorney general or other legal representative of the state of the
             490      report or return of any taxpayer:


             491          (i) who brings action to set aside or review a tax based on the report or return;
             492          (ii) against whom an action or proceeding is contemplated or has been instituted under
             493      this title; or
             494          (iii) against whom the state has an unsatisfied money judgment.
             495          (3) (a) Notwithstanding Subsection (1) and for purposes of administration, the
             496      commission may by rule, made in accordance with Title 63G, Chapter 3, Utah Administrative
             497      Rulemaking Act, provide for a reciprocal exchange of information with:
             498          (i) the United States Internal Revenue Service; or
             499          (ii) the revenue service of any other state.
             500          (b) Notwithstanding Subsection (1) and for all taxes except individual income tax and
             501      corporate franchise tax, the commission may by rule, made in accordance with Title 63G,
             502      Chapter 3, Utah Administrative Rulemaking Act, share information gathered from returns and
             503      other written statements with the federal government, any other state, any of the political
             504      subdivisions of another state, or any political subdivision of this state, except as limited by
             505      Sections 59-12-209 and 59-12-210 , if the political subdivision, other state, or the federal
             506      government grant substantially similar privileges to this state.
             507          (c) Notwithstanding Subsection (1) and for all taxes except individual income tax and
             508      corporate franchise tax, the commission may by rule, in accordance with Title 63G, Chapter 3,
             509      Utah Administrative Rulemaking Act, provide for the issuance of information concerning the
             510      identity and other information of taxpayers who have failed to file tax returns or to pay any tax
             511      due.
             512          (d) Notwithstanding Subsection (1), the commission shall provide to the Solid and
             513      Hazardous Waste Control Board executive secretary, as defined in Section 19-6-102 , as
             514      requested by the executive secretary, any records, returns, or other information filed with the
             515      commission under Chapter 13, Motor and Special Fuel Tax Act, or Section 19-6-410.5
             516      regarding the environmental assurance program participation fee.
             517          (e) Notwithstanding Subsection (1), at the request of any person the commission shall
             518      provide that person sales and purchase volume data reported to the commission on a report,
             519      return, or other information filed with the commission under:
             520          (i) Chapter 13, Part 2, Motor Fuel; or
             521          (ii) Chapter 13, Part 4, Aviation Fuel.


             522          (f) Notwithstanding Subsection (1), upon request from a tobacco product manufacturer,
             523      as defined in Section 59-22-202 , the commission shall report to the manufacturer:
             524          (i) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the
             525      manufacturer and reported to the commission for the previous calendar year under Section
             526      59-14-407 ; and
             527          (ii) the quantity of cigarettes, as defined in Section 59-22-202 , produced by the
             528      manufacturer for which a tax refund was granted during the previous calendar year under
             529      Section 59-14-401 and reported to the commission under Subsection 59-14-401 (1)(a)(v).
             530          (g) Notwithstanding Subsection (1), the commission shall notify manufacturers,
             531      distributors, wholesalers, and retail dealers of a tobacco product manufacturer that is prohibited
             532      from selling cigarettes to consumers within the state under Subsection 59-14-210 (2).
             533          (h) Notwithstanding Subsection (1), the commission may:
             534          (i) provide to the Division of Consumer Protection within the Department of
             535      Commerce and the attorney general data:
             536          (A) reported to the commission under Section 59-14-212 ; or
             537          (B) related to a violation under Section 59-14-211 ; and
             538          (ii) upon request provide to any person data reported to the commission under
             539      Subsections 59-14-212 (1)(a) through (c) and Subsection 59-14-212 (1)(g).
             540          (i) Notwithstanding Subsection (1), the commission shall, at the request of a committee
             541      of the Legislature, Office of the Legislative Fiscal Analyst, or Governor's Office of Planning
             542      and Budget, provide to the committee or office the total amount of revenues collected by the
             543      commission under Chapter 24, Radioactive Waste Facility Tax Act, for the time period
             544      specified by the committee or office.
             545          (j) Notwithstanding Subsection (1), the commission shall make the directory required
             546      by Section 59-14-603 available for public inspection.
             547          (k) Notwithstanding Subsection (1), the commission may share information with
             548      federal, state, or local agencies as provided in Subsection 59-14-606 (3).
             549          (l) (i) Notwithstanding Subsection (1), the commission shall provide the Office of
             550      Recovery Services within the Department of Human Services any relevant information
             551      obtained from a return filed under Chapter 10, Individual Income Tax Act, regarding a taxpayer
             552      who has become obligated to the Office of Recovery Services.


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


             584          (I) a fiscal estimate;
             585          (II) fiscal note information; or
             586          (III) statistical information; and
             587          (B) if the information is classified to prevent the identification of a particular return.
             588          (v) (A) A person may not request information from an office under Title 63G, Chapter
             589      2, Government Records Access and Management Act, or this section, if that office received the
             590      information from the commission in accordance with this Subsection (3)(o).
             591          (B) An office may not provide to a person that requests information in accordance with
             592      Subsection (3)(o)(v)(A) any information other than the information the office provides in
             593      accordance with Subsection (3)(o)(iv).
             594          (p) Notwithstanding Subsection (1), the commission may provide to the governing
             595      board of the agreement or a taxing official of another state, the District of Columbia, the United
             596      States, or a territory of the United States:
             597          (i) the following relating to an agreement sales and use tax:
             598          (A) information contained in a return filed with the commission;
             599          (B) information contained in a report filed with the commission;
             600          (C) a schedule related to Subsection (3)(p)(i)(A) or (B); or
             601          (D) a document filed with the commission; or
             602          (ii) a report of an audit or investigation made with respect to an agreement sales and
             603      use tax.
             604          (q) Notwithstanding Subsection (1), the commission may provide information
             605      concerning a taxpayer's state income tax return or state income tax withholding information to
             606      the Driver License Division if the Driver License Division:
             607          (i) requests the information; and
             608          (ii) provides the commission with a signed release form from the taxpayer allowing the
             609      Driver License Division access to the information.
             610          (r) Notwithstanding Subsection (1), the commission shall provide to the Utah State 911
             611      Committee the information requested by the Utah State 911 Committee under Subsection
             612      53-10-602 (3).
             613          (s) Notwithstanding Subsection (1), the commission may provide to the Utah
             614      Educational Savings Plan [Trust] information related to a resident or nonresident individual's


             615      contribution to a Utah Educational Savings Plan account as designated on the resident or
             616      nonresident's individual income tax return under Section 59-10-1313 .
             617          (4) (a) Reports and returns shall be preserved for at least three years.
             618          (b) After the three-year period provided in Subsection (4)(a) the commission may
             619      destroy a report or return.
             620          (5) (a) Any person who violates this section is guilty of a class A misdemeanor.
             621          (b) If the person described in Subsection (5)(a) is an officer or employee of the state,
             622      the person shall be dismissed from office and be disqualified from holding public office in this
             623      state for a period of five years thereafter.
             624          (c) Notwithstanding Subsection (5)(a) or (b), an office that requests information in
             625      accordance with Subsection (3)(o)(iii) or a person that requests information in accordance with
             626      Subsection (3)(o)(v):
             627          (i) is not guilty of a class A misdemeanor; and
             628          (ii) is not subject to:
             629          (A) dismissal from office in accordance with Subsection (5)(b); or
             630          (B) disqualification from holding public office in accordance with Subsection (5)(b).
             631          (6) Except as provided in Section 59-1-404 , this part does not apply to the property tax.
             632          Section 16. Section 59-7-105 is amended to read:
             633           59-7-105. Additions to unadjusted income.
             634          In computing adjusted income the following amounts shall be added to unadjusted
             635      income:
             636          (1) interest from bonds, notes, and other evidences of indebtedness issued by any state
             637      of the United States, including any agency and instrumentality of a state of the United States;
             638          (2) the amount of any deduction taken on a corporation's federal return for taxes paid
             639      by a corporation:
             640          (a) to Utah for taxes imposed by this chapter; and
             641          (b) to another state of the United States, a foreign country, a United States possession,
             642      or the Commonwealth of Puerto Rico for taxes imposed for the privilege of doing business, or
             643      exercising its corporate franchise, including income, franchise, corporate stock and business
             644      and occupation taxes;
             645          (3) the safe harbor lease adjustment required under Subsections 59-7-111 (1)(a) and


             646      (2)(a);
             647          (4) capital losses that have been deducted on a Utah corporate return in previous years;
             648          (5) any deduction on the federal return that has been previously deducted on the Utah
             649      return;
             650          (6) the amount of contributions claimed as a tax credit pursuant to Section 59-7-602 ;
             651          (7) the amount of the deduction taken pursuant to Section 59-7-603 for sophisticated
             652      technological equipment;
             653          (8) charitable contributions, to the extent deducted on the federal return when
             654      determining federal taxable income;
             655          (9) the amount of gain or loss determined under Section 59-7-114 relating to a target
             656      corporation under Section 338, Internal Revenue Code, unless such gain or loss has already
             657      been included in the unadjusted income of the target corporation;
             658          (10) the amount of gain or loss determined under Section 59-7-115 relating to
             659      corporations treated for federal purposes as having disposed of its assets under Section 336(e),
             660      Internal Revenue Code, unless such gain or loss has already been included in the unadjusted
             661      income of the target corporation;
             662          (11) adjustments to gains, losses, depreciation expense, amortization expense, and
             663      similar items due to a difference between basis for federal purposes and basis as computed
             664      under Section 59-7-107 ;
             665          (12) the amount withdrawn under Title 53B, Chapter 8a, [Higher Education Savings
             666      Incentive Program] Utah Educational Savings Plan, from the account of a corporation that is an
             667      account owner as defined in Section 53B-8a-102 , for the taxable year for which the amount is
             668      withdrawn, if that amount withdrawn from the account of the corporation that is the account
             669      owner:
             670          (a) is not expended for:
             671          (i) higher education costs as defined in Section 53B-8a-102 ; [and] or
             672          (ii) a payment or distribution that qualifies as an exception to the additional tax for
             673      distributions not used for educational expenses provided in Sections 529(c) and 530(d),
             674      Internal Revenue Code; and
             675          (b) is subtracted by the corporation:
             676          (i) that is the account owner; and


             677          (ii) in accordance with Subsection 59-7-106 (18); and
             678          (13) the amount of the deduction for dividends paid, as defined in Section 561, Internal
             679      Revenue Code, that is allowed under Section 857(b)(2)(B), Internal Revenue Code, in
             680      computing the taxable income of a captive real estate investment trust, if that captive real estate
             681      investment trust is subject to federal income taxation.
             682          Section 17. Section 59-7-106 is amended to read:
             683           59-7-106. Subtractions from unadjusted income.
             684          In computing adjusted income the following amounts shall be subtracted from
             685      unadjusted income:
             686          (1) the foreign dividend gross-up included in gross income for federal income tax
             687      purposes under Section 78, Internal Revenue Code;
             688          (2) the net capital loss, as defined for federal purposes, if the taxpayer elects to deduct
             689      the loss on the current Utah return. The deduction shall be made by claiming the deduction on
             690      the current Utah return which shall be filed by the due date of the return, including extensions.
             691      For the purposes of this Subsection (2) all capital losses in a given year must be:
             692          (a) deducted in the year incurred; or
             693          (b) carried forward as provided in Sections 1212(a)(1)(B) and (C), Internal Revenue
             694      Code;
             695          (3) the decrease in salary expense deduction for federal income tax purposes due to
             696      claiming the federal jobs credit under Section 51, Internal Revenue Code;
             697          (4) the decrease in qualified research and basic research expense deduction for federal
             698      income tax purposes due to claiming the federal research and development credit under Section
             699      41, Internal Revenue Code;
             700          (5) the decrease in qualified clinical testing expense deduction for federal income tax
             701      purposes due to claiming the federal orphan drug credit under Section 28, Internal Revenue
             702      Code;
             703          (6) any decrease in any expense deduction for federal income tax purposes due to
             704      claiming any other federal credit;
             705          (7) the safe harbor lease adjustment required under Subsections 59-7-111 (1)(b) and
             706      (2)(b);
             707          (8) any income on the federal corporate return that has been previously taxed by Utah;


             708          (9) amounts included in federal taxable income that are due to refunds of taxes
             709      imposed for the privilege of doing business, or exercising a corporate franchise, including
             710      income, franchise, corporate stock and business and occupation taxes paid by the corporation to
             711      Utah, another state of the United States, a foreign country, a United States possession, or the
             712      Commonwealth of Puerto Rico to the extent that the taxes were added to unadjusted income
             713      under Section 59-7-105 ;
             714          (10) charitable contributions, to the extent allowed as a subtraction under Section
             715      59-7-109 ;
             716          (11) (a) 50% of the dividends deemed received or received from subsidiaries which are
             717      members of the unitary group and are organized or incorporated outside of the United States
             718      unless such subsidiaries are included in a combined report under Section 59-7-402 or 59-7-403 .
             719      In arriving at the amount of the dividend exclusion, the taxpayer shall first deduct from the
             720      dividends deemed received or received, the expense directly attributable to those dividends.
             721      Interest expense attributable to excluded dividends shall be determined by multiplying interest
             722      expense by a fraction, the numerator of which is the taxpayer's average investment in such
             723      dividend paying subsidiaries, and the denominator of which is the taxpayer's average total
             724      investment in assets;
             725          (b) in determining income apportionable to this state, a portion of the factors of a
             726      foreign subsidiary whose dividends are partially excluded under Subsection (11)(a) shall be
             727      included in the combined report factors. The portion to be included shall be determined by
             728      multiplying each factor of the foreign subsidiary by a fraction, but not to exceed 100%, the
             729      numerator of which is the amount of the dividend paid by the foreign subsidiary which is
             730      included in adjusted income, and the denominator of which is the current year earnings and
             731      profits of the foreign subsidiary as determined under the Internal Revenue Code;
             732          (12) (a) 50% of the adjusted income of a foreign operating company unless the
             733      taxpayer has elected to file a worldwide combined report as provided in Section 59-7-403 . For
             734      purposes of this Subsection (12), when calculating the adjusted income of a foreign operating
             735      company, a foreign operating company may not deduct the subtractions allowable under this
             736      Subsection (12) and Subsection (11);
             737          (b) in determining income apportionable to this state, the factors for a foreign operating
             738      company shall be included in the combined report factors in the same percentage its adjusted


             739      income is included in the combined adjusted income;
             740          (13) the amount of gain or loss which is included in unadjusted income but not
             741      recognized for federal purposes on stock sold or exchanged by a member of a selling
             742      consolidated group as defined in Section 338, Internal Revenue Code, if an election has been
             743      made pursuant to Section 338(h)(10), Internal Revenue Code;
             744          (14) the amount of gain or loss which is included in unadjusted income but not
             745      recognized for federal purposes on stock sold, exchanged, or distributed by a corporation
             746      pursuant to Section 336(e), Internal Revenue Code, if an election under Section 336(e), Internal
             747      Revenue Code, has been made for federal purposes;
             748          (15) (a) adjustments to gains, losses, depreciation expense, amortization expense, and
             749      similar items due to a difference between basis for federal purposes and basis as computed
             750      under Section 59-7-107 ; and
             751          (b) if there has been a reduction in federal basis for a federal tax credit where there is
             752      no corresponding Utah tax credit, the amount of the reduction in basis shall be allowed as an
             753      expense in the year of the federal credit;
             754          (16) any interest expense not deducted on the federal corporate return under Section
             755      265(b) or 291(e), Internal Revenue Code;
             756          (17) 100% of the dividends received from subsidiaries which are insurance companies
             757      exempt from this chapter under Subsection 59-7-102 (1)(c) and are under common ownership;
             758          (18) subject to Subsection 59-7-105 (12), the amount of a qualified investment as
             759      defined in Section 53B-8a-102 that:
             760          (a) a corporation that is an account owner as defined in Section 53B-8a-102 makes
             761      during the taxable year;
             762          (b) the corporation described in Subsection (18)(a) does not deduct on a federal
             763      corporation income tax return; and
             764          (c) does not exceed the maximum amount of the qualified investment that may be
             765      subtracted from unadjusted income for a taxable year in accordance with [Subsections]
             766      Subsection 53B-8a-106 (1)[(d) and (f)]; and
             767          (19) for purposes of income included in a combined report under Part 4, Combined
             768      Reporting, the entire amount of the dividends a member of a unitary group receives or is
             769      considered to receive from a captive real estate investment trust.


             770          Section 18. Section 59-10-114 is amended to read:
             771           59-10-114. Additions to and subtractions from adjusted gross income of an
             772      individual.
             773          (1) There shall be added to adjusted gross income of a resident or nonresident
             774      individual:
             775          (a) a lump sum distribution that the taxpayer does not include in adjusted gross income
             776      on the taxpayer's federal individual income tax return for the taxable year;
             777          (b) the amount of a child's income calculated under Subsection (4) that:
             778          (i) a parent elects to report on the parent's federal individual income tax return for the
             779      taxable year; and
             780          (ii) the parent does not include in adjusted gross income on the parent's federal
             781      individual income tax return for the taxable year;
             782          (c) (i) a withdrawal from a medical care savings account and any penalty imposed for
             783      the taxable year if:
             784          (A) the resident or nonresident individual does not deduct the amounts on the resident
             785      or nonresident individual's federal individual income tax return under Section 220, Internal
             786      Revenue Code;
             787          (B) the withdrawal is subject to Subsections 31A-32a-105 (1) and (2); and
             788          (C) the withdrawal is:
             789          (I) subtracted on a return the resident or nonresident individual files under this chapter
             790      for a taxable year beginning on or before December 31, 2007; or
             791          (II) used as the basis for a resident or nonresident individual to claim a tax credit under
             792      Section 59-10-1021 ;
             793          (ii) a disbursement required to be added to adjusted gross income in accordance with
             794      Subsection 31A-32a-105 (3); or
             795          (iii) an amount required to be added to adjusted gross income in accordance with
             796      Subsection 31A-32a-105 (5)(c);
             797          (d) the amount withdrawn under Title 53B, Chapter 8a, [Higher Education Savings
             798      Incentive Program] Utah Educational Savings Plan, from the account of a resident or
             799      nonresident individual who is an account owner as defined in Section 53B-8a-102 , for the
             800      taxable year for which the amount is withdrawn, if that amount withdrawn from the account of


             801      the resident or nonresident individual who is the account owner:
             802          (i) is not expended for:
             803          (A) higher education costs as defined in Section 53B-8a-102 ; [and] or
             804          (B) a payment or distribution that qualifies as an exception to the additional tax for
             805      distributions not used for educational expenses provided in Sections 529(c) and 530(d),
             806      Internal Revenue Code; and
             807          (ii) is:
             808          (A) subtracted by the resident or nonresident individual:
             809          (I) who is the account owner; and
             810          (II) on the resident or nonresident individual's return filed under this chapter for a
             811      taxable year beginning on or before December 31, 2007; or
             812          (B) used as the basis for the resident or nonresident individual who is the account
             813      owner to claim a tax credit under Section 59-10-1017 ;
             814          (e) except as provided in Subsection [(6)] (5), for bonds, notes, and other evidences of
             815      indebtedness acquired on or after January 1, 2003, the interest from bonds, notes, and other
             816      evidences of indebtedness issued by one or more of the following entities:
             817          (i) a state other than this state;
             818          (ii) the District of Columbia;
             819          (iii) a political subdivision of a state other than this state; or
             820          (iv) an agency or instrumentality of an entity described in Subsections (1)(e)(i) through
             821      (iii);
             822          (f) subject to Subsection (2)(c), any distribution received by a resident beneficiary of a
             823      resident trust of income that was taxed at the trust level for federal tax purposes, but was
             824      subtracted from state taxable income of the trust pursuant to Subsection 59-10-202 (2)(b);
             825          (g) any distribution received by a resident beneficiary of a nonresident trust of
             826      undistributed distributable net income realized by the trust on or after January 1, 2004, if that
             827      undistributed distributable net income was taxed at the trust level for federal tax purposes, but
             828      was not taxed at the trust level by any state, with undistributed distributable net income
             829      considered to be distributed from the most recently accumulated undistributed distributable net
             830      income; and
             831          (h) any adoption expense:


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


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


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


             925          (B) the sum of the following reported on Form 8814:
             926          (I) the child's taxable interest;
             927          (II) the child's ordinary dividends; and
             928          (III) the child's capital gain distributions; and
             929          (ii) the amount not taxed that is specified on Form 8814.
             930          (5) Notwithstanding Subsection (1)(e), interest from bonds, notes, and other evidences
             931      of indebtedness issued by an entity described in Subsections (1)(e)(i) through (iv) may not be
             932      added to adjusted gross income of a resident or nonresident individual if, as annually
             933      determined by the commission:
             934          (a) for an entity described in Subsection (1)(e)(i) or (ii), the entity and all of the
             935      political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
             936      income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
             937          (b) for an entity described in Subsection (1)(e)(iii) or (iv), the following do not impose
             938      a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of
             939      this state:
             940          (i) the entity; or
             941          (ii) (A) the state in which the entity is located; or
             942          (B) the District of Columbia, if the entity is located within the District of Columbia.
             943          Section 19. Section 59-10-201 is amended to read:
             944           59-10-201. Taxation of resident trusts and estates.
             945          (1) Except as provided in Subsection (2), a tax determined in accordance with the rate
             946      prescribed by Subsection 59-10-104 (2)(b) is imposed for each taxable year on the state taxable
             947      income of each resident estate or trust.
             948          (2) The following are not subject to a tax imposed by this part:
             949          (a) a resident estate or trust that is not required to file a federal income tax return for
             950      estates and trusts for the taxable year; or
             951          (b) a resident trust taxed as a corporation.
             952          (3) A resident estate or trust shall be allowed the credit provided in Section
             953      59-10-1003 , relating to an income tax imposed by another state, except that the limitation shall
             954      be computed by reference to the taxable income of the estate or trust.
             955          (4) The property of the Utah Educational Savings Plan [trust] established in Title 53B,


             956      Chapter 8a, [Higher Education Savings Incentive Program] Utah Educational Savings Plan, and
             957      its income from operations and investments are exempt from all taxation by the state under this
             958      chapter.
             959          Section 20. Section 59-10-202 is amended to read:
             960           59-10-202. Additions to and subtractions from unadjusted income of a resident or
             961      nonresident estate or trust.
             962          (1) There shall be added to unadjusted income of a resident or nonresident estate or
             963      trust:
             964          (a) a lump sum distribution allowable as a deduction under Section 402(d)(3), Internal
             965      Revenue Code, to the extent deductible under Section 62(a)(8), Internal Revenue Code, in
             966      determining adjusted gross income;
             967          (b) except as provided in Subsection (3), for bonds, notes, and other evidences of
             968      indebtedness acquired on or after January 1, 2003, the interest from bonds, notes, and other
             969      evidences of indebtedness issued by one or more of the following entities:
             970          (i) a state other than this state;
             971          (ii) the District of Columbia;
             972          (iii) a political subdivision of a state other than this state; or
             973          (iv) an agency or instrumentality of an entity described in Subsections (1)(b)(i) through
             974      (iii);
             975          (c) any portion of federal taxable income for a taxable year if that federal taxable
             976      income is derived from stock:
             977          (i) in an S corporation; and
             978          (ii) that is held by an electing small business trust;
             979          (d) the amount withdrawn under Title 53B, Chapter 8a, [Higher Education Savings
             980      Incentive Program] Utah Educational Savings Plan, from the account of a resident or
             981      nonresident estate or trust that is an account owner as defined in Section 53B-8a-102 , for the
             982      taxable year for which the amount is withdrawn, if that amount withdrawn from the account of
             983      the resident or nonresident estate or trust that is the account owner:
             984          (i) is not expended for:
             985          (A) higher education costs as defined in Section 53B-8a-102 ; [and] or
             986          (B) a payment or distribution that qualifies as an exception to the additional tax for


             987      distributions not used for educational expenses provided in Sections 529(c) and 530(d),
             988      Internal Revenue Code; and
             989          (ii) is:
             990          (A) subtracted by the resident or nonresident estate or trust:
             991          (I) that is the account owner; and
             992          (II) on the resident or nonresident estate's or trust's return filed under this chapter for a
             993      taxable year beginning on or before December 31, 2007; or
             994          (B) used as the basis for the resident or nonresident estate or trust that is the account
             995      owner to claim a tax credit under Section 59-10-1017 ; and
             996          (e) any fiduciary adjustments required by Section 59-10-210 .
             997          (2) There shall be subtracted from unadjusted income of a resident or nonresident
             998      estate or trust:
             999          (a) the interest or a dividend on obligations or securities of the United States and its
             1000      possessions or of any authority, commission, or instrumentality of the United States, to the
             1001      extent that interest or dividend is included in gross income for federal income tax purposes for
             1002      the taxable year but exempt from state income taxes under the laws of the United States, but
             1003      the amount subtracted under this Subsection (2) shall be reduced by any interest on
             1004      indebtedness incurred or continued to purchase or carry the obligations or securities described
             1005      in this Subsection (2), and by any expenses incurred in the production of interest or dividend
             1006      income described in this Subsection (2) to the extent that such expenses, including amortizable
             1007      bond premiums, are deductible in determining federal taxable income;
             1008          (b) income of an irrevocable resident trust if:
             1009          (i) the income would not be treated as state taxable income derived from Utah sources
             1010      under Section 59-10-204 if received by a nonresident trust;
             1011          (ii) the trust first became a resident trust on or after January 1, 2004;
             1012          (iii) no assets of the trust were held, at any time after January 1, 2003, in another
             1013      resident irrevocable trust created by the same settlor or the spouse of the same settlor;
             1014          (iv) the trustee of the trust is a trust company as defined in Subsection 7-5-1 (1)(d);
             1015          (v) the amount subtracted under this Subsection (2)(b) is reduced to the extent the
             1016      settlor or any other person is treated as an owner of any portion of the trust under Subtitle A,
             1017      Subchapter J, Subpart E of the Internal Revenue Code; and


             1018          (vi) the amount subtracted under this Subsection (2)(b) is reduced by any interest on
             1019      indebtedness incurred or continued to purchase or carry the assets generating the income
             1020      described in this Subsection (2)(b), and by any expenses incurred in the production of income
             1021      described in this Subsection (2)(b), to the extent that those expenses, including amortizable
             1022      bond premiums, are deductible in determining federal taxable income;
             1023          (c) if the conditions of Subsection (4)(a) are met, the amount of income of a resident or
             1024      nonresident estate or trust derived from a deceased Ute tribal member:
             1025          (i) during a time period that the Ute tribal member resided on homesteaded land
             1026      diminished from the Uintah and Ouray Reservation; and
             1027          (ii) from a source within the Uintah and Ouray Reservation;
             1028          (d) any amount:
             1029          (i) received by a resident or nonresident estate or trust;
             1030          (ii) that constitutes a refund of taxes imposed by:
             1031          (A) a state; or
             1032          (B) the District of Columbia; and
             1033          (iii) to the extent that amount is included in total income on that resident or nonresident
             1034      estate's or trust's federal tax return for estates and trusts for that taxable year;
             1035          (e) the amount of a railroad retirement benefit:
             1036          (i) paid:
             1037          (A) in accordance with The Railroad Retirement Act of 1974, 45 U.S.C. Sec. 231 et
             1038      seq.;
             1039          (B) to a resident or nonresident estate or trust derived from a deceased resident or
             1040      nonresident individual; and
             1041          (C) for the taxable year; and
             1042          (ii) to the extent that railroad retirement benefit is included in total income on that
             1043      resident or nonresident estate's or trust's federal tax return for estates and trusts;
             1044          (f) an amount:
             1045          (i) received by a resident or nonresident estate or trust if that amount is derived from a
             1046      deceased enrolled member of an American Indian tribe; and
             1047          (ii) to the extent that the state is not authorized or permitted to impose a tax under this
             1048      part on that amount in accordance with:


             1049          (A) federal law;
             1050          (B) a treaty; or
             1051          (C) a final decision issued by a court of competent jurisdiction;
             1052          (g) the amount that a qualified nongrantor charitable lead trust deducts under Section
             1053      642(c), Internal Revenue Code, as a charitable contribution deduction, as allowed on the
             1054      qualified nongrantor charitable lead trust's federal income tax return for estates and trusts for
             1055      the taxable year; and
             1056          (h) any fiduciary adjustments required by Section 59-10-210 .
             1057          (3) Notwithstanding Subsection (1)(b), interest from bonds, notes, and other evidences
             1058      of indebtedness issued by an entity described in Subsections (1)(b)(i) through (iv) may not be
             1059      added to unadjusted income of a resident or nonresident estate or trust if, as annually
             1060      determined by the commission:
             1061          (a) for an entity described in Subsection (1)(b)(i) or (ii), the entity and all of the
             1062      political subdivisions, agencies, or instrumentalities of the entity do not impose a tax based on
             1063      income on any part of the bonds, notes, and other evidences of indebtedness of this state; or
             1064          (b) for an entity described in Subsection (1)(b)(iii) or (iv), the following do not impose
             1065      a tax based on income on any part of the bonds, notes, and other evidences of indebtedness of
             1066      this state:
             1067          (i) the entity; or
             1068          (ii) (A) the state in which the entity is located; or
             1069          (B) the District of Columbia, if the entity is located within the District of Columbia.
             1070          (4) (a) A subtraction for an amount described in Subsection (2)(c) is allowed only if:
             1071          (i) the income is derived from a deceased Ute tribal member; and
             1072          (ii) the governor and the Ute tribe execute and maintain an agreement meeting the
             1073      requirements of this Subsection (4).
             1074          (b) The agreement described in Subsection (4)(a):
             1075          (i) may not:
             1076          (A) authorize the state to impose a tax in addition to a tax imposed under this chapter;
             1077          (B) provide a subtraction under this section greater than or different from the
             1078      subtraction described in Subsection (2)(c); or
             1079          (C) affect the power of the state to establish rates of taxation; and


             1080          (ii) shall:
             1081          (A) provide for the implementation of the subtraction described in Subsection (2)(c);
             1082          (B) be in writing;
             1083          (C) be signed by:
             1084          (I) the governor; and
             1085          (II) the chair of the Business Committee of the Ute tribe;
             1086          (D) be conditioned on obtaining any approval required by federal law; and
             1087          (E) state the effective date of the agreement.
             1088          (c) (i) The governor shall report to the commission by no later than February 1 of each
             1089      year regarding whether or not an agreement meeting the requirements of this Subsection (4) is
             1090      in effect.
             1091          (ii) If an agreement meeting the requirements of this Subsection (4) is terminated, the
             1092      subtraction permitted under Subsection (2)(c) is not allowed for taxable years beginning on or
             1093      after the January 1 following the termination of the agreement.
             1094          (d) For purposes of Subsection (2)(c) and in accordance with Title 63G, Chapter 3,
             1095      Utah Administrative Rulemaking Act, the commission may make rules:
             1096          (i) for determining whether income is derived from a source within the Uintah and
             1097      Ouray Reservation; and
             1098          (ii) that are substantially similar to how adjusted gross income derived from Utah
             1099      sources is determined under Section 59-10-117 .
             1100          Section 21. Section 59-10-1017 is amended to read:
             1101           59-10-1017. Utah Educational Savings Plan tax credit.
             1102          (1) As used in this section:
             1103          (a) "Account owner" is as defined in Section 53B-8a-102 .
             1104          (b) "Higher education costs" is as defined in Section 53B-8a-102 .
             1105          (c) "Maximum amount of a qualified investment for the taxable year" means, for a
             1106      taxable year:
             1107          (i) for a claimant, estate, or trust that is an account owner, if that claimant, estate, or
             1108      trust is other than husband and wife account owners who file a single return jointly, the
             1109      maximum amount of a qualified investment:
             1110          (A) listed in Subsection 53B-8a-106 (1)(e)(ii); and


             1111          (B) increased or [decreased] kept for that taxable year in accordance with [Subsection]
             1112      Subsections 53B-8a-106 (1)(f) and (g); or
             1113          (ii) for claimants who are husband and wife account owners who file a single return
             1114      jointly, the maximum amount of a qualified investment:
             1115          (A) listed in Subsection 53B-8a-106 (1)(e)(iii); and
             1116          (B) increased or [decreased] kept for that taxable year in accordance with [Subsection]
             1117      Subsections 53B-8a-106 (1)(f) and (g).
             1118          (d) "Qualified investment" is as defined in Section 53B-8a-102 .
             1119          (2) Except as provided in Section 59-10-1002.2 , a claimant, estate, or trust that is an
             1120      account owner may claim a nonrefundable tax credit equal to the product of:
             1121          (a) the lesser of:
             1122          (i) the amount of a qualified investment the claimant, estate, or trust:
             1123          (A) makes during the taxable year; and
             1124          (B) does not deduct:
             1125          (I) for a claimant, on the claimant's federal individual income tax return; or
             1126          (II) for an estate or trust, on the estate's or trust's federal income tax return for estates
             1127      and trusts; or
             1128          (ii) the maximum amount of a qualified investment for the taxable year if the amount
             1129      described in Subsection (2)(a)(i) is greater than the maximum amount of a qualified investment
             1130      for the taxable year; and
             1131          (b) 5%.
             1132          (3) A tax credit under this section may not be carried forward or carried back.
             1133          Section 22. Section 59-10-1313 is amended to read:
             1134           59-10-1313. Contribution to a Utah Educational Savings Plan account.
             1135          (1) (a) If a resident or nonresident individual is owed an individual income tax refund
             1136      for the taxable year, the individual may designate on the resident or nonresident individual's
             1137      income tax return a contribution to a Utah Educational Savings Plan account established under
             1138      Title 53B, Chapter 8a, [Higher Education Savings Incentive Program] Utah Educational
             1139      Savings Plan, in the amount of the entire individual income tax refund.
             1140          (b) If a resident or nonresident individual is not owed an individual income tax refund
             1141      for the taxable year, the individual may not designate on the resident or nonresident's individual


             1142      income tax return a contribution to a Utah Educational Savings Plan account.
             1143          (2) The commission shall send the contribution to the Utah Educational Savings Plan
             1144      [Trust] along with information requested by the Utah Educational Savings Plan [Trust],
             1145      including the taxpayer's name, Social Security number, and address.
             1146          (3) (a) If the taxpayer owns a Utah Educational Savings Plan account, the Utah
             1147      Educational Savings Plan [Trust] shall deposit the contribution into the account.
             1148          (b) If the taxpayer owns more than one Utah Educational Savings Plan account, the
             1149      Utah Educational Savings Plan [Trust] shall allocate the contribution among the accounts in
             1150      equal amounts.
             1151          (c) (i) If the taxpayer does not own a Utah Educational Savings Plan account, the Utah
             1152      Educational Savings Plan [Trust] shall send the taxpayer an account agreement.
             1153          (ii) If the taxpayer does not sign and return the account agreement by the date specified
             1154      by the Utah Educational Savings Plan [Trust], the Utah Educational Savings Plan [Trust] shall
             1155      return the contribution to the taxpayer without any interest or earnings.
             1156          (4) For the purpose of determining interest on an overpayment or refund under Section
             1157      59-1-402 , no interest accrues after the commission sends the contribution to the Utah
             1158      Educational Savings Plan [Trust].
             1159          Section 23. Section 63G-2-305 is amended to read:
             1160           63G-2-305. Protected records.
             1161          The following records are protected if properly classified by a governmental entity:
             1162          (1) trade secrets as defined in Section 13-24-2 if the person submitting the trade secret
             1163      has provided the governmental entity with the information specified in Section 63G-2-309 ;
             1164          (2) commercial information or nonindividual financial information obtained from a
             1165      person if:
             1166          (a) disclosure of the information could reasonably be expected to result in unfair
             1167      competitive injury to the person submitting the information or would impair the ability of the
             1168      governmental entity to obtain necessary information in the future;
             1169          (b) the person submitting the information has a greater interest in prohibiting access
             1170      than the public in obtaining access; and
             1171          (c) the person submitting the information has provided the governmental entity with
             1172      the information specified in Section 63G-2-309 ;


             1173          (3) commercial or financial information acquired or prepared by a governmental entity
             1174      to the extent that disclosure would lead to financial speculations in currencies, securities, or
             1175      commodities that will interfere with a planned transaction by the governmental entity or cause
             1176      substantial financial injury to the governmental entity or state economy;
             1177          (4) records the disclosure of which could cause commercial injury to, or confer a
             1178      competitive advantage upon a potential or actual competitor of, a commercial project entity as
             1179      defined in Subsection 11-13-103 (4);
             1180          (5) test questions and answers to be used in future license, certification, registration,
             1181      employment, or academic examinations;
             1182          (6) records the disclosure of which would impair governmental procurement
             1183      proceedings or give an unfair advantage to any person proposing to enter into a contract or
             1184      agreement with a governmental entity, except, subject to Subsections (1) and (2), that this
             1185      Subsection (6) does not restrict the right of a person to have access to, once the contract or
             1186      grant has been awarded, a bid, proposal, or application submitted to or by a governmental
             1187      entity in response to:
             1188          (a) a request for bids;
             1189          (b) a request for proposals;
             1190          (c) a grant; or
             1191          (d) other similar document;
             1192          (7) records that would identify real property or the appraisal or estimated value of real
             1193      or personal property, including intellectual property, under consideration for public acquisition
             1194      before any rights to the property are acquired unless:
             1195          (a) public interest in obtaining access to the information outweighs the governmental
             1196      entity's need to acquire the property on the best terms possible;
             1197          (b) the information has already been disclosed to persons not employed by or under a
             1198      duty of confidentiality to the entity;
             1199          (c) in the case of records that would identify property, potential sellers of the described
             1200      property have already learned of the governmental entity's plans to acquire the property;
             1201          (d) in the case of records that would identify the appraisal or estimated value of
             1202      property, the potential sellers have already learned of the governmental entity's estimated value
             1203      of the property; or


             1204          (e) the property under consideration for public acquisition is a single family residence
             1205      and the governmental entity seeking to acquire the property has initiated negotiations to acquire
             1206      the property as required under Section 78B-6-505 ;
             1207          (8) records prepared in contemplation of sale, exchange, lease, rental, or other
             1208      compensated transaction of real or personal property including intellectual property, which, if
             1209      disclosed prior to completion of the transaction, would reveal the appraisal or estimated value
             1210      of the subject property, unless:
             1211          (a) the public interest in access outweighs the interests in restricting access, including
             1212      the governmental entity's interest in maximizing the financial benefit of the transaction; or
             1213          (b) when prepared by or on behalf of a governmental entity, appraisals or estimates of
             1214      the value of the subject property have already been disclosed to persons not employed by or
             1215      under a duty of confidentiality to the entity;
             1216          (9) records created or maintained for civil, criminal, or administrative enforcement
             1217      purposes or audit purposes, or for discipline, licensing, certification, or registration purposes, if
             1218      release of the records:
             1219          (a) reasonably could be expected to interfere with investigations undertaken for
             1220      enforcement, discipline, licensing, certification, or registration purposes;
             1221          (b) reasonably could be expected to interfere with audits, disciplinary, or enforcement
             1222      proceedings;
             1223          (c) would create a danger of depriving a person of a right to a fair trial or impartial
             1224      hearing;
             1225          (d) reasonably could be expected to disclose the identity of a source who is not
             1226      generally known outside of government and, in the case of a record compiled in the course of
             1227      an investigation, disclose information furnished by a source not generally known outside of
             1228      government if disclosure would compromise the source; or
             1229          (e) reasonably could be expected to disclose investigative or audit techniques,
             1230      procedures, policies, or orders not generally known outside of government if disclosure would
             1231      interfere with enforcement or audit efforts;
             1232          (10) records the disclosure of which would jeopardize the life or safety of an
             1233      individual;
             1234          (11) records the disclosure of which would jeopardize the security of governmental


             1235      property, governmental programs, or governmental recordkeeping systems from damage, theft,
             1236      or other appropriation or use contrary to law or public policy;
             1237          (12) records that, if disclosed, would jeopardize the security or safety of a correctional
             1238      facility, or records relating to incarceration, treatment, probation, or parole, that would interfere
             1239      with the control and supervision of an offender's incarceration, treatment, probation, or parole;
             1240          (13) records that, if disclosed, would reveal recommendations made to the Board of
             1241      Pardons and Parole by an employee of or contractor for the Department of Corrections, the
             1242      Board of Pardons and Parole, or the Department of Human Services that are based on the
             1243      employee's or contractor's supervision, diagnosis, or treatment of any person within the board's
             1244      jurisdiction;
             1245          (14) records and audit workpapers that identify audit, collection, and operational
             1246      procedures and methods used by the State Tax Commission, if disclosure would interfere with
             1247      audits or collections;
             1248          (15) records of a governmental audit agency relating to an ongoing or planned audit
             1249      until the final audit is released;
             1250          (16) records prepared by or on behalf of a governmental entity solely in anticipation of
             1251      litigation that are not available under the rules of discovery;
             1252          (17) records disclosing an attorney's work product, including the mental impressions or
             1253      legal theories of an attorney or other representative of a governmental entity concerning
             1254      litigation;
             1255          (18) records of communications between a governmental entity and an attorney
             1256      representing, retained, or employed by the governmental entity if the communications would be
             1257      privileged as provided in Section 78B-1-137 ;
             1258          (19) (a) (i) personal files of a state legislator, including personal correspondence to or
             1259      from a member of the Legislature; and
             1260          (ii) notwithstanding Subsection (19)(a)(i), correspondence that gives notice of
             1261      legislative action or policy may not be classified as protected under this section; and
             1262          (b) (i) an internal communication that is part of the deliberative process in connection
             1263      with the preparation of legislation between:
             1264          (A) members of a legislative body;
             1265          (B) a member of a legislative body and a member of the legislative body's staff; or


             1266          (C) members of a legislative body's staff; and
             1267          (ii) notwithstanding Subsection (19)(b)(i), a communication that gives notice of
             1268      legislative action or policy may not be classified as protected under this section;
             1269          (20) (a) records in the custody or control of the Office of Legislative Research and
             1270      General Counsel, that, if disclosed, would reveal a particular legislator's contemplated
             1271      legislation or contemplated course of action before the legislator has elected to support the
             1272      legislation or course of action, or made the legislation or course of action public; and
             1273          (b) notwithstanding Subsection (20)(a), the form to request legislation submitted to the
             1274      Office of Legislative Research and General Counsel is a public document unless a legislator
             1275      asks that the records requesting the legislation be maintained as protected records until such
             1276      time as the legislator elects to make the legislation or course of action public;
             1277          (21) research requests from legislators to the Office of Legislative Research and
             1278      General Counsel or the Office of the Legislative Fiscal Analyst and research findings prepared
             1279      in response to these requests;
             1280          (22) drafts, unless otherwise classified as public;
             1281          (23) records concerning a governmental entity's strategy about collective bargaining or
             1282      pending litigation;
             1283          (24) records of investigations of loss occurrences and analyses of loss occurrences that
             1284      may be covered by the Risk Management Fund, the Employers' Reinsurance Fund, the
             1285      Uninsured Employers' Fund, or similar divisions in other governmental entities;
             1286          (25) records, other than personnel evaluations, that contain a personal recommendation
             1287      concerning an individual if disclosure would constitute a clearly unwarranted invasion of
             1288      personal privacy, or disclosure is not in the public interest;
             1289          (26) records that reveal the location of historic, prehistoric, paleontological, or
             1290      biological resources that if known would jeopardize the security of those resources or of
             1291      valuable historic, scientific, educational, or cultural information;
             1292          (27) records of independent state agencies if the disclosure of the records would
             1293      conflict with the fiduciary obligations of the agency;
             1294          (28) records of an institution within the state system of higher education defined in
             1295      Section 53B-1-102 regarding tenure evaluations, appointments, applications for admissions,
             1296      retention decisions, and promotions, which could be properly discussed in a meeting closed in


             1297      accordance with Title 52, Chapter 4, Open and Public Meetings Act, provided that records of
             1298      the final decisions about tenure, appointments, retention, promotions, or those students
             1299      admitted, may not be classified as protected under this section;
             1300          (29) records of the governor's office, including budget recommendations, legislative
             1301      proposals, and policy statements, that if disclosed would reveal the governor's contemplated
             1302      policies or contemplated courses of action before the governor has implemented or rejected
             1303      those policies or courses of action or made them public;
             1304          (30) records of the Office of the Legislative Fiscal Analyst relating to budget analysis,
             1305      revenue estimates, and fiscal notes of proposed legislation before issuance of the final
             1306      recommendations in these areas;
             1307          (31) records provided by the United States or by a government entity outside the state
             1308      that are given to the governmental entity with a requirement that they be managed as protected
             1309      records if the providing entity certifies that the record would not be subject to public disclosure
             1310      if retained by it;
             1311          (32) transcripts, minutes, or reports of the closed portion of a meeting of a public body
             1312      except as provided in Section 52-4-206 ;
             1313          (33) records that would reveal the contents of settlement negotiations but not including
             1314      final settlements or empirical data to the extent that they are not otherwise exempt from
             1315      disclosure;
             1316          (34) memoranda prepared by staff and used in the decision-making process by an
             1317      administrative law judge, a member of the Board of Pardons and Parole, or a member of any
             1318      other body charged by law with performing a quasi-judicial function;
             1319          (35) records that would reveal negotiations regarding assistance or incentives offered
             1320      by or requested from a governmental entity for the purpose of encouraging a person to expand
             1321      or locate a business in Utah, but only if disclosure would result in actual economic harm to the
             1322      person or place the governmental entity at a competitive disadvantage, but this section may not
             1323      be used to restrict access to a record evidencing a final contract;
             1324          (36) materials to which access must be limited for purposes of securing or maintaining
             1325      the governmental entity's proprietary protection of intellectual property rights including patents,
             1326      copyrights, and trade secrets;
             1327          (37) the name of a donor or a prospective donor to a governmental entity, including an


             1328      institution within the state system of higher education defined in Section 53B-1-102 , and other
             1329      information concerning the donation that could reasonably be expected to reveal the identity of
             1330      the donor, provided that:
             1331          (a) the donor requests anonymity in writing;
             1332          (b) any terms, conditions, restrictions, or privileges relating to the donation may not be
             1333      classified protected by the governmental entity under this Subsection (37); and
             1334          (c) except for an institution within the state system of higher education defined in
             1335      Section 53B-1-102 , the governmental unit to which the donation is made is primarily engaged
             1336      in educational, charitable, or artistic endeavors, and has no regulatory or legislative authority
             1337      over the donor, a member of the donor's immediate family, or any entity owned or controlled
             1338      by the donor or the donor's immediate family;
             1339          (38) accident reports, except as provided in Sections 41-6a-404 , 41-12a-202 , and
             1340      73-18-13 ;
             1341          (39) a notification of workers' compensation insurance coverage described in Section
             1342      34A-2-205 ;
             1343          (40) (a) the following records of an institution within the state system of higher
             1344      education defined in Section 53B-1-102 , which have been developed, discovered, disclosed to,
             1345      or received by or on behalf of faculty, staff, employees, or students of the institution:
             1346          (i) unpublished lecture notes;
             1347          (ii) unpublished notes, data, and information:
             1348          (A) relating to research; and
             1349          (B) of:
             1350          (I) the institution within the state system of higher education defined in Section
             1351      53B-1-102 ; or
             1352          (II) a sponsor of sponsored research;
             1353          (iii) unpublished manuscripts;
             1354          (iv) creative works in process;
             1355          (v) scholarly correspondence; and
             1356          (vi) confidential information contained in research proposals;
             1357          (b) Subsection (40)(a) may not be construed to prohibit disclosure of public
             1358      information required pursuant to Subsection 53B-16-302 (2)(a) or (b); and


             1359          (c) Subsection (40)(a) may not be construed to affect the ownership of a record;
             1360          (41) (a) records in the custody or control of the Office of Legislative Auditor General
             1361      that would reveal the name of a particular legislator who requests a legislative audit prior to the
             1362      date that audit is completed and made public; and
             1363          (b) notwithstanding Subsection (41)(a), a request for a legislative audit submitted to the
             1364      Office of the Legislative Auditor General is a public document unless the legislator asks that
             1365      the records in the custody or control of the Office of Legislative Auditor General that would
             1366      reveal the name of a particular legislator who requests a legislative audit be maintained as
             1367      protected records until the audit is completed and made public;
             1368          (42) records that provide detail as to the location of an explosive, including a map or
             1369      other document that indicates the location of:
             1370          (a) a production facility; or
             1371          (b) a magazine;
             1372          (43) information:
             1373          (a) contained in the statewide database of the Division of Aging and Adult Services
             1374      created by Section 62A-3-311.1 ; or
             1375          (b) received or maintained in relation to the Identity Theft Reporting Information
             1376      System (IRIS) established under Section 67-5-22 ;
             1377          (44) information contained in the Management Information System and Licensing
             1378      Information System described in Title 62A, Chapter 4a, Child and Family Services;
             1379          (45) information regarding National Guard operations or activities in support of the
             1380      National Guard's federal mission;
             1381          (46) records provided by any pawn or secondhand business to a law enforcement
             1382      agency or to the central database in compliance with Title 13, Chapter 32a, Pawnshop and
             1383      Secondhand Merchandise Transaction Information Act;
             1384          (47) information regarding food security, risk, and vulnerability assessments performed
             1385      by the Department of Agriculture and Food;
             1386          (48) except to the extent that the record is exempt from this chapter pursuant to Section
             1387      63G-2-106 , records related to an emergency plan or program prepared or maintained by the
             1388      Division of Homeland Security the disclosure of which would jeopardize:
             1389          (a) the safety of the general public; or


             1390          (b) the security of:
             1391          (i) governmental property;
             1392          (ii) governmental programs; or
             1393          (iii) the property of a private person who provides the Division of Homeland Security
             1394      information;
             1395          (49) records of the Department of Agriculture and Food relating to the National
             1396      Animal Identification System or any other program that provides for the identification, tracing,
             1397      or control of livestock diseases, including any program established under Title 4, Chapter 24,
             1398      Utah Livestock Brand and Anti-theft Act or Title 4, Chapter 31, Livestock Inspection and
             1399      Quarantine;
             1400          (50) as provided in Section 26-39-501 :
             1401          (a) information or records held by the Department of Health related to a complaint
             1402      regarding a child care program or residential child care which the department is unable to
             1403      substantiate; and
             1404          (b) information or records related to a complaint received by the Department of Health
             1405      from an anonymous complainant regarding a child care program or residential child care;
             1406          (51) unless otherwise classified as public under Section 63G-2-301 and except as
             1407      provided under Section 41-1a-116 , an individual's home address, home telephone number, or
             1408      personal mobile phone number, if:
             1409          (a) the individual is required to provide the information in order to comply with a law,
             1410      ordinance, rule, or order of a government entity; and
             1411          (b) the subject of the record has a reasonable expectation that this information will be
             1412      kept confidential due to:
             1413          (i) the nature of the law, ordinance, rule, or order; and
             1414          (ii) the individual complying with the law, ordinance, rule, or order;
             1415          (52) the name, home address, work addresses, and telephone numbers of an individual
             1416      that is engaged in, or that provides goods or services for, medical or scientific research that is:
             1417          (a) conducted within the state system of higher education, as defined in Section
             1418      53B-1-102 ; and
             1419          (b) conducted using animals;
             1420          (53) an initial proposal under Title 63M, Chapter 1, Part 26, Government Procurement


             1421      Private Proposal Program, to the extent not made public by rules made under that chapter;
             1422          (54) information collected and a report prepared by the Judicial Performance
             1423      Evaluation Commission concerning a judge, unless Section 20A-7-702 or Title 78A, Chapter
             1424      12, Judicial Performance Evaluation Commission Act, requires disclosure of, or makes public,
             1425      the information or report;
             1426          (55) (a) records of the Utah Educational Savings Plan [Trust] created under Section
             1427      53B-8a-103 if the disclosure of the records would conflict with its fiduciary obligations;
             1428          (b) proposals submitted to the Utah Educational Savings Plan [Trust]; and
             1429          (c) contracts entered into by the Utah Educational Savings Plan [Trust] and the related
             1430      payments;
             1431          (56) records contained in the Management Information System created in Section
             1432      62A-4a-1003 ;
             1433          (57) records provided or received by the Public Lands Policy Coordinating Office in
             1434      furtherance of any contract or other agreement made in accordance with Section 63J-4-603 ; and
             1435          (58) information requested by and provided to the Utah State 911 Committee under
             1436      Section 53-10-602 .
             1437          Section 24. Effective date.
             1438          If approved by two-thirds of all the members elected to each house, this bill takes effect
             1439      upon approval by the governor, or the day following the constitutional time limit of Utah
             1440      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
             1441      the date of veto override.


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