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H.B. 291

             1     

CONSOLIDATION OF INSURANCE DEPARTMENT INTO

             2     
THE DEPARTMENT OF COMMERCE

             3     
2011 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Wayne A. Harper

             6     
Senate Sponsor: ____________

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies provisions related to commerce and insurance to merge the Utah
             11      Insurance Department into the Department of Commerce, including providing for a
             12      transition.
             13      Highlighted Provisions:
             14          This bill:
             15          .    modifies definitions;
             16          .    creates the Division of Insurance within the Department of Commerce, including:
             17              .    providing for a transition;
             18              .    providing for the appointment of a commissioner by the executive director;
             19              .    addressing staff; and
             20              .    addressing money collected under the Insurance Code; and
             21          .    makes technical and conforming amendments.
             22      Money Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          This bill provides an effective date.
             26          This bill provides revisor instructions.
             27      Utah Code Sections Affected:


             28      AMENDS:
             29          7-1-104, as last amended by Laws of Utah 2009, Chapter 356
             30          7-1-1006, as last amended by Laws of Utah 2010, Chapter 65
             31          7-5-1, as last amended by Laws of Utah 2003, Chapter 301
             32          13-1-2, as last amended by Laws of Utah 2010, Chapter 278
             33          17B-2a-818.5, as last amended by Laws of Utah 2010, Chapter 229
             34          19-1-206, as last amended by Laws of Utah 2010, Chapters 218 and 229
             35          26-1-37, as last amended by Laws of Utah 2010, Chapter 68
             36          26-18-14, as enacted by Laws of Utah 2008, Chapter 383
             37          26-33a-106.1, as last amended by Laws of Utah 2010, Chapter 68
             38          26-45-104, as enacted by Laws of Utah 2002, Chapter 120
             39          31A-1-301, as last amended by Laws of Utah 2010, Chapter 10
             40          34A-2-103, as last amended by Laws of Utah 2008, Chapters 250, 263, and 318
             41          34A-2-107, as last amended by Laws of Utah 2010, Chapter 286
             42          34A-2-202, as last amended by Laws of Utah 2009, Chapter 212
             43          35A-1-104.5, as enacted by Laws of Utah 2008, Chapter 383
             44          35A-4-312, as last amended by Laws of Utah 2009, Chapter 349
             45          36-12-5, as last amended by Laws of Utah 2008, Chapter 142
             46          41-3-201, as last amended by Laws of Utah 2010, Chapter 393
             47          49-20-405, as renumbered and amended by Laws of Utah 2002, Chapter 250
             48          58-9-302, as last amended by Laws of Utah 2009, Chapter 183
             49          58-9-701, as last amended by Laws of Utah 2008, Chapter 382
             50          58-56-17, as last amended by Laws of Utah 2009, Chapter 72
             51          59-9-105, as last amended by Laws of Utah 2002, Chapter 308
             52          59-10-1023, as enacted by Laws of Utah 2008, Chapter 389
             53          63A-5-205, as last amended by Laws of Utah 2010, Chapter 229
             54          63C-6-101, as last amended by Laws of Utah 2007, Chapter 66
             55          63C-9-403, as last amended by Laws of Utah 2010, Chapter 229
             56          63G-2-302, as last amended by Laws of Utah 2010, Chapters 36 and 379
             57          63J-1-201, as last amended by Laws of Utah 2010, Chapter 415
             58          63K-1-102, as last amended by Laws of Utah 2010, Chapter 334


             59          63M-1-2503, as enacted by Laws of Utah 2008, Chapter 383
             60          63M-1-2504, as last amended by Laws of Utah 2010, Chapter 68
             61          63M-1-2506, as last amended by Laws of Utah 2010, Chapter 68
             62          67-19-6.7, as last amended by Laws of Utah 2010, Chapter 249
             63          67-19c-101, as last amended by Laws of Utah 2006, Chapter 139
             64          67-22-2, as last amended by Laws of Utah 2009, Chapter 369
             65          70C-6-105, as enacted by Laws of Utah 1985, Chapter 159
             66          70C-6-106, as enacted by Laws of Utah 1985, Chapter 159
             67          70C-6-203, as last amended by Laws of Utah 2004, Chapter 90
             68          72-6-107.5, as last amended by Laws of Utah 2010, Chapter 229
             69          76-6-521, as last amended by Laws of Utah 2004, Chapter 104
             70          76-10-915, as last amended by Laws of Utah 2010, Chapter 154
             71          77-20-5, as last amended by Laws of Utah 1998, Chapter 293
             72          78B-3-403, as last amended by Laws of Utah 2009, Chapter 220
             73          78B-3-413, as last amended by Laws of Utah 2009, Chapter 146
             74          79-2-404, as last amended by Laws of Utah 2010, Chapter 229
             75      ENACTS:
             76          31A-2a-101, Utah Code Annotated 1953
             77          31A-2a-102, Utah Code Annotated 1953
             78          31A-2a-103, Utah Code Annotated 1953
             79          31A-2a-201, Utah Code Annotated 1953
             80          31A-2a-202, Utah Code Annotated 1953
             81          31A-2a-203, Utah Code Annotated 1953
             82          31A-2a-204, Utah Code Annotated 1953
             83      REPEALS:
             84          31A-2-102, as last amended by Laws of Utah 2002, Chapter 176
             85          31A-2-103, as last amended by Laws of Utah 1994, Chapter 128
             86          31A-2-105, as last amended by Laws of Utah 1993, Chapter 305
             87     
             88      Be it enacted by the Legislature of the state of Utah:
             89          Section 1. Section 7-1-104 is amended to read:


             90           7-1-104. Exemptions from application of title.
             91          (1) This title does not apply to:
             92          (a) investment companies registered under the Investment Company Act of 1940, 15
             93      U.S.C. Sec. 80a-1 et seq.;
             94          (b) securities brokers and dealers registered pursuant to:
             95          (i) Title 61, Chapter 1, Utah Uniform Securities Act; or
             96          (ii) the federal Securities Exchange Act of 1934, 15 U.S.C. Sec. 78a et seq.;
             97          (c) depository or other institutions performing transaction account services, including
             98      third party transactions, in connection with:
             99          (i) the purchase and redemption of investment company shares; or
             100          (ii) access to a margin or cash securities account maintained by a person identified in
             101      Subsection (1)(b); or
             102          (d) insurance companies selling interests in an investment company or "separate
             103      account" and subject to regulation by the [Utah Insurance Department] Department of
             104      Commerce under Title 31A, Insurance Code, which may delegate this function to the Division
             105      of Insurance.
             106          (2) (a) An institution, organization, or person is not exempt from this title if, within
             107      this state, it holds itself out to the public as receiving and holding deposits from residents of
             108      this state, whether evidenced by a certificate, promissory note, or otherwise.
             109          (b) An investment company is not exempt from this title unless the investment
             110      company is registered with the United States Securities and Exchange Commission under the
             111      Investment Company Act of 1940, 15 U.S.C. Sec. 80a-1 et seq., and is advised by an
             112      investment adviser:
             113          (i) which is registered with the United States Securities and Exchange Commission
             114      under the Investment Advisers Act of 1940, 15 U.S.C. Sec. 80b-1 et seq.; and
             115          (ii) which advises investment companies and other accounts with a combined value of
             116      at least $50,000,000.
             117          Section 2. Section 7-1-1006 is amended to read:
             118           7-1-1006. Inapplicable to certain official investigations.
             119          (1) Sections 7-1-1002 and 7-1-1003 do not apply if an examination of a record is a part
             120      of an official investigation by:


             121          (a) local police;
             122          (b) a sheriff;
             123          (c) a peace officer;
             124          (d) a city attorney;
             125          (e) a county attorney;
             126          (f) a district attorney;
             127          (g) the attorney general;
             128          (h) the Department of Public Safety;
             129          (i) the Office of Recovery Services of the Department of Human Services;
             130          [(j) the Insurance Department;]
             131          [(k)] (j) the Department of Commerce;
             132          [(l)] (k) the Benefit Payment Control Unit or the Payment Error Prevention Unit of the
             133      Department of Workforce Services;
             134          [(m)] (l) the state auditor; or
             135          [(n)] (m) the State Tax Commission.
             136          (2) Except for the Office of Recovery Services, if a governmental entity listed in
             137      Subsection (1) seeks a record, the entity shall obtain the record as follows:
             138          (a) if the record is a nonprotected record, by request in writing that:
             139          (i) certifies that an official investigation is being conducted; and
             140          (ii) is signed by a representative of the governmental entity that is conducting the
             141      official investigation; or
             142          (b) if the record is a protected record, by obtaining:
             143          (i) a subpoena authorized by statute;
             144          (ii) other legal process:
             145          (A) ordered by a court of competent jurisdiction; and
             146          (B) served upon the financial institution; or
             147          (iii) written permission from all account holders of the account referenced in the record
             148      to be examined.
             149          (3) If the Office of Recovery Services seeks a record, the Office of Recovery Services
             150      shall obtain the record pursuant to:
             151          (a) Subsection 62A-11-104 (1)(g);


             152          (b) Section 62A-11-304.1 ;
             153          (c) Section 62A-11-304.5 ; or
             154          (d) Title IV, Part D of the Social Security Act as codified in 42 U.S.C. Sec. 651 et seq.
             155          (4) A financial institution may not give notice to an account holder or person named or
             156      referenced within the record disclosed pursuant to Subsection (2)(a).
             157          (5) In accordance with Section 7-1-1004 , the governmental entity conducting the
             158      official investigation that obtains a record from a financial institution under this section shall
             159      reimburse the financial institution for costs reasonably and directly incurred by the financial
             160      institution.
             161          Section 3. Section 7-5-1 is amended to read:
             162           7-5-1. Definitions -- Allowable trust companies -- Exceptions.
             163          (1) As used in this chapter:
             164          (a) "Business trust" means an entity engaged in a trade or business that is created by a
             165      declaration of trust that transfers property to trustees, to be held and managed by them for the
             166      benefit of persons holding certificates representing the beneficial interest in the trust estate and
             167      assets.
             168          (b) "Trust business" means, except as provided in Subsection (1)(c), a business in
             169      which one acts in any agency or fiduciary capacity, including that of personal representative,
             170      executor, administrator, conservator, guardian, assignee, receiver, depositary, or trustee under
             171      appointment as trustee for any purpose permitted by law, including the definition of "trust" set
             172      forth in [Subsection] Section 75-1-201 [(53)].
             173          (c) "Trust business" does not include the following means of holding funds, assets, or
             174      other property:
             175          (i) funds held in a client trust account by an attorney authorized to practice law in this
             176      state;
             177          (ii) funds held in connection with the purchase or sale of real estate by a person
             178      authorized to act as a real estate broker in this state;
             179          (iii) funds or other assets held in escrow by a person authorized by the department in
             180      accordance with Chapter 22, Regulation of Independent Escrow Agents, or by the [Utah
             181      Insurance Department] Department of Commerce under Title 31A, Insurance Code, which may
             182      delegate this function to the Division of Insurance, to act as an escrow agent in this state;


             183          (iv) funds held by a homeowners' association or similar organization to pay
             184      maintenance and other related costs for commonly owned property;
             185          (v) funds held in connection with the collection of debts or payments on loans by a
             186      person acting solely as the agent or representative or otherwise at the sole direction of the
             187      person to which the debt or payment is owed, including funds held by an escrow agent for
             188      payment of taxes or insurance;
             189          (vi) funds and other assets held in trust on an occasional or isolated basis by a person
             190      who does not represent that he is engaged in the trust business in Utah;
             191          (vii) funds or other assets found by a court to be held in an implied, resulting, or
             192      constructive trust;
             193          (viii) funds or other assets held by a court appointed conservator, guardian, receiver,
             194      trustee, or other fiduciary if:
             195          (A) the conservator, receiver, guardian, trustee, or other fiduciary is responsible to the
             196      court in the same manner as a personal representative under Title 75, Chapter 3, Part 5,
             197      Supervised Administration, or as a receiver under Rule 66, Utah Rules of Civil Procedure;
             198          (B) the conservator, trustee, or other fiduciary is a certified public accountant or has
             199      qualified for and received a designation as a certified financial planner, chartered financial
             200      consultant, certified financial analyst, or similar designation suitable to the court, that
             201      evidences the conservator's, trustee's, or other fiduciary's professional competence to manage
             202      financial matters;
             203          (C) no trust company is willing or eligible to serve as conservator, guardian, trustee, or
             204      receiver after notice has been given pursuant to Section 75-1-401 to all trust companies doing
             205      business in this state, including a statement of the value of the assets to be managed. That
             206      notice need not be provided, however, if a trust company has been employed by the fiduciary to
             207      manage the assets; and
             208          (D) in the event guardianship services are needed, the person seeking appointment as a
             209      guardian under this Subsection (1) is a specialized care professional, as that term is defined in
             210      Section 75-5-311 , or a business or state agency that employs the services of one of those
             211      professionals for the purpose of caring for the incapacitated person, so long as the specialized
             212      care professional, business, or state agency does not:
             213          (I) profit financially or otherwise from, or receive compensation for acting in that


             214      capacity, except for the direct costs of providing guardianship or conservatorship services; or
             215          (II) otherwise have a conflict of interest in providing those services;
             216          (ix) funds or other assets held by a credit services organization operating in compliance
             217      with Title 13, Chapter 21, Credit Services Organizations Act;
             218          (x) funds, securities, or other assets held in a customer account in connection with the
             219      purchase or sale of securities by a regulated securities broker, dealer, or transfer agent; or
             220          (xi) funds, assets, and other property held in a business trust for the benefit of holders
             221      of certificates of beneficial interest if the fiduciary activities of the business trust are merely
             222      incidental to conducting business in the business trust form.
             223          (d) "Trust company" means an institution authorized to engage in the trust business
             224      under this chapter. Only the following may be a trust company:
             225          (i) a Utah depository institution or its wholly owned subsidiary;
             226          (ii) an out-of-state depository institution authorized to engage in business as a
             227      depository institution in Utah or its wholly owned subsidiary;
             228          (iii) a corporation, including a credit union service organization, owned entirely by one
             229      or more federally insured depository institutions as defined in Subsection 7-1-103 (8);
             230          (iv) a direct or indirect subsidiary of a depository institution holding company that also
             231      has a direct or indirect subsidiary authorized to engage in business as a depository institution in
             232      Utah; and
             233          (v) any other corporation continuously and lawfully engaged in the trust business in
             234      this state since before July 1, 1981.
             235          (2) Only a trust company may engage in the trust business in this state.
             236          (3) The requirements of this chapter do not apply to:
             237          (a) an institution authorized to engage in a trust business in another state that is
             238      engaged in trust activities in this state solely to fulfill its duties as a trustee of a trust created
             239      and administered in another state;
             240          (b) a national bank, federal savings bank, federal savings and loan association, or
             241      federal credit union authorized to engage in business as a depository institution in Utah, or any
             242      wholly owned subsidiary of any of these, to the extent the institution is authorized by its
             243      primary federal regulator to engage in the trust business in this state; or
             244          (c) a state agency that is otherwise authorized by statute to act as a conservator,


             245      receiver, guardian, trustee, or in any other fiduciary capacity.
             246          Section 4. Section 13-1-2 is amended to read:
             247           13-1-2. Creation and functions of department -- Divisions created -- Fees --
             248      Commerce Service Account.
             249          (1) (a) There is created the Department of Commerce.
             250          (b) The department shall execute and administer state laws regulating business
             251      activities and occupations affecting the public interest.
             252          (2) Within the department the following divisions are created:
             253          (a) the Division of Occupational and Professional Licensing;
             254          (b) the Division of Real Estate;
             255          (c) the Division of Securities;
             256          (d) the Division of Public Utilities;
             257          (e) the Division of Consumer Protection; [and]
             258          (f) the Division of Corporations and Commercial Code[.]; and
             259          (g) the Division of Insurance.
             260          (3) (a) Unless otherwise provided by statute, the department may adopt a schedule of
             261      fees assessed for services provided by the department by following the procedures and
             262      requirements of Section 63J-1-504 .
             263          (b) The department shall submit each fee established in this manner to the Legislature
             264      for its approval as part of the department's annual appropriations request.
             265          (c) (i) There is created a restricted account within the General Fund known as the
             266      "Commerce Service Account."
             267          (ii) The restricted account created in Subsection (3)(c)(i) consists of fees collected by
             268      each division and by the department.
             269          (iii) At the end of each fiscal year, the director of the Division of Finance shall transfer
             270      into the General Fund any fee collections that are greater than the legislative appropriations
             271      from the Commerce Service Account for that year.
             272          (d) The department may not charge or collect a fee or expend money from the
             273      restricted account without approval by the Legislature.
             274          Section 5. Section 17B-2a-818.5 is amended to read:
             275           17B-2a-818.5. Contracting powers of public transit districts -- Health insurance


             276      coverage.
             277          (1) For purposes of this section:
             278          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             279      34A-2-104 who:
             280          (i) works at least 30 hours per calendar week; and
             281          (ii) meets employer eligibility waiting requirements for health care insurance which
             282      may not exceed the first day of the calendar month following 90 days from the date of hire.
             283          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             284          (c) "Qualified health insurance coverage" means at the time the contract is entered into
             285      or renewed:
             286          (i) a health benefit plan and employer contribution level with a combined actuarial
             287      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             288      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and
             289      a contribution level of 50% of the premium for the employee and the dependents of the
             290      employee who reside or work in the state, in which:
             291          (A) the employer pays at least 50% of the premium for the employee and the
             292      dependents of the employee who reside or work in the state; and
             293          (B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):
             294          (I) rather that the benchmark plan's deductible, and the benchmark plan's out-of-pocket
             295      maximum based on income levels:
             296          (Aa) the deductible is $750 per individual and $2,250 per family; and
             297          (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
             298          (II) dental coverage is not required; and
             299          (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do not
             300      apply; or
             301          (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
             302      deductible that is either:
             303          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             304      or
             305          (II) a deductible that is higher than the lowest deductible permitted for a federally
             306      qualified high deductible health plan, but includes an employer contribution to a health savings


             307      account in a dollar amount at least equal to the dollar amount difference between the lowest
             308      deductible permitted for a federally qualified high deductible plan and the deductible for the
             309      employer offered federally qualified high deductible plan;
             310          (B) an out-of-pocket maximum that does not exceed three times the amount of the
             311      annual deductible; and
             312          (C) under which the employer pays 75% of the premium for the employee and the
             313      dependents of the employee who work or reside in the state.
             314          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             315          (2) (a) Except as provided in Subsection (3), this section applies to a design or
             316      construction contract entered into by the public transit district on or after July 1, 2009, and to a
             317      prime contractor or to a subcontractor in accordance with Subsection (2)(b).
             318          (b) (i) A prime contractor is subject to this section if the prime contract is in the
             319      amount of $1,500,000 or greater.
             320          (ii) A subcontractor is subject to this section if a subcontract is in the amount of
             321      $750,000 or greater.
             322          (3) This section does not apply if:
             323          (a) the application of this section jeopardizes the receipt of federal funds;
             324          (b) the contract is a sole source contract; or
             325          (c) the contract is an emergency procurement.
             326          (4) (a) This section does not apply to a change order as defined in Section [ 63G-6-102 ]
             327      63G-6-103 , or a modification to a contract, when the contract does not meet the initial
             328      threshold required by Subsection (2).
             329          (b) A person who intentionally uses change orders or contract modifications to
             330      circumvent the requirements of Subsection (2) is guilty of an infraction.
             331          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the public transit
             332      district that the contractor has and will maintain an offer of qualified health insurance coverage
             333      for the contractor's employees and the employee's dependents during the duration of the
             334      contract.
             335          (b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
             336      shall demonstrate to the public transit district that the subcontractor has and will maintain an
             337      offer of qualified health insurance coverage for the subcontractor's employees and the


             338      employee's dependents during the duration of the contract.
             339          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
             340      the duration of the contract is subject to penalties in accordance with an ordinance adopted by
             341      the public transit district under Subsection (6).
             342          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             343      requirements of Subsection (5)(b).
             344          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             345      the duration of the contract is subject to penalties in accordance with an ordinance adopted by
             346      the public transit district under Subsection (6).
             347          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             348      requirements of Subsection (5)(a).
             349          (6) The public transit district shall adopt ordinances:
             350          (a) in coordination with:
             351          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             352          (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
             353          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             354          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ; and
             355          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             356          (b) which establish:
             357          (i) the requirements and procedures a contractor must follow to demonstrate to the
             358      public transit district compliance with this section which shall include:
             359          (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a) or
             360      (b) more than twice in any 12-month period; and
             361          (B) that the actuarially equivalent determination required in Subsection (1) is met by
             362      the contractor if the contractor provides the department or division with a written statement of
             363      actuarial equivalency from either:
             364          (I) the [Utah Insurance Department] Department of Commerce under Title 31A,
             365      Insurance Code, which may delegate this function to the Division of Insurance;
             366          (II) an actuary selected by the contractor or the contractor's insurer; or
             367          (III) an underwriter who is responsible for developing the employer group's premium
             368      rates;


             369          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             370      violates the provisions of this section, which may include:
             371          (A) a three-month suspension of the contractor or subcontractor from entering into
             372      future contracts with the public transit district upon the first violation;
             373          (B) a six-month suspension of the contractor or subcontractor from entering into future
             374      contracts with the public transit district upon the second violation;
             375          (C) an action for debarment of the contractor or subcontractor in accordance with
             376      Section 63G-6-804 upon the third or subsequent violation; and
             377          (D) monetary penalties which may not exceed 50% of the amount necessary to
             378      purchase qualified health insurance coverage for employees and dependents of employees of
             379      the contractor or subcontractor who were not offered qualified health insurance coverage
             380      during the duration of the contract; and
             381          (iii) a website on which the district shall post the benchmark for the qualified health
             382      insurance coverage identified in Subsection (1)(c)(i).
             383          (7) (a) (i) In addition to the penalties imposed under Subsection (6)(b)(ii), a contractor
             384      or subcontractor who intentionally violates the provisions of this section shall be liable to the
             385      employee for health care costs that would have been covered by qualified health insurance
             386      coverage.
             387          (ii) An employer has an affirmative defense to a cause of action under Subsection
             388      (7)(a)(i) if:
             389          (A) the employer relied in good faith on a written statement of actuarial equivalency
             390      provided by an:
             391          (I) actuary; or
             392          (II) underwriter who is responsible for developing the employer group's premium rates;
             393      or
             394          (B) a department or division determines that compliance with this section is not
             395      required under the provisions of Subsection (3) or (4).
             396          (b) An employee has a private right of action only against the employee's employer to
             397      enforce the provisions of this Subsection (7).
             398          (8) Any penalties imposed and collected under this section shall be deposited into the
             399      Medicaid Restricted Account created in Section 26-18-402 .


             400          (9) The failure of a contractor or subcontractor to provide qualified health insurance
             401      coverage as required by this section:
             402          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             403      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             404      Legal and Contractual Remedies; and
             405          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             406      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             407      or construction.
             408          Section 6. Section 19-1-206 is amended to read:
             409           19-1-206. Contracting powers of department -- Health insurance coverage.
             410          (1) For purposes of this section:
             411          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             412      34A-2-104 who:
             413          (i) works at least 30 hours per calendar week; and
             414          (ii) meets employer eligibility waiting requirements for health care insurance which
             415      may not exceed the first day of the calendar month following 90 days from the date of hire.
             416          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             417          (c) "Qualified health insurance coverage" means at the time the contract is entered into
             418      or renewed:
             419          (i) a health benefit plan and employer contribution level with a combined actuarial
             420      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             421      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and
             422      a contribution level of 50% of the premium for the employee and the dependents of the
             423      employee who reside or work in the state, in which:
             424          (A) the employer pays at least 50% of the premium for the employee and the
             425      dependents of the employee who reside or work in the state; and
             426          (B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):
             427          (I) rather that the benchmark plan's deductible, and the benchmark plan's out-of-pocket
             428      maximum based on income levels:
             429          (Aa) the deductible is $750 per individual and $2,250 per family; and
             430          (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;


             431          (II) dental coverage is not required; and
             432          (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do not
             433      apply; or
             434          (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
             435      deductible that is either:
             436          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             437      or
             438          (II) a deductible that is higher than the lowest deductible permitted for a federally
             439      qualified high deductible health plan, but includes an employer contribution to a health savings
             440      account in a dollar amount at least equal to the dollar amount difference between the lowest
             441      deductible permitted for a federally qualified high deductible plan and the deductible for the
             442      employer offered federally qualified high deductible plan;
             443          (B) an out-of-pocket maximum that does not exceed three times the amount of the
             444      annual deductible; and
             445          (C) under which the employer pays 75% of the premium for the employee and the
             446      dependents of the employee who work or reside in the state.
             447          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             448          (2) (a) Except as provided in Subsection (3), this section applies to a design or
             449      construction contract entered into by or delegated to the department or a division or board of
             450      the department on or after July 1, 2009, and to a prime contractor or subcontractor in
             451      accordance with Subsection (2)(b).
             452          (b) (i) A prime contractor is subject to this section if the prime contract is in the
             453      amount of $1,500,000 or greater.
             454          (ii) A subcontractor is subject to this section if a subcontract is in the amount of
             455      $750,000 or greater.
             456          (3) This section does not apply to contracts entered into by the department or a division
             457      or board of the department if:
             458          (a) the application of this section jeopardizes the receipt of federal funds;
             459          (b) the contract or agreement is between:
             460          (i) the department or a division or board of the department; and
             461          (ii) (A) another agency of the state;


             462          (B) the federal government;
             463          (C) another state;
             464          (D) an interstate agency;
             465          (E) a political subdivision of this state; or
             466          (F) a political subdivision of another state;
             467          (c) the executive director determines that applying the requirements of this section to a
             468      particular contract interferes with the effective response to an immediate health and safety
             469      threat from the environment; or
             470          (d) the contract is:
             471          (i) a sole source contract; or
             472          (ii) an emergency procurement.
             473          (4) (a) This section does not apply to a change order as defined in Section 63G-6-103 ,
             474      or a modification to a contract, when the contract does not meet the initial threshold required
             475      by Subsection (2).
             476          (b) A person who intentionally uses change orders or contract modifications to
             477      circumvent the requirements of Subsection (2) is guilty of an infraction.
             478          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the executive
             479      director that the contractor has and will maintain an offer of qualified health insurance
             480      coverage for the contractor's employees and the employees' dependents during the duration of
             481      the contract.
             482          (b) If a subcontractor of the contractor is subject to Subsection (2), the contractor shall
             483      demonstrate to the executive director that the subcontractor has and will maintain an offer of
             484      qualified health insurance coverage for the subcontractor's employees and the employees'
             485      dependents during the duration of the contract.
             486          (c) (i) (A) A contractor who fails to comply with Subsection (5)(a) during the duration
             487      of the contract is subject to penalties in accordance with administrative rules adopted by the
             488      department under Subsection (6).
             489          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             490      requirements of Subsection (5)(b).
             491          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             492      the duration of the contract is subject to penalties in accordance with administrative rules


             493      adopted by the department under Subsection (6).
             494          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             495      requirements of Subsection (5)(a).
             496          (6) The department shall adopt administrative rules:
             497          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             498          (b) in coordination with:
             499          (i) a public transit district in accordance with Section 17B-2a-818.5 ;
             500          (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
             501          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             502          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             503          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             504          (vi) the Legislature's Administrative Rules Review Committee; and
             505          (c) which establish:
             506          (i) the requirements and procedures a contractor must follow to demonstrate to the
             507      public transit district compliance with this section which shall include:
             508          (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a) or
             509      (b) more than twice in any 12-month period; and
             510          (B) that the actuarially equivalent determination required in Subsection (1) is met by
             511      the contractor if the contractor provides the department or division with a written statement of
             512      actuarial equivalency from either:
             513          (I) the [Utah Insurance Department] Department of Commerce under Title 31A,
             514      Insurance Code, which may delegate this function to the Division of Insurance;
             515          (II) an actuary selected by the contractor or the contractor's insurer; or
             516          (III) an underwriter who is responsible for developing the employer group's premium
             517      rates;
             518          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             519      violates the provisions of this section, which may include:
             520          (A) a three-month suspension of the contractor or subcontractor from entering into
             521      future contracts with the state upon the first violation;
             522          (B) a six-month suspension of the contractor or subcontractor from entering into future
             523      contracts with the state upon the second violation;


             524          (C) an action for debarment of the contractor or subcontractor in accordance with
             525      Section 63G-6-804 upon the third or subsequent violation; and
             526          (D) notwithstanding Section 19-1-303 , monetary penalties which may not exceed 50%
             527      of the amount necessary to purchase qualified health insurance coverage for an employee and
             528      the dependents of an employee of the contractor or subcontractor who was not offered qualified
             529      health insurance coverage during the duration of the contract; and
             530          (iii) a website on which the department shall post the benchmark for the qualified
             531      health insurance coverage identified in Subsection (1)(c)(i).
             532          (7) (a) (i) In addition to the penalties imposed under Subsection (6)(c), a contractor or
             533      subcontractor who intentionally violates the provisions of this section shall be liable to the
             534      employee for health care costs that would have been covered by qualified health insurance
             535      coverage.
             536          (ii) An employer has an affirmative defense to a cause of action under Subsection
             537      (7)(a)(i) if:
             538          (A) the employer relied in good faith on a written statement of actuarial equivalency
             539      provided by:
             540          (I) an actuary; or
             541          (II) an underwriter who is responsible for developing the employer group's premium
             542      rates; or
             543          (B) the department determines that compliance with this section is not required under
             544      the provisions of Subsection (3) or (4).
             545          (b) An employee has a private right of action only against the employee's employer to
             546      enforce the provisions of this Subsection (7).
             547          (8) Any penalties imposed and collected under this section shall be deposited into the
             548      Medicaid Restricted Account created in Section 26-18-402 .
             549          (9) The failure of a contractor or subcontractor to provide qualified health insurance
             550      coverage as required by this section:
             551          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             552      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             553      Legal and Contractual Remedies; and
             554          (b) may not be used by the procurement entity or a prospective bidder, offeror, or


             555      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             556      or construction.
             557          Section 7. Section 26-1-37 is amended to read:
             558           26-1-37. Duty to establish standards for the electronic exchange of clinical health
             559      information.
             560          (1) For purposes of this section:
             561          (a) "Affiliate" means an organization that directly or indirectly through one or more
             562      intermediaries controls, is controlled by, or is under common control with another
             563      organization.
             564          (b) "Clinical health information" shall be defined by the department by administrative
             565      rule adopted in accordance with Subsection (2).
             566          (c) "Electronic exchange":
             567          (i) includes:
             568          (A) the electronic transmission of clinical health data via Internet or extranet; and
             569          (B) physically moving clinical health information from one location to another using
             570      magnetic tape, disk, or compact disc media; and
             571          (ii) does not include exchange of information by telephone or fax.
             572          (d) "Health care provider" means a licensing classification that is either:
             573          (i) licensed under Title 58, Occupations and Professions, to provide health care; or
             574          (ii) licensed under Chapter 21, Health Care Facility Licensing and Inspection Act.
             575          (e) "Health care system" shall include:
             576          (i) affiliated health care providers;
             577          (ii) affiliated third party payers; and
             578          (iii) other arrangement between organizations or providers as described by the
             579      department by administrative rule.
             580          (f) "Qualified network" means an entity that:
             581          (i) is a non-profit organization;
             582          (ii) is accredited by the Electronic Healthcare Network Accreditation Commission, or
             583      another national accrediting organization recognized by the department; and
             584          (iii) performs the electronic exchange of clinical health information among multiple
             585      health care providers not under common control, multiple third party payers not under common


             586      control, the department, and local health departments.
             587          (g) "Third party payer" means:
             588          (i) all insurers offering health insurance who are subject to Section 31A-22-614.5 ; and
             589          (ii) the state Medicaid program.
             590          (2) (a) In addition to the duties listed in Section 26-1-30 , the department shall, in
             591      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
             592          (i) define:
             593          (A) "clinical health information" subject to this section; and
             594          (B) "health system arrangements between providers or organizations" as described in
             595      Subsection (1)(e)(iii); and
             596          (ii) adopt standards for the electronic exchange of clinical health information between
             597      health care providers and third party payers that are for treatment, payment, health care
             598      operations, or public health reporting, as provided for in 45 C.F.R. Parts 160, 162, and 164,
             599      Health Insurance Reform: Security Standards.
             600          (b) The department shall coordinate its rule making authority under the provisions of
             601      this section with the rulemaking authority of the [Insurance Department] Department of
             602      Commerce under Title 31A, Insurance Code, which may delegate this function to the Division
             603      of Insurance, under Section 31A-22-614.5 . The department shall establish procedures for
             604      developing the rules adopted under this section, which ensure that the [Insurance Department]
             605      Department of Commerce is given the opportunity to comment on proposed rules.
             606          (3) (a) Except as provided in Subsection (3)(e), a health care provider or third party
             607      payer in Utah is required to use the standards adopted by the department under the provisions
             608      of Subsection (2) if the health care provider or third party payer elects to engage in an
             609      electronic exchange of clinical health information with another health care provider or third
             610      party payer.
             611          (b) A health care provider or third party payer may disclose information to the
             612      department or a local health department, by electronic exchange of clinical health information,
             613      as permitted by Subsection 45 C.F.R. 164.512(b).
             614          (c) When functioning in its capacity as a health care provider or payer, the department
             615      or a local health department may disclose clinical health information by electronic exchange to
             616      another health care provider or third party payer.


             617          (d) An electronic exchange of clinical health information by a health care provider, a
             618      third party payer, the department, or a local health department is a disclosure for treatment,
             619      payment, or health care operations if it complies with Subsection (3)(a) or (c) and is for
             620      treatment, payment, or health care operations, as those terms are defined in 45 C.F.R. Parts
             621      160, 162, and 164.
             622          (e) A health care provider or third party payer is not required to use the standards
             623      adopted by the department under the provisions of Subsection (2) if the health care provider or
             624      third party payer engage in the electronic exchange of clinical health information within a
             625      particular health care system.
             626          (4) Nothing in this section shall limit the number of networks eligible to engage in the
             627      electronic data interchange of clinical health information using the standards adopted by the
             628      department under Subsection (2)(a)(ii).
             629          (5) The department, a local health department, a health care provider, a third party
             630      payer, or a qualified network is not subject to civil liability for a disclosure of clinical health
             631      information if the disclosure is in accordance both with Subsection (3)(a) and with Subsection
             632      (3)(b), (3)(c), or (3)(d).
             633          (6) Within a qualified network, information generated or disclosed in the electronic
             634      exchange of clinical health information is not subject to discovery, use, or receipt in evidence
             635      in any legal proceeding of any kind or character.
             636          (7) The department shall report on the use of the standards for the electronic exchange
             637      of clinical health information to the legislative Health and Human Services Interim Committee
             638      no later than October 15 of each year. The report shall include publicly available information
             639      concerning the costs and savings for the department, third party payers, and health care
             640      providers associated with the standards for the electronic exchange of clinical health records.
             641          Section 8. Section 26-18-14 is amended to read:
             642           26-18-14. Strategic plan for health system reform -- Medicaid program.
             643          The department, including the Division of Health Care Financing within the
             644      department, shall:
             645          (1) work with the Governor's Office of Economic Development, the [Insurance
             646      Department] Department of Commerce, which may delegate this function to the Division of
             647      Insurance, the Department of Workforce Services, and the Legislature to develop health system


             648      reform in accordance with the strategic plan described in Title 63M, Chapter 1, Part 25, Health
             649      System Reform Act;
             650          (2) develop and submit amendments and waivers for the state's Medicaid plan as
             651      necessary to carry out the provisions of the Health System Reform Act;
             652          (3) seek federal approval of an amendment to Utah's Premium Partnership for Health
             653      Insurance that would allow the state's Medicaid program to subsidize the purchase of health
             654      insurance by an individual who does not have access to employer sponsored health insurance;
             655          (4) in coordination with the Department of Workforce Services:
             656          (a) establish a Children's Health Insurance Program eligibility policy, consistent with
             657      federal requirements and Subsection 26-40-105 (1)(d), that prohibits enrollment of a child in the
             658      program if the child's parent qualifies for assistance under Utah's Premium Partnership for
             659      Health Insurance; and
             660          (b) involve community partners, insurance agents and producers, community based
             661      service organizations, and the education community to increase enrollment of eligible
             662      employees and individuals in Utah's Premium Partnership for Health Insurance and the
             663      Children's Health Insurance Program; and
             664          (5) as funding permits, and in coordination with the department's adoption of standards
             665      for the electronic exchange of clinical health data, help the private sector form an alliance of
             666      employers, hospitals and other health care providers, patients, and health insurers to develop
             667      and use evidence-based health care quality measures for the purpose of improving health care
             668      decision making by health care providers, consumers, and third party payers.
             669          Section 9. Section 26-33a-106.1 is amended to read:
             670           26-33a-106.1. Health care cost and reimbursement data.
             671          (1) (a) The committee shall, as funding is available, establish an advisory panel to
             672      advise the committee on the development of a plan for the collection and use of health care
             673      data pursuant to Subsection 26-33a-104 (6) and this section.
             674          (b) The advisory panel shall include:
             675          (i) the chairman of the Utah Hospital Association;
             676          (ii) a representative of a rural hospital as designated by the Utah Hospital Association;
             677          (iii) a representative of the Utah Medical Association;
             678          (iv) a physician from a small group practice as designated by the Utah Medical


             679      Association;
             680          (v) two representatives who are health insurers, appointed by the committee;
             681          (vi) a representative from the Department of Health as designated by the executive
             682      director of the department;
             683          (vii) a representative from the committee;
             684          (viii) a consumer advocate appointed by the committee;
             685          (ix) a member of the House of Representatives appointed by the speaker of the House;
             686      and
             687          (x) a member of the Senate appointed by the president of the Senate.
             688          (c) The advisory panel shall elect a chair from among its members, and shall be staffed
             689      by the committee.
             690          (2) (a) The committee shall, as funding is available:
             691          (i) establish a plan for collecting data from data suppliers, as defined in Section
             692      26-33a-102 , to determine measurements of cost and reimbursements for risk adjusted episodes
             693      of health care;
             694          (ii) assist the demonstration projects implemented by the [Insurance Department]
             695      Department of Commerce under Title 31A, Insurance Code, which may delegate this function
             696      to the Division of Insurance, pursuant to Section 31A-22-614.6 , with access to cost data,
             697      reimbursement data, care process data, and provider service data necessary for the
             698      demonstration projects' research, statistical analysis, and quality improvement activities:
             699          (A) notwithstanding Subsection 26-33a-108 (1) and Section 26-33a-109 ;
             700          (B) contingent upon approval by the committee; and
             701          (C) subject to a contract between the department and the entity providing analysis for
             702      the demonstration project;
             703          (iii) share data regarding insurance claims with insurers participating in the defined
             704      contribution market created in Title 31A, Chapter 30, Part 2, Defined Contribution
             705      Arrangements, only to the extent necessary for:
             706          (A) renewals of policies in the defined contribution arrangement market; and
             707          (B) risk adjusting in the defined contribution arrangement market; and
             708          (iv) assist the Legislature and the public with awareness of, and the promotion of,
             709      transparency in the health care market by reporting on:


             710          (A) geographic variances in medical care and costs as demonstrated by data available
             711      to the committee; and
             712          (B) rate and price increases by health care providers:
             713          (I) that exceed the Consumer Price Index - Medical as provided by the United States
             714      Bureau of Labor statistics;
             715          (II) as calculated yearly from June to June; and
             716          (III) as demonstrated by data available to the committee.
             717          (b) The plan adopted under this Subsection (2) shall include:
             718          (i) the type of data that will be collected;
             719          (ii) how the data will be evaluated;
             720          (iii) how the data will be used;
             721          (iv) the extent to which, and how the data will be protected; and
             722          (v) who will have access to the data.
             723          Section 10. Section 26-45-104 is amended to read:
             724           26-45-104. Restrictions on health insurers.
             725          (1) Except as provided in Subsection (2), an insurer offering health care insurance as
             726      defined in Section 31A-1-301 may not in connection with the offer or renewal of an insurance
             727      product or in the determination of premiums, coverage, renewal, cancellation, or any other
             728      underwriting decision that pertains directly to the individual or any group of which the
             729      individual is a member that purchases insurance jointly:
             730          (a) access or otherwise take into consideration private genetic information about an
             731      asymptomatic individual;
             732          (b) request or require an asymptomatic individual to consent to a release for the
             733      purpose of accessing private genetic information about the individual;
             734          (c) request or require an asymptomatic individual or his blood relative to submit to a
             735      genetic test; and
             736          (d) inquire into or otherwise take into consideration the fact that an asymptomatic
             737      individual or his blood relative has taken or refused to take a genetic test.
             738          (2) An insurer offering health care insurance:
             739          (a) may request information regarding the necessity of a genetic test, but not the results
             740      of the test, if a claim for payment for the test has been made against an individual's health


             741      insurance policy;
             742          (b) may request that portion of private genetic information that is necessary to
             743      determine the insurer's obligation to pay for health care services where:
             744          (i) the primary basis for rendering such services to an individual is the result of a
             745      genetic test; and
             746          (ii) a claim for payment for such services has been made against the individual's health
             747      insurance policy;
             748          (c) may only store information obtained under this Subsection (2) in accordance with
             749      the provisions of the Health Insurance Portability and Accountability Act of 1996; and
             750          (d) may only use or otherwise disclose the information obtained under this Subsection
             751      (2) in connection with a proceeding to determine the obligation of an insurer to pay for a
             752      genetic test or health care services, provided that, in accordance with the provisions of the
             753      Health Insurance Portability and Accountability Act of 1996, the insurer makes a reasonable
             754      effort to limit disclosure to the minimum necessary to carry out the purposes of the disclosure.
             755          (3) (a) An insurer may, to the extent permitted by Subsection (2), seek an order
             756      compelling the disclosure of private genetic information held by an individual or third party.
             757          (b) An order authorizing the disclosure of private genetic information pursuant to this
             758      Subsection (2) shall:
             759          (i) limit disclosure to those parts of the record containing information essential to
             760      fulfill the objectives of the order;
             761          (ii) limit disclosure to those persons whose need for the information is the basis for the
             762      order; and
             763          (iii) include such other measures as may be necessary to limit disclosure for the
             764      protection of the individual.
             765          (4) Nothing in this section may be construed as restricting the ability of an insurer to
             766      use information other than private genetic information to take into account the health status of
             767      an individual, group, or population in determining premiums or making other underwriting
             768      decisions.
             769          (5) Nothing in this section may be construed as requiring an insurer to pay for genetic
             770      testing.
             771          (6) Information maintained by an insurer about an individual under this section may be


             772      redisclosed:
             773          (a) to protect the interests of the insurer in detecting, prosecuting, or taking legal action
             774      against criminal activity, fraud, material misrepresentations, and material omissions;
             775          (b) to enable business decisions to be made about the purchase, transfer, merger,
             776      reinsurance, or sale of all or part of the insurer's business; and
             777          (c) to the [commissioner of insurance] Department of Commerce under Title 31A,
             778      Insurance Code, which may delegate this function to the Division of Insurance, upon formal
             779      request.
             780          Section 11. Section 31A-1-301 is amended to read:
             781           31A-1-301. Definitions.
             782          As used in this title, unless otherwise specified:
             783          (1) (a) "Accident and health insurance" means insurance to provide protection against
             784      economic losses resulting from:
             785          (i) a medical condition including:
             786          (A) a medical care expense; or
             787          (B) the risk of disability;
             788          (ii) accident; or
             789          (iii) sickness.
             790          (b) "Accident and health insurance":
             791          (i) includes a contract with disability contingencies including:
             792          (A) an income replacement contract;
             793          (B) a health care contract;
             794          (C) an expense reimbursement contract;
             795          (D) a credit accident and health contract;
             796          (E) a continuing care contract; and
             797          (F) a long-term care contract; and
             798          (ii) may provide:
             799          (A) hospital coverage;
             800          (B) surgical coverage;
             801          (C) medical coverage;
             802          (D) loss of income coverage;


             803          (E) prescription drug coverage;
             804          (F) dental coverage; or
             805          (G) vision coverage.
             806          (c) "Accident and health insurance" does not include workers' compensation insurance.
             807          (2) "Actuary" is as defined by the commissioner by rule, made in accordance with Title
             808      63G, Chapter 3, Utah Administrative Rulemaking Act.
             809          (3) "Administrator" is defined in Subsection (159).
             810          (4) "Adult" means an individual who has attained the age of at least 18 years.
             811          (5) "Affiliate" means a person who controls, is controlled by, or is under common
             812      control with, another person. A corporation is an affiliate of another corporation, regardless of
             813      ownership, if substantially the same group of individuals manage the corporations.
             814          (6) "Agency" means:
             815          (a) a person other than an individual, including a sole proprietorship by which an
             816      individual does business under an assumed name; and
             817          (b) an insurance organization licensed or required to be licensed under Section
             818      31A-23a-301 .
             819          (7) "Alien insurer" means an insurer domiciled outside the United States.
             820          (8) "Amendment" means an endorsement to an insurance policy or certificate.
             821          (9) "Annuity" means an agreement to make periodical payments for a period certain or
             822      over the lifetime of one or more individuals if the making or continuance of all or some of the
             823      series of the payments, or the amount of the payment, is dependent upon the continuance of
             824      human life.
             825          (10) "Application" means a document:
             826          (a) (i) completed by an applicant to provide information about the risk to be insured;
             827      and
             828          (ii) that contains information that is used by the insurer to evaluate risk and decide
             829      whether to:
             830          (A) insure the risk under:
             831          (I) the coverage as originally offered; or
             832          (II) a modification of the coverage as originally offered; or
             833          (B) decline to insure the risk; or


             834          (b) used by the insurer to gather information from the applicant before issuance of an
             835      annuity contract.
             836          (11) "Articles" or "articles of incorporation" means:
             837          (a) the original articles;
             838          (b) a special law;
             839          (c) a charter;
             840          (d) an amendment;
             841          (e) restated articles;
             842          (f) articles of merger or consolidation;
             843          (g) a trust instrument;
             844          (h) another constitutive document for a trust or other entity that is not a corporation;
             845      and
             846          (i) an amendment to an item listed in Subsections (11)(a) through (h).
             847          (12) "Bail bond insurance" means a guarantee that a person will attend court when
             848      required, up to and including surrender of the person in execution of a sentence imposed under
             849      Subsection 77-20-7 (1), as a condition to the release of that person from confinement.
             850          (13) "Binder" is defined in Section 31A-21-102 .
             851          (14) "Blanket insurance policy" means a group policy covering a defined class of
             852      persons:
             853          (a) without individual underwriting or application; and
             854          (b) that is determined by definition with or without designating each person covered.
             855          (15) "Board," "board of trustees," or "board of directors" means the group of persons
             856      with responsibility over, or management of, a corporation, however designated.
             857          (16) "Business entity" means:
             858          (a) a corporation;
             859          (b) an association;
             860          (c) a partnership;
             861          (d) a limited liability company;
             862          (e) a limited liability partnership; or
             863          (f) another legal entity.
             864          (17) "Business of insurance" is defined in Subsection (85).


             865          (18) "Business plan" means the information required to be supplied to the
             866      commissioner under Subsections 31A-5-204 (2)(i) and (j), including the information required
             867      when these subsections apply by reference under:
             868          (a) Section 31A-7-201 ;
             869          (b) Section 31A-8-205 ; or
             870          (c) Subsection 31A-9-205 (2).
             871          (19) (a) "Bylaws" means the rules adopted for the regulation or management of a
             872      corporation's affairs, however designated.
             873          (b) "Bylaws" includes comparable rules for a trust or other entity that is not a
             874      corporation.
             875          (20) "Captive insurance company" means:
             876          (a) an insurer:
             877          (i) owned by another organization; and
             878          (ii) whose exclusive purpose is to insure risks of the parent organization and an
             879      affiliated company; or
             880          (b) in the case of a group or association, an insurer:
             881          (i) owned by the insureds; and
             882          (ii) whose exclusive purpose is to insure risks of:
             883          (A) a member organization;
             884          (B) a group member; or
             885          (C) an affiliate of:
             886          (I) a member organization; or
             887          (II) a group member.
             888          (21) "Casualty insurance" means liability insurance.
             889          (22) "Certificate" means evidence of insurance given to:
             890          (a) an insured under a group insurance policy; or
             891          (b) a third party.
             892          (23) "Certificate of authority" is included within the term "license."
             893          (24) "Claim," unless the context otherwise requires, means a request or demand on an
             894      insurer for payment of a benefit according to the terms of an insurance policy.
             895          (25) "Claims-made coverage" means an insurance contract or provision limiting


             896      coverage under a policy insuring against legal liability to claims that are first made against the
             897      insured while the policy is in force.
             898          (26) (a) "Commissioner," [or] "commissioner of insurance," [means Utah's insurance
             899      commissioner.] or "insurance commissioner" means the executive director of the Department
             900      of Commerce appointed in accordance with Section 13-1-3 :
             901          (i) except that the executive director may delegate a power or duty of the executive
             902      director under this title to the commissioner of the division under Section 31A-2a-202 ;
             903          (ii) notwithstanding that it is defined otherwise in this title; and
             904          (iii) unless the context requires otherwise.
             905          (b) When appropriate, the terms listed in Subsection (26)(a) apply to the equivalent
             906      supervisory official of another jurisdiction.
             907          (27) (a) "Continuing care insurance" means insurance that:
             908          (i) provides board and lodging;
             909          (ii) provides one or more of the following:
             910          (A) a personal service;
             911          (B) a nursing service;
             912          (C) a medical service; or
             913          (D) any other health-related service; and
             914          (iii) provides the coverage described in this Subsection (27)(a) under an agreement
             915      effective:
             916          (A) for the life of the insured; or
             917          (B) for a period in excess of one year.
             918          (b) Insurance is continuing care insurance regardless of whether or not the board and
             919      lodging are provided at the same location as a service described in Subsection (27)(a)(ii).
             920          (28) (a) "Control," "controlling," "controlled," or "under common control" means the
             921      direct or indirect possession of the power to direct or cause the direction of the management
             922      and policies of a person. This control may be:
             923          (i) by contract;
             924          (ii) by common management;
             925          (iii) through the ownership of voting securities; or
             926          (iv) by a means other than those described in Subsections (28)(a)(i) through (iii).


             927          (b) There is no presumption that an individual holding an official position with another
             928      person controls that person solely by reason of the position.
             929          (c) A person having a contract or arrangement giving control is considered to have
             930      control despite the illegality or invalidity of the contract or arrangement.
             931          (d) There is a rebuttable presumption of control in a person who directly or indirectly
             932      owns, controls, holds with the power to vote, or holds proxies to vote 10% or more of the
             933      voting securities of another person.
             934          (29) "Controlled insurer" means a licensed insurer that is either directly or indirectly
             935      controlled by a producer.
             936          (30) "Controlling person" means a person that directly or indirectly has the power to
             937      direct or cause to be directed, the management, control, or activities of a reinsurance
             938      intermediary.
             939          (31) "Controlling producer" means a producer who directly or indirectly controls an
             940      insurer.
             941          (32) (a) "Corporation" means an insurance corporation, except when referring to:
             942          (i) a corporation doing business:
             943          (A) as:
             944          (I) an insurance producer;
             945          (II) a limited line producer;
             946          (III) a consultant;
             947          (IV) a managing general agent;
             948          (V) a reinsurance intermediary;
             949          (VI) a third party administrator; or
             950          (VII) an adjuster; and
             951          (B) under:
             952          (I) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             953      Reinsurance Intermediaries;
             954          (II) Chapter 25, Third Party Administrators; or
             955          (III) Chapter 26, Insurance Adjusters; or
             956          (ii) a noninsurer that is part of a holding company system under Chapter 16, Insurance
             957      Holding Companies.


             958          (b) "Stock corporation" means a stock insurance corporation.
             959          (c) "Mutual" or "mutual corporation" means a mutual insurance corporation.
             960          (33) (a) "Creditable coverage" has the same meaning as provided in federal regulations
             961      adopted pursuant to the Health Insurance Portability and Accountability Act of 1996, Pub. L.
             962      104-191, 110 Stat. 1936.
             963          (b) "Creditable coverage" includes coverage that is offered through a public health plan
             964      such as:
             965          (i) the Primary Care Network Program under a Medicaid primary care network
             966      demonstration waiver obtained subject to Section 26-18-3 ;
             967          (ii) the Children's Health Insurance Program under Section 26-40-106 ; or
             968          (iii) the Ryan White Program Comprehensive AIDS Resources Emergency Act, Pub. L.
             969      101-381, and Ryan White HIV/AIDS Treatment Modernization Act of 2006, Pub. L. 109-415.
             970          (34) "Credit accident and health insurance" means insurance on a debtor to provide
             971      indemnity for payments coming due on a specific loan or other credit transaction while the
             972      debtor is disabled.
             973          (35) (a) "Credit insurance" means insurance offered in connection with an extension of
             974      credit that is limited to partially or wholly extinguishing that credit obligation.
             975          (b) "Credit insurance" includes:
             976          (i) credit accident and health insurance;
             977          (ii) credit life insurance;
             978          (iii) credit property insurance;
             979          (iv) credit unemployment insurance;
             980          (v) guaranteed automobile protection insurance;
             981          (vi) involuntary unemployment insurance;
             982          (vii) mortgage accident and health insurance;
             983          (viii) mortgage guaranty insurance; and
             984          (ix) mortgage life insurance.
             985          (36) "Credit life insurance" means insurance on the life of a debtor in connection with
             986      an extension of credit that pays a person if the debtor dies.
             987          (37) "Credit property insurance" means insurance:
             988          (a) offered in connection with an extension of credit; and


             989          (b) that protects the property until the debt is paid.
             990          (38) "Credit unemployment insurance" means insurance:
             991          (a) offered in connection with an extension of credit; and
             992          (b) that provides indemnity if the debtor is unemployed for payments coming due on a:
             993          (i) specific loan; or
             994          (ii) credit transaction.
             995          (39) "Creditor" means a person, including an insured, having a claim, whether:
             996          (a) matured;
             997          (b) unmatured;
             998          (c) liquidated;
             999          (d) unliquidated;
             1000          (e) secured;
             1001          (f) unsecured;
             1002          (g) absolute;
             1003          (h) fixed; or
             1004          (i) contingent.
             1005          (40) (a) "Customer service representative" means a person that provides an insurance
             1006      service and insurance product information:
             1007          (i) for the customer service representative's:
             1008          (A) producer; or
             1009          (B) consultant employer; and
             1010          (ii) to the customer service representative's employer's:
             1011          (A) customer;
             1012          (B) client; or
             1013          (C) organization.
             1014          (b) A customer service representative may only operate within the scope of authority of
             1015      the customer service representative's producer or consultant employer.
             1016          (41) "Deadline" means a final date or time:
             1017          (a) imposed by:
             1018          (i) statute;
             1019          (ii) rule; or


             1020          (iii) order; and
             1021          (b) by which a required filing or payment must be received by the department.
             1022          (42) "Deemer clause" means a provision under this title under which upon the
             1023      occurrence of a condition precedent, the commissioner is considered to have taken a specific
             1024      action. If the statute so provides, a condition precedent may be the commissioner's failure to
             1025      take a specific action.
             1026          (43) "Degree of relationship" means the number of steps between two persons
             1027      determined by counting the generations separating one person from a common ancestor and
             1028      then counting the generations to the other person.
             1029          (44) "Department," "insurance department," or "department of insurance" means the
             1030      [Insurance Department.] Department of Commerce created in Section 13-1-2 :
             1031          (a) except that the executive director may delegate a power or duty of the department
             1032      under this title to the Division of Insurance;
             1033          (b) notwithstanding that it is defined otherwise in this title; and
             1034          (c) unless the context requires otherwise.
             1035          (45) "Director" means a member of the board of directors of a corporation.
             1036          (46) "Disability" means a physiological or psychological condition that partially or
             1037      totally limits an individual's ability to:
             1038          (a) perform the duties of:
             1039          (i) that individual's occupation; or
             1040          (ii) any occupation for which the individual is reasonably suited by education, training,
             1041      or experience; or
             1042          (b) perform two or more of the following basic activities of daily living:
             1043          (i) eating;
             1044          (ii) toileting;
             1045          (iii) transferring;
             1046          (iv) bathing; or
             1047          (v) dressing.
             1048          (47) "Disability income insurance" is defined in Subsection (76).
             1049          (48) "Domestic insurer" means an insurer organized under the laws of this state.
             1050          (49) "Domiciliary state" means the state in which an insurer:


             1051          (a) is incorporated;
             1052          (b) is organized; or
             1053          (c) in the case of an alien insurer, enters into the United States.
             1054          (50) (a) "Eligible employee" means:
             1055          (i) an employee who:
             1056          (A) works on a full-time basis; and
             1057          (B) has a normal work week of 30 or more hours; or
             1058          (ii) a person described in Subsection (50)(b).
             1059          (b) "Eligible employee" includes, if the individual is included under a health benefit
             1060      plan of a small employer:
             1061          (i) a sole proprietor;
             1062          (ii) a partner in a partnership; or
             1063          (iii) an independent contractor.
             1064          (c) "Eligible employee" does not include, unless eligible under Subsection (50)(b):
             1065          (i) an individual who works on a temporary or substitute basis for a small employer;
             1066          (ii) an employer's spouse; or
             1067          (iii) a dependent of an employer.
             1068          (51) "Employee" means an individual employed by an employer.
             1069          (52) "Employee benefits" means one or more benefits or services provided to:
             1070          (a) an employee; or
             1071          (b) a dependent of an employee.
             1072          (53) (a) "Employee welfare fund" means a fund:
             1073          (i) established or maintained, whether directly or through a trustee, by:
             1074          (A) one or more employers;
             1075          (B) one or more labor organizations; or
             1076          (C) a combination of employers and labor organizations; and
             1077          (ii) that provides employee benefits paid or contracted to be paid, other than income
             1078      from investments of the fund:
             1079          (A) by or on behalf of an employer doing business in this state; or
             1080          (B) for the benefit of a person employed in this state.
             1081          (b) "Employee welfare fund" includes a plan funded or subsidized by a user fee or tax


             1082      revenues.
             1083          (54) "Endorsement" means a written agreement attached to a policy or certificate to
             1084      modify the policy or certificate coverage.
             1085          (55) "Enrollment date," with respect to a health benefit plan, means:
             1086          (a) the first day of coverage; or
             1087          (b) if there is a waiting period, the first day of the waiting period.
             1088          (56) (a) "Escrow" means:
             1089          (i) a real estate settlement or real estate closing conducted by a third party pursuant to
             1090      the requirements of a written agreement between the parties in a real estate transaction; or
             1091          (ii) a settlement or closing involving:
             1092          (A) a mobile home;
             1093          (B) a grazing right;
             1094          (C) a water right; or
             1095          (D) other personal property authorized by the commissioner.
             1096          (b) "Escrow" includes the act of conducting a:
             1097          (i) real estate settlement; or
             1098          (ii) real estate closing.
             1099          (57) "Escrow agent" means:
             1100          (a) an insurance producer with:
             1101          (i) a title insurance line of authority; and
             1102          (ii) an escrow subline of authority; or
             1103          (b) a person defined as an escrow agent in Section 7-22-101 .
             1104          (58) (a) "Excludes" is not exhaustive and does not mean that another thing is not also
             1105      excluded.
             1106          (b) The items listed in a list using the term "excludes" are representative examples for
             1107      use in interpretation of this title.
             1108          (59) "Exclusion" means for the purposes of accident and health insurance that an
             1109      insurer does not provide insurance coverage, for whatever reason, for one of the following:
             1110          (a) a specific physical condition;
             1111          (b) a specific medical procedure;
             1112          (c) a specific disease or disorder; or


             1113          (d) a specific prescription drug or class of prescription drugs.
             1114          (60) "Expense reimbursement insurance" means insurance:
             1115          (a) written to provide a payment for an expense relating to hospital confinement
             1116      resulting from illness or injury; and
             1117          (b) written:
             1118          (i) as a daily limit for a specific number of days in a hospital; and
             1119          (ii) to have a one or two day waiting period following a hospitalization.
             1120          (61) "Fidelity insurance" means insurance guaranteeing the fidelity of a person holding
             1121      a position of public or private trust.
             1122          (62) (a) "Filed" means that a filing is:
             1123          (i) submitted to the department as required by and in accordance with applicable
             1124      statute, rule, or filing order;
             1125          (ii) received by the department within the time period provided in applicable statute,
             1126      rule, or filing order; and
             1127          (iii) accompanied by the appropriate fee in accordance with:
             1128          (A) Section 31A-3-103 ; or
             1129          (B) rule.
             1130          (b) "Filed" does not include a filing that is rejected by the department because it is not
             1131      submitted in accordance with Subsection (62)(a).
             1132          (63) "Filing," when used as a noun, means an item required to be filed with the
             1133      department including:
             1134          (a) a policy;
             1135          (b) a rate;
             1136          (c) a form;
             1137          (d) a document;
             1138          (e) a plan;
             1139          (f) a manual;
             1140          (g) an application;
             1141          (h) a report;
             1142          (i) a certificate;
             1143          (j) an endorsement;


             1144          (k) an actuarial certification;
             1145          (l) a licensee annual statement;
             1146          (m) a licensee renewal application;
             1147          (n) an advertisement; or
             1148          (o) an outline of coverage.
             1149          (64) "First party insurance" means an insurance policy or contract in which the insurer
             1150      agrees to pay a claim submitted to it by the insured for the insured's losses.
             1151          (65) "Foreign insurer" means an insurer domiciled outside of this state, including an
             1152      alien insurer.
             1153          (66) (a) "Form" means one of the following prepared for general use:
             1154          (i) a policy;
             1155          (ii) a certificate;
             1156          (iii) an application;
             1157          (iv) an outline of coverage; or
             1158          (v) an endorsement.
             1159          (b) "Form" does not include a document specially prepared for use in an individual
             1160      case.
             1161          (67) "Franchise insurance" means an individual insurance policy provided through a
             1162      mass marketing arrangement involving a defined class of persons related in some way other
             1163      than through the purchase of insurance.
             1164          (68) "General lines of authority" include:
             1165          (a) the general lines of insurance in Subsection (69);
             1166          (b) title insurance under one of the following sublines of authority:
             1167          (i) search, including authority to act as a title marketing representative;
             1168          (ii) escrow, including authority to act as a title marketing representative; and
             1169          (iii) title marketing representative only;
             1170          (c) surplus lines;
             1171          (d) workers' compensation; and
             1172          (e) any other line of insurance that the commissioner considers necessary to recognize
             1173      in the public interest.
             1174          (69) "General lines of insurance" include:


             1175          (a) accident and health;
             1176          (b) casualty;
             1177          (c) life;
             1178          (d) personal lines;
             1179          (e) property; and
             1180          (f) variable contracts, including variable life and annuity.
             1181          (70) "Group health plan" means an employee welfare benefit plan to the extent that the
             1182      plan provides medical care:
             1183          (a) (i) to an employee; or
             1184          (ii) to a dependent of an employee; and
             1185          (b) (i) directly;
             1186          (ii) through insurance reimbursement; or
             1187          (iii) through another method.
             1188          (71) (a) "Group insurance policy" means a policy covering a group of persons that is
             1189      issued:
             1190          (i) to a policyholder on behalf of the group; and
             1191          (ii) for the benefit of a member of the group who is selected under a procedure defined
             1192      in:
             1193          (A) the policy; or
             1194          (B) an agreement that is collateral to the policy.
             1195          (b) A group insurance policy may include a member of the policyholder's family or a
             1196      dependent.
             1197          (72) "Guaranteed automobile protection insurance" means insurance offered in
             1198      connection with an extension of credit that pays the difference in amount between the
             1199      insurance settlement and the balance of the loan if the insured automobile is a total loss.
             1200          (73) (a) Except as provided in Subsection (73)(b), "health benefit plan" means a policy
             1201      or certificate that:
             1202          (i) provides health care insurance;
             1203          (ii) provides major medical expense insurance; or
             1204          (iii) is offered as a substitute for hospital or medical expense insurance, such as:
             1205          (A) a hospital confinement indemnity; or


             1206          (B) a limited benefit plan.
             1207          (b) "Health benefit plan" does not include a policy or certificate that:
             1208          (i) provides benefits solely for:
             1209          (A) accident;
             1210          (B) dental;
             1211          (C) income replacement;
             1212          (D) long-term care;
             1213          (E) a Medicare supplement;
             1214          (F) a specified disease;
             1215          (G) vision; or
             1216          (H) a short-term limited duration; or
             1217          (ii) is offered and marketed as supplemental health insurance.
             1218          (74) "Health care" means any of the following intended for use in the diagnosis,
             1219      treatment, mitigation, or prevention of a human ailment or impairment:
             1220          (a) a professional service;
             1221          (b) a personal service;
             1222          (c) a facility;
             1223          (d) equipment;
             1224          (e) a device;
             1225          (f) supplies; or
             1226          (g) medicine.
             1227          (75) (a) "Health care insurance" or "health insurance" means insurance providing:
             1228          (i) a health care benefit; or
             1229          (ii) payment of an incurred health care expense.
             1230          (b) "Health care insurance" or "health insurance" does not include accident and health
             1231      insurance providing a benefit for:
             1232          (i) replacement of income;
             1233          (ii) short-term accident;
             1234          (iii) fixed indemnity;
             1235          (iv) credit accident and health;
             1236          (v) supplements to liability;


             1237          (vi) workers' compensation;
             1238          (vii) automobile medical payment;
             1239          (viii) no-fault automobile;
             1240          (ix) equivalent self-insurance; or
             1241          (x) a type of accident and health insurance coverage that is a part of or attached to
             1242      another type of policy.
             1243          (76) "Income replacement insurance" or "disability income insurance" means insurance
             1244      written to provide payments to replace income lost from accident or sickness.
             1245          (77) "Indemnity" means the payment of an amount to offset all or part of an insured
             1246      loss.
             1247          (78) "Independent adjuster" means an insurance adjuster required to be licensed under
             1248      Section 31A-26-201 who engages in insurance adjusting as a representative of an insurer.
             1249          (79) "Independently procured insurance" means insurance procured under Section
             1250      31A-15-104 .
             1251          (80) "Individual" means a natural person.
             1252          (81) "Inland marine insurance" includes insurance covering:
             1253          (a) property in transit on or over land;
             1254          (b) property in transit over water by means other than boat or ship;
             1255          (c) bailee liability;
             1256          (d) fixed transportation property such as bridges, electric transmission systems, radio
             1257      and television transmission towers and tunnels; and
             1258          (e) personal and commercial property floaters.
             1259          (82) "Insolvency" means that:
             1260          (a) an insurer is unable to pay its debts or meet its obligations as the debts and
             1261      obligations mature;
             1262          (b) an insurer's total adjusted capital is less than the insurer's mandatory control level
             1263      RBC under Subsection 31A-17-601 (8)(c); or
             1264          (c) an insurer is determined to be hazardous under this title.
             1265          (83) (a) "Insurance" means:
             1266          (i) an arrangement, contract, or plan for the transfer of a risk or risks from one or more
             1267      persons to one or more other persons; or


             1268          (ii) an arrangement, contract, or plan for the distribution of a risk or risks among a
             1269      group of persons that includes the person seeking to distribute that person's risk.
             1270          (b) "Insurance" includes:
             1271          (i) a risk distributing arrangement providing for compensation or replacement for
             1272      damages or loss through the provision of a service or a benefit in kind;
             1273          (ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a
             1274      business and not as merely incidental to a business transaction; and
             1275          (iii) a plan in which the risk does not rest upon the person who makes an arrangement,
             1276      but with a class of persons who have agreed to share the risk.
             1277          (84) "Insurance adjuster" means a person who directs the investigation, negotiation, or
             1278      settlement of a claim under an insurance policy other than life insurance or an annuity, on
             1279      behalf of an insurer, policyholder, or a claimant under an insurance policy.
             1280          (85) "Insurance business" or "business of insurance" includes:
             1281          (a) providing health care insurance by an organization that is or is required to be
             1282      licensed under this title;
             1283          (b) providing a benefit to an employee in the event of a contingency not within the
             1284      control of the employee, in which the employee is entitled to the benefit as a right, which
             1285      benefit may be provided either:
             1286          (i) by a single employer or by multiple employer groups; or
             1287          (ii) through one or more trusts, associations, or other entities;
             1288          (c) providing an annuity:
             1289          (i) including an annuity issued in return for a gift; and
             1290          (ii) except an annuity provided by a person specified in Subsections 31A-22-1305 (2)
             1291      and (3);
             1292          (d) providing the characteristic services of a motor club as outlined in Subsection
             1293      (113);
             1294          (e) providing another person with insurance;
             1295          (f) making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor,
             1296      or surety, a contract or policy of title insurance;
             1297          (g) transacting or proposing to transact any phase of title insurance, including:
             1298          (i) solicitation;


             1299          (ii) negotiation preliminary to execution;
             1300          (iii) execution of a contract of title insurance;
             1301          (iv) insuring;
             1302          (v) transacting matters subsequent to the execution of the contract and arising out of
             1303      the contract, including reinsurance; and
             1304          (vi) transacting or proposing a life settlement; and
             1305          (h) doing, or proposing to do, any business in substance equivalent to Subsections
             1306      (85)(a) through (g) in a manner designed to evade this title.
             1307          (86) "Insurance consultant" or "consultant" means a person who:
             1308          (a) advises another person about insurance needs and coverages;
             1309          (b) is compensated by the person advised on a basis not directly related to the insurance
             1310      placed; and
             1311          (c) except as provided in Section 31A-23a-501 , is not compensated directly or
             1312      indirectly by an insurer or producer for advice given.
             1313          (87) "Insurance holding company system" means a group of two or more affiliated
             1314      persons, at least one of whom is an insurer.
             1315          (88) (a) "Insurance producer" or "producer" means a person licensed or required to be
             1316      licensed under the laws of this state to sell, solicit, or negotiate insurance.
             1317          (b) With regards to the selling, soliciting, or negotiating of an insurance product to an
             1318      insurance customer or an insured:
             1319          (i) "producer for the insurer" means a producer who is compensated directly or
             1320      indirectly by an insurer for selling, soliciting, or negotiating a product of that insurer; and
             1321          (ii) "producer for the insured" means a producer who:
             1322          (A) is compensated directly and only by an insurance customer or an insured; and
             1323          (B) receives no compensation directly or indirectly from an insurer for selling,
             1324      soliciting, or negotiating a product of that insurer to an insurance customer or insured.
             1325          (89) (a) "Insured" means a person to whom or for whose benefit an insurer makes a
             1326      promise in an insurance policy and includes:
             1327          (i) a policyholder;
             1328          (ii) a subscriber;
             1329          (iii) a member; and


             1330          (iv) a beneficiary.
             1331          (b) The definition in Subsection (89)(a):
             1332          (i) applies only to this title; and
             1333          (ii) does not define the meaning of this word as used in an insurance policy or
             1334      certificate.
             1335          (90) (a) "Insurer" means a person doing an insurance business as a principal including:
             1336          (i) a fraternal benefit society;
             1337          (ii) an issuer of a gift annuity other than an annuity specified in Subsections
             1338      31A-22-1305 (2) and (3);
             1339          (iii) a motor club;
             1340          (iv) an employee welfare plan; and
             1341          (v) a person purporting or intending to do an insurance business as a principal on that
             1342      person's own account.
             1343          (b) "Insurer" does not include a governmental entity to the extent the governmental
             1344      entity is engaged in an activity described in Section 31A-12-107 .
             1345          (91) "Interinsurance exchange" is defined in Subsection (142).
             1346          (92) "Involuntary unemployment insurance" means insurance:
             1347          (a) offered in connection with an extension of credit; and
             1348          (b) that provides indemnity if the debtor is involuntarily unemployed for payments
             1349      coming due on a:
             1350          (i) specific loan; or
             1351          (ii) credit transaction.
             1352          (93) "Large employer," in connection with a health benefit plan, means an employer
             1353      who, with respect to a calendar year and to a plan year:
             1354          (a) employed an average of at least 51 eligible employees on each business day during
             1355      the preceding calendar year; and
             1356          (b) employs at least two employees on the first day of the plan year.
             1357          (94) "Late enrollee," with respect to an employer health benefit plan, means an
             1358      individual whose enrollment is a late enrollment.
             1359          (95) "Late enrollment," with respect to an employer health benefit plan, means
             1360      enrollment of an individual other than:


             1361          (a) on the earliest date on which coverage can become effective for the individual
             1362      under the terms of the plan; or
             1363          (b) through special enrollment.
             1364          (96) (a) Except for a retainer contract or legal assistance described in Section
             1365      31A-1-103 , "legal expense insurance" means insurance written to indemnify or pay for a
             1366      specified legal expense.
             1367          (b) "Legal expense insurance" includes an arrangement that creates a reasonable
             1368      expectation of an enforceable right.
             1369          (c) "Legal expense insurance" does not include the provision of, or reimbursement for,
             1370      legal services incidental to other insurance coverage.
             1371          (97) (a) "Liability insurance" means insurance against liability:
             1372          (i) for death, injury, or disability of a human being, or for damage to property,
             1373      exclusive of the coverages under:
             1374          (A) Subsection (107) for medical malpractice insurance;
             1375          (B) Subsection (134) for professional liability insurance; and
             1376          (C) Subsection (168) for workers' compensation insurance;
             1377          (ii) for a medical, hospital, surgical, and funeral benefit to a person other than the
             1378      insured who is injured, irrespective of legal liability of the insured, when issued with or
             1379      supplemental to insurance against legal liability for the death, injury, or disability of a human
             1380      being, exclusive of the coverages under:
             1381          (A) Subsection (107) for medical malpractice insurance;
             1382          (B) Subsection (134) for professional liability insurance; and
             1383          (C) Subsection (168) for workers' compensation insurance;
             1384          (iii) for loss or damage to property resulting from an accident to or explosion of a
             1385      boiler, pipe, pressure container, machinery, or apparatus;
             1386          (iv) for loss or damage to property caused by:
             1387          (A) the breakage or leakage of a sprinkler, water pipe, or water container; or
             1388          (B) water entering through a leak or opening in a building; or
             1389          (v) for other loss or damage properly the subject of insurance not within another kind
             1390      of insurance as defined in this chapter, if the insurance is not contrary to law or public policy.
             1391          (b) "Liability insurance" includes:


             1392          (i) vehicle liability insurance;
             1393          (ii) residential dwelling liability insurance; and
             1394          (iii) making inspection of, and issuing a certificate of inspection upon, an elevator,
             1395      boiler, machinery, or apparatus of any kind when done in connection with insurance on the
             1396      elevator, boiler, machinery, or apparatus.
             1397          (98) (a) "License" means authorization issued by the commissioner to engage in an
             1398      activity that is part of or related to the insurance business.
             1399          (b) "License" includes a certificate of authority issued to an insurer.
             1400          (99) (a) "Life insurance" means:
             1401          (i) insurance on a human life; and
             1402          (ii) insurance pertaining to or connected with human life.
             1403          (b) The business of life insurance includes:
             1404          (i) granting a death benefit;
             1405          (ii) granting an annuity benefit;
             1406          (iii) granting an endowment benefit;
             1407          (iv) granting an additional benefit in the event of death by accident;
             1408          (v) granting an additional benefit to safeguard the policy against lapse; and
             1409          (vi) providing an optional method of settlement of proceeds.
             1410          (100) "Limited license" means a license that:
             1411          (a) is issued for a specific product of insurance; and
             1412          (b) limits an individual or agency to transact only for that product or insurance.
             1413          (101) "Limited line credit insurance" includes the following forms of insurance:
             1414          (a) credit life;
             1415          (b) credit accident and health;
             1416          (c) credit property;
             1417          (d) credit unemployment;
             1418          (e) involuntary unemployment;
             1419          (f) mortgage life;
             1420          (g) mortgage guaranty;
             1421          (h) mortgage accident and health;
             1422          (i) guaranteed automobile protection; and


             1423          (j) another form of insurance offered in connection with an extension of credit that:
             1424          (i) is limited to partially or wholly extinguishing the credit obligation; and
             1425          (ii) the commissioner determines by rule should be designated as a form of limited line
             1426      credit insurance.
             1427          (102) "Limited line credit insurance producer" means a person who sells, solicits, or
             1428      negotiates one or more forms of limited line credit insurance coverage to an individual through
             1429      a master, corporate, group, or individual policy.
             1430          (103) "Limited line insurance" includes:
             1431          (a) bail bond;
             1432          (b) limited line credit insurance;
             1433          (c) legal expense insurance;
             1434          (d) motor club insurance;
             1435          (e) rental car-related insurance;
             1436          (f) travel insurance;
             1437          (g) crop insurance;
             1438          (h) self-service storage insurance; and
             1439          (i) another form of limited insurance that the commissioner determines by rule should
             1440      be designated a form of limited line insurance.
             1441          (104) "Limited lines authority" includes:
             1442          (a) the lines of insurance listed in Subsection (103); and
             1443          (b) a customer service representative.
             1444          (105) "Limited lines producer" means a person who sells, solicits, or negotiates limited
             1445      lines insurance.
             1446          (106) (a) "Long-term care insurance" means an insurance policy or rider advertised,
             1447      marketed, offered, or designated to provide coverage:
             1448          (i) in a setting other than an acute care unit of a hospital;
             1449          (ii) for not less than 12 consecutive months for a covered person on the basis of:
             1450          (A) expenses incurred;
             1451          (B) indemnity;
             1452          (C) prepayment; or
             1453          (D) another method;


             1454          (iii) for one or more necessary or medically necessary services that are:
             1455          (A) diagnostic;
             1456          (B) preventative;
             1457          (C) therapeutic;
             1458          (D) rehabilitative;
             1459          (E) maintenance; or
             1460          (F) personal care; and
             1461          (iv) that may be issued by:
             1462          (A) an insurer;
             1463          (B) a fraternal benefit society;
             1464          (C) (I) a nonprofit health hospital; and
             1465          (II) a medical service corporation;
             1466          (D) a prepaid health plan;
             1467          (E) a health maintenance organization; or
             1468          (F) an entity similar to the entities described in Subsections (106)(a)(iv)(A) through (E)
             1469      to the extent that the entity is otherwise authorized to issue life or health care insurance.
             1470          (b) "Long-term care insurance" includes:
             1471          (i) any of the following that provide directly or supplement long-term care insurance:
             1472          (A) a group or individual annuity or rider; or
             1473          (B) a life insurance policy or rider;
             1474          (ii) a policy or rider that provides for payment of benefits on the basis of:
             1475          (A) cognitive impairment; or
             1476          (B) functional capacity; or
             1477          (iii) a qualified long-term care insurance contract.
             1478          (c) "Long-term care insurance" does not include:
             1479          (i) a policy that is offered primarily to provide basic Medicare supplement coverage;
             1480          (ii) basic hospital expense coverage;
             1481          (iii) basic medical/surgical expense coverage;
             1482          (iv) hospital confinement indemnity coverage;
             1483          (v) major medical expense coverage;
             1484          (vi) income replacement or related asset-protection coverage;


             1485          (vii) accident only coverage;
             1486          (viii) coverage for a specified:
             1487          (A) disease; or
             1488          (B) accident;
             1489          (ix) limited benefit health coverage; or
             1490          (x) a life insurance policy that accelerates the death benefit to provide the option of a
             1491      lump sum payment:
             1492          (A) if the following are not conditioned on the receipt of long-term care:
             1493          (I) benefits; or
             1494          (II) eligibility; and
             1495          (B) the coverage is for one or more the following qualifying events:
             1496          (I) terminal illness;
             1497          (II) medical conditions requiring extraordinary medical intervention; or
             1498          (III) permanent institutional confinement.
             1499          (107) "Medical malpractice insurance" means insurance against legal liability incident
             1500      to the practice and provision of a medical service other than the practice and provision of a
             1501      dental service.
             1502          (108) "Member" means a person having membership rights in an insurance
             1503      corporation.
             1504          (109) "Minimum capital" or "minimum required capital" means the capital that must be
             1505      constantly maintained by a stock insurance corporation as required by statute.
             1506          (110) "Mortgage accident and health insurance" means insurance offered in connection
             1507      with an extension of credit that provides indemnity for payments coming due on a mortgage
             1508      while the debtor is disabled.
             1509          (111) "Mortgage guaranty insurance" means surety insurance under which a mortgagee
             1510      or other creditor is indemnified against losses caused by the default of a debtor.
             1511          (112) "Mortgage life insurance" means insurance on the life of a debtor in connection
             1512      with an extension of credit that pays if the debtor dies.
             1513          (113) "Motor club" means a person:
             1514          (a) licensed under:
             1515          (i) Chapter 5, Domestic Stock and Mutual Insurance Corporations;


             1516          (ii) Chapter 11, Motor Clubs; or
             1517          (iii) Chapter 14, Foreign Insurers; and
             1518          (b) that promises for an advance consideration to provide for a stated period of time
             1519      one or more:
             1520          (i) legal services under Subsection 31A-11-102 (1)(b);
             1521          (ii) bail services under Subsection 31A-11-102 (1)(c); or
             1522          (iii) (A) trip reimbursement;
             1523          (B) towing services;
             1524          (C) emergency road services;
             1525          (D) stolen automobile services;
             1526          (E) a combination of the services listed in Subsections (113)(b)(iii)(A) through (D); or
             1527          (F) other services given in Subsections 31A-11-102 (1)(b) through (f).
             1528          (114) "Mutual" means a mutual insurance corporation.
             1529          (115) "Network plan" means health care insurance:
             1530          (a) that is issued by an insurer; and
             1531          (b) under which the financing and delivery of medical care is provided, in whole or in
             1532      part, through a defined set of providers under contract with the insurer, including the financing
             1533      and delivery of an item paid for as medical care.
             1534          (116) "Nonparticipating" means a plan of insurance under which the insured is not
             1535      entitled to receive a dividend representing a share of the surplus of the insurer.
             1536          (117) "Ocean marine insurance" means insurance against loss of or damage to:
             1537          (a) ships or hulls of ships;
             1538          (b) goods, freight, cargoes, merchandise, effects, disbursements, profits, money,
             1539      securities, choses in action, evidences of debt, valuable papers, bottomry, respondentia
             1540      interests, or other cargoes in or awaiting transit over the oceans or inland waterways;
             1541          (c) earnings such as freight, passage money, commissions, or profits derived from
             1542      transporting goods or people upon or across the oceans or inland waterways; or
             1543          (d) a vessel owner or operator as a result of liability to employees, passengers, bailors,
             1544      owners of other vessels, owners of fixed objects, customs or other authorities, or other persons
             1545      in connection with maritime activity.
             1546          (118) "Order" means an order of the commissioner.


             1547          (119) "Outline of coverage" means a summary that explains an accident and health
             1548      insurance policy.
             1549          (120) "Participating" means a plan of insurance under which the insured is entitled to
             1550      receive a dividend representing a share of the surplus of the insurer.
             1551          (121) "Participation," as used in a health benefit plan, means a requirement relating to
             1552      the minimum percentage of eligible employees that must be enrolled in relation to the total
             1553      number of eligible employees of an employer reduced by each eligible employee who
             1554      voluntarily declines coverage under the plan because the employee:
             1555          (a) has other group health care insurance coverage; or
             1556          (b) receives:
             1557          (i) Medicare, under the Health Insurance for the Aged Act, Title XVIII of the Social
             1558      Security Amendments of 1965; or
             1559          (ii) another government health benefit.
             1560          (122) "Person" includes:
             1561          (a) an individual;
             1562          (b) a partnership;
             1563          (c) a corporation;
             1564          (d) an incorporated or unincorporated association;
             1565          (e) a joint stock company;
             1566          (f) a trust;
             1567          (g) a limited liability company;
             1568          (h) a reciprocal;
             1569          (i) a syndicate; or
             1570          (j) another similar entity or combination of entities acting in concert.
             1571          (123) "Personal lines insurance" means property and casualty insurance coverage sold
             1572      for primarily noncommercial purposes to:
             1573          (a) an individual; or
             1574          (b) a family.
             1575          (124) "Plan sponsor" is as defined in 29 U.S.C. Sec. 1002(16)(B).
             1576          (125) "Plan year" means:
             1577          (a) the year that is designated as the plan year in:


             1578          (i) the plan document of a group health plan; or
             1579          (ii) a summary plan description of a group health plan;
             1580          (b) if the plan document or summary plan description does not designate a plan year or
             1581      there is no plan document or summary plan description:
             1582          (i) the year used to determine deductibles or limits;
             1583          (ii) the policy year, if the plan does not impose deductibles or limits on a yearly basis;
             1584      or
             1585          (iii) the employer's taxable year if:
             1586          (A) the plan does not impose deductibles or limits on a yearly basis; and
             1587          (B) (I) the plan is not insured; or
             1588          (II) the insurance policy is not renewed on an annual basis; or
             1589          (c) in a case not described in Subsection (125)(a) or (b), the calendar year.
             1590          (126) (a) "Policy" means a document, including an attached endorsement or application
             1591      that:
             1592          (i) purports to be an enforceable contract; and
             1593          (ii) memorializes in writing some or all of the terms of an insurance contract.
             1594          (b) "Policy" includes a service contract issued by:
             1595          (i) a motor club under Chapter 11, Motor Clubs;
             1596          (ii) a service contract provided under Chapter 6a, Service Contracts; and
             1597          (iii) a corporation licensed under:
             1598          (A) Chapter 7, Nonprofit Health Service Insurance Corporations; or
             1599          (B) Chapter 8, Health Maintenance Organizations and Limited Health Plans.
             1600          (c) "Policy" does not include:
             1601          (i) a certificate under a group insurance contract; or
             1602          (ii) a document that does not purport to have legal effect.
             1603          (127) "Policyholder" means a person who controls a policy, binder, or oral contract by
             1604      ownership, premium payment, or otherwise.
             1605          (128) "Policy illustration" means a presentation or depiction that includes
             1606      nonguaranteed elements of a policy of life insurance over a period of years.
             1607          (129) "Policy summary" means a synopsis describing the elements of a life insurance
             1608      policy.


             1609          (130) "Preexisting condition," with respect to a health benefit plan:
             1610          (a) means a condition that was present before the effective date of coverage, whether or
             1611      not medical advice, diagnosis, care, or treatment was recommended or received before that day;
             1612      and
             1613          (b) does not include a condition indicated by genetic information unless an actual
             1614      diagnosis of the condition by a physician has been made.
             1615          (131) (a) "Premium" means the monetary consideration for an insurance policy.
             1616          (b) "Premium" includes, however designated:
             1617          (i) an assessment;
             1618          (ii) a membership fee;
             1619          (iii) a required contribution; or
             1620          (iv) monetary consideration.
             1621          (c) (i) "Premium" does not include consideration paid to a third party administrator for
             1622      the third party administrator's services.
             1623          (ii) "Premium" includes an amount paid by a third party administrator to an insurer for
             1624      insurance on the risks administered by the third party administrator.
             1625          (132) "Principal officers" for a corporation means the officers designated under
             1626      Subsection 31A-5-203 (3).
             1627          (133) "Proceeding" includes an action or special statutory proceeding.
             1628          (134) "Professional liability insurance" means insurance against legal liability incident
             1629      to the practice of a profession and provision of a professional service.
             1630          (135) (a) Except as provided in Subsection (135)(b), "property insurance" means
             1631      insurance against loss or damage to real or personal property of every kind and any interest in
             1632      that property:
             1633          (i) from all hazards or causes; and
             1634          (ii) against loss consequential upon the loss or damage including vehicle
             1635      comprehensive and vehicle physical damage coverages.
             1636          (b) "Property insurance" does not include:
             1637          (i) inland marine insurance; and
             1638          (ii) ocean marine insurance.
             1639          (136) "Qualified long-term care insurance contract" or "federally tax qualified


             1640      long-term care insurance contract" means:
             1641          (a) an individual or group insurance contract that meets the requirements of Section
             1642      7702B(b), Internal Revenue Code; or
             1643          (b) the portion of a life insurance contract that provides long-term care insurance:
             1644          (i) (A) by rider; or
             1645          (B) as a part of the contract; and
             1646          (ii) that satisfies the requirements of Sections 7702B(b) and (e), Internal Revenue
             1647      Code.
             1648          (137) "Qualified United States financial institution" means an institution that:
             1649          (a) is:
             1650          (i) organized under the laws of the United States or any state; or
             1651          (ii) in the case of a United States office of a foreign banking organization, licensed
             1652      under the laws of the United States or any state;
             1653          (b) is regulated, supervised, and examined by a United States federal or state authority
             1654      having regulatory authority over a bank or trust company; and
             1655          (c) meets the standards of financial condition and standing that are considered
             1656      necessary and appropriate to regulate the quality of a financial institution whose letters of credit
             1657      will be acceptable to the commissioner as determined by:
             1658          (i) the commissioner by rule; or
             1659          (ii) the Securities Valuation Office of the National Association of Insurance
             1660      Commissioners.
             1661          (138) (a) "Rate" means:
             1662          (i) the cost of a given unit of insurance; or
             1663          (ii) for property or casualty insurance, that cost of insurance per exposure unit either
             1664      expressed as:
             1665          (A) a single number; or
             1666          (B) a pure premium rate, adjusted before the application of individual risk variations
             1667      based on loss or expense considerations to account for the treatment of:
             1668          (I) expenses;
             1669          (II) profit; and
             1670          (III) individual insurer variation in loss experience.


             1671          (b) "Rate" does not include a minimum premium.
             1672          (139) (a) Except as provided in Subsection (139)(b), "rate service organization" means
             1673      a person who assists an insurer in rate making or filing by:
             1674          (i) collecting, compiling, and furnishing loss or expense statistics;
             1675          (ii) recommending, making, or filing rates or supplementary rate information; or
             1676          (iii) advising about rate questions, except as an attorney giving legal advice.
             1677          (b) "Rate service organization" does not mean:
             1678          (i) an employee of an insurer;
             1679          (ii) a single insurer or group of insurers under common control;
             1680          (iii) a joint underwriting group; or
             1681          (iv) an individual serving as an actuarial or legal consultant.
             1682          (140) "Rating manual" means any of the following used to determine initial and
             1683      renewal policy premiums:
             1684          (a) a manual of rates;
             1685          (b) a classification;
             1686          (c) a rate-related underwriting rule; and
             1687          (d) a rating formula that describes steps, policies, and procedures for determining
             1688      initial and renewal policy premiums.
             1689          (141) "Received by the department" means:
             1690          (a) the date delivered to and stamped received by the department, if delivered in
             1691      person;
             1692          (b) the post mark date, if delivered by mail;
             1693          (c) the delivery service's post mark or pickup date, if delivered by a delivery service;
             1694          (d) the received date recorded on an item delivered, if delivered by:
             1695          (i) facsimile;
             1696          (ii) email; or
             1697          (iii) another electronic method; or
             1698          (e) a date specified in:
             1699          (i) a statute;
             1700          (ii) a rule; or
             1701          (iii) an order.


             1702          (142) "Reciprocal" or "interinsurance exchange" means an unincorporated association
             1703      of persons:
             1704          (a) operating through an attorney-in-fact common to all of the persons; and
             1705          (b) exchanging insurance contracts with one another that provide insurance coverage
             1706      on each other.
             1707          (143) "Reinsurance" means an insurance transaction where an insurer, for
             1708      consideration, transfers any portion of the risk it has assumed to another insurer. In referring to
             1709      reinsurance transactions, this title sometimes refers to:
             1710          (a) the insurer transferring the risk as the "ceding insurer"; and
             1711          (b) the insurer assuming the risk as the:
             1712          (i) "assuming insurer"; or
             1713          (ii) "assuming reinsurer."
             1714          (144) "Reinsurer" means a person licensed in this state as an insurer with the authority
             1715      to assume reinsurance.
             1716          (145) "Residential dwelling liability insurance" means insurance against liability
             1717      resulting from or incident to the ownership, maintenance, or use of a residential dwelling that is
             1718      a detached single family residence or multifamily residence up to four units.
             1719          (146) (a) "Retrocession" means reinsurance with another insurer of a liability assumed
             1720      under a reinsurance contract.
             1721          (b) A reinsurer "retrocedes" when the reinsurer reinsures with another insurer part of a
             1722      liability assumed under a reinsurance contract.
             1723          (147) "Rider" means an endorsement to:
             1724          (a) an insurance policy; or
             1725          (b) an insurance certificate.
             1726          (148) (a) "Security" means a:
             1727          (i) note;
             1728          (ii) stock;
             1729          (iii) bond;
             1730          (iv) debenture;
             1731          (v) evidence of indebtedness;
             1732          (vi) certificate of interest or participation in a profit-sharing agreement;


             1733          (vii) collateral-trust certificate;
             1734          (viii) preorganization certificate or subscription;
             1735          (ix) transferable share;
             1736          (x) investment contract;
             1737          (xi) voting trust certificate;
             1738          (xii) certificate of deposit for a security;
             1739          (xiii) certificate of interest of participation in an oil, gas, or mining title or lease or in
             1740      payments out of production under such a title or lease;
             1741          (xiv) commodity contract or commodity option;
             1742          (xv) certificate of interest or participation in, temporary or interim certificate for,
             1743      receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed
             1744      in Subsections (148)(a)(i) through (xiv); or
             1745          (xvi) another interest or instrument commonly known as a security.
             1746          (b) "Security" does not include:
             1747          (i) any of the following under which an insurance company promises to pay money in a
             1748      specific lump sum or periodically for life or some other specified period:
             1749          (A) insurance;
             1750          (B) an endowment policy; or
             1751          (C) an annuity contract; or
             1752          (ii) a burial certificate or burial contract.
             1753          (149) "Secondary medical condition" means a complication related to an exclusion
             1754      from coverage in accident and health insurance.
             1755          (150) "Self-insurance" means an arrangement under which a person provides for
             1756      spreading its own risks by a systematic plan.
             1757          (a) Except as provided in this Subsection (150), "self-insurance" does not include an
             1758      arrangement under which a number of persons spread their risks among themselves.
             1759          (b) "Self-insurance" includes:
             1760          (i) an arrangement by which a governmental entity undertakes to indemnify an
             1761      employee for liability arising out of the employee's employment; and
             1762          (ii) an arrangement by which a person with a managed program of self-insurance and
             1763      risk management undertakes to indemnify its affiliates, subsidiaries, directors, officers, or


             1764      employees for liability or risk that is related to the relationship or employment.
             1765          (c) "Self-insurance" does not include an arrangement with an independent contractor.
             1766          (151) "Sell" means to exchange a contract of insurance:
             1767          (a) by any means;
             1768          (b) for money or its equivalent; and
             1769          (c) on behalf of an insurance company.
             1770          (152) "Short-term care insurance" means an insurance policy or rider advertised,
             1771      marketed, offered, or designed to provide coverage that is similar to long-term care insurance,
             1772      but that provides coverage for less than 12 consecutive months for each covered person.
             1773          (153) "Significant break in coverage" means a period of 63 consecutive days during
             1774      each of which an individual does not have creditable coverage.
             1775          (154) "Small employer," in connection with a health benefit plan, means an employer
             1776      who, with respect to a calendar year and to a plan year:
             1777          (a) employed an average of at least two employees but not more than 50 eligible
             1778      employees on each business day during the preceding calendar year; and
             1779          (b) employs at least two employees on the first day of the plan year.
             1780          (155) "Special enrollment period," in connection with a health benefit plan, has the
             1781      same meaning as provided in federal regulations adopted pursuant to the Health Insurance
             1782      Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936.
             1783          (156) (a) "Subsidiary" of a person means an affiliate controlled by that person either
             1784      directly or indirectly through one or more affiliates or intermediaries.
             1785          (b) "Wholly owned subsidiary" of a person is a subsidiary of which all of the voting
             1786      shares are owned by that person either alone or with its affiliates, except for the minimum
             1787      number of shares the law of the subsidiary's domicile requires to be owned by directors or
             1788      others.
             1789          (157) Subject to Subsection (83)(b), "surety insurance" includes:
             1790          (a) a guarantee against loss or damage resulting from the failure of a principal to pay or
             1791      perform the principal's obligations to a creditor or other obligee;
             1792          (b) bail bond insurance; and
             1793          (c) fidelity insurance.
             1794          (158) (a) "Surplus" means the excess of assets over the sum of paid-in capital and


             1795      liabilities.
             1796          (b) (i) "Permanent surplus" means the surplus of a mutual insurer that is designated by
             1797      the insurer as permanent.
             1798          (ii) Sections 31A-5-211 , 31A-7-201 , 31A-8-209 , 31A-9-209 , and 31A-14-209 require
             1799      that mutuals doing business in this state maintain specified minimum levels of permanent
             1800      surplus.
             1801          (iii) Except for assessable mutuals, the minimum permanent surplus requirement is the
             1802      same as the minimum required capital requirement that applies to stock insurers.
             1803          (c) "Excess surplus" means:
             1804          (i) for a life insurer, accident and health insurer, health organization, or property and
             1805      casualty insurer as defined in Section 31A-17-601 , the lesser of:
             1806          (A) that amount of an insurer's or health organization's total adjusted capital that
             1807      exceeds the product of:
             1808          (I) 2.5; and
             1809          (II) the sum of the insurer's or health organization's minimum capital or permanent
             1810      surplus required under Section 31A-5-211 , 31A-9-209 , or 31A-14-205 ; or
             1811          (B) that amount of an insurer's or health organization's total adjusted capital that
             1812      exceeds the product of:
             1813          (I) 3.0; and
             1814          (II) the authorized control level RBC as defined in Subsection 31A-17-601 (8)(a); and
             1815          (ii) for a monoline mortgage guaranty insurer, financial guaranty insurer, or title insurer
             1816      that amount of an insurer's paid-in-capital and surplus that exceeds the product of:
             1817          (A) 1.5; and
             1818          (B) the insurer's total adjusted capital required by Subsection 31A-17-609 (1).
             1819          (159) "Third party administrator" or "administrator" means a person who collects
             1820      charges or premiums from, or who, for consideration, adjusts or settles claims of residents of
             1821      the state in connection with insurance coverage, annuities, or service insurance coverage,
             1822      except:
             1823          (a) a union on behalf of its members;
             1824          (b) a person administering a:
             1825          (i) pension plan subject to the federal Employee Retirement Income Security Act of


             1826      1974;
             1827          (ii) governmental plan as defined in Section 414(d), Internal Revenue Code; or
             1828          (iii) nonelecting church plan as described in Section 410(d), Internal Revenue Code;
             1829          (c) an employer on behalf of the employer's employees or the employees of one or
             1830      more of the subsidiary or affiliated corporations of the employer;
             1831          (d) an insurer licensed under Chapter 5, 7, 8, 9, or 14, but only for a line of insurance
             1832      for which the insurer holds a license in this state; or
             1833          (e) a person:
             1834          (i) licensed or exempt from licensing under:
             1835          (A) Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and
             1836      Reinsurance Intermediaries; or
             1837          (B) Chapter 26, Insurance Adjusters; and
             1838          (ii) whose activities are limited to those authorized under the license the person holds
             1839      or for which the person is exempt.
             1840          (160) "Title insurance" means the insuring, guaranteeing, or indemnifying of an owner
             1841      of real or personal property or the holder of liens or encumbrances on that property, or others
             1842      interested in the property against loss or damage suffered by reason of liens or encumbrances
             1843      upon, defects in, or the unmarketability of the title to the property, or invalidity or
             1844      unenforceability of any liens or encumbrances on the property.
             1845          (161) "Total adjusted capital" means the sum of an insurer's or health organization's
             1846      statutory capital and surplus as determined in accordance with:
             1847          (a) the statutory accounting applicable to the annual financial statements required to be
             1848      filed under Section 31A-4-113 ; and
             1849          (b) another item provided by the RBC instructions, as RBC instructions is defined in
             1850      Section 31A-17-601 .
             1851          (162) (a) "Trustee" means "director" when referring to the board of directors of a
             1852      corporation.
             1853          (b) "Trustee," when used in reference to an employee welfare fund, means an
             1854      individual, firm, association, organization, joint stock company, or corporation, whether acting
             1855      individually or jointly and whether designated by that name or any other, that is charged with
             1856      or has the overall management of an employee welfare fund.


             1857          (163) (a) "Unauthorized insurer," "unadmitted insurer," or "nonadmitted insurer"
             1858      means an insurer:
             1859          (i) not holding a valid certificate of authority to do an insurance business in this state;
             1860      or
             1861          (ii) transacting business not authorized by a valid certificate.
             1862          (b) "Admitted insurer" or "authorized insurer" means an insurer:
             1863          (i) holding a valid certificate of authority to do an insurance business in this state; and
             1864          (ii) transacting business as authorized by a valid certificate.
             1865          (164) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.
             1866          (165) "Vehicle liability insurance" means insurance against liability resulting from or
             1867      incident to ownership, maintenance, or use of a land vehicle or aircraft, exclusive of a vehicle
             1868      comprehensive or vehicle physical damage coverage under Subsection (135).
             1869          (166) "Voting security" means a security with voting rights, and includes a security
             1870      convertible into a security with a voting right associated with the security.
             1871          (167) "Waiting period" for a health benefit plan means the period that must pass before
             1872      coverage for an individual, who is otherwise eligible to enroll under the terms of the health
             1873      benefit plan, can become effective.
             1874          (168) "Workers' compensation insurance" means:
             1875          (a) insurance for indemnification of an employer against liability for compensation
             1876      based on:
             1877          (i) a compensable accidental injury; and
             1878          (ii) occupational disease disability;
             1879          (b) employer's liability insurance incidental to workers' compensation insurance and
             1880      written in connection with workers' compensation insurance; and
             1881          (c) insurance assuring to a person entitled to workers' compensation benefits the
             1882      compensation provided by law.
             1883          Section 12. Section 31A-2a-101 is enacted to read:
             1884     
CHAPTER 2a. DIVISION OF INSURANCE ACT

             1885     
Part 1. General Provisions

             1886          31A-2a-101. Title.
             1887          This chapter is known as the "Division of Insurance Act."


             1888          Section 13. Section 31A-2a-102 is enacted to read:
             1889          31A-2a-102. Definitions.
             1890          As used in this chapter:
             1891          (1) "Commissioner" means the commissioner of the Division of Insurance appointed in
             1892      accordance with Section 31A-2a-202 .
             1893          (2) "Department" means the Department of Commerce created in Section 13-1-2 .
             1894          (3) "Division" means the Division of Insurance created in Section 31A-2a-201 .
             1895          (4) "Executive director" means the executive director of the Department of Commerce
             1896      appointed under Section 13-1-3 .
             1897          Section 14. Section 31A-2a-103 is enacted to read:
             1898          31A-2a-103. Transition provisions.
             1899          (1) As used in this section:
             1900          (a) "Enacting legislation" means this bill.
             1901          (b) "Previous agency" means the Utah Insurance Department that is terminated
             1902      effective July 1, 2011.
             1903          (c) "Transition period" means the period:
             1904          (i) beginning July 1, 2011; and
             1905          (ii) ending the effective date of legislation terminating the transition period.
             1906          (2) (a) It is the intent of the Legislature that the enacting legislation's only substantive
             1907      change is to consolidate the operations of the previous agency into the Department of
             1908      Commerce.
             1909          (b) To accomplish the intent described in Subsection (2)(a), and notwithstanding the
             1910      other provisions of this title:
             1911          (i) the governor may not appoint a commissioner as provided in Section 31A-2-102 ,
             1912      repealed by the enacting legislation;
             1913          (ii) the executive director shall appoint the commissioner of the Division of Insurance
             1914      in accordance with Section 31A-2a-202 ;
             1915          (iii) effective July 1, 2011, the department shall administer this title, in accordance
             1916      with this section;
             1917          (iv) a requirement in this title for an officer or employee of the previous agency to take
             1918      an oath as a condition for service does not apply to the department; and


             1919          (v) if an ambiguity arises as to how to interpret this title, as modified by this section,
             1920      the executive director may provide for the implementation of this title in a manner consistent
             1921      with the intent described in Subsection (2)(a).
             1922          (3) (a) The previous agency shall assist the executive director with consolidation into
             1923      the department effective July 1, 2011.
             1924          (b) A previous agency shall systematically transfer the powers and duties granted to the
             1925      previous agency under this title to the department effective July 1, 2011, in accordance with the
             1926      executive director's plan developed in accordance with this section.
             1927          (c) Notwithstanding Section 63J-1-410 , records, personnel, property, equipment,
             1928      grants, unexpended and unexpired balances of appropriations, allocations and other funds used,
             1929      held, employed, available or to be made available to the previous agency for the activities,
             1930      powers, duties, functions, and responsibilities transferred to the department by the enacting
             1931      legislation are transferred to the department at the direction of the executive director and in
             1932      accordance with this section.
             1933          (4) (a) The executive director shall serve as the transition director to provide executive
             1934      direction and supervision for the implementation of the transfer of the powers and duties of the
             1935      previous agency to the department in accordance with this section.
             1936          (b) The executive director shall:
             1937          (i) initiate coordination with the chief executive officer of the previous agency to
             1938      facilitate the transfer of programs, positions, and administrative functions; and
             1939          (ii) develop memoranda of record identifying any pending settlements, issues of
             1940      compliance with applicable federal and state laws and regulations, or other obligations to be
             1941      resolved related to the authority to be transferred.
             1942          (c) The executive director shall administer the enacting legislation in a manner that
             1943      promotes efficient administration and shall make internal organizational changes as necessary
             1944      to complete the realignment of responsibilities required by the enacting legislation.
             1945          (d) The executive director may request the assistance of the previous agency with
             1946      respect to personnel, budgeting, procurement, information systems, and other management
             1947      related functions, and the previous agency shall provide the requested assistance.
             1948          (5) The rules, orders, contracts, grants, and agreements relating to the functions of the
             1949      department lawfully adopted before July 1, 2011, by the previous agency shall continue to be


             1950      effective until revised, amended, or rescinded.
             1951          (6) A suit, action, or other proceeding lawfully commenced by, against, or before the
             1952      previous agency does not abate by reason of the enacting legislation.
             1953          (7) (a) The executive director shall study the items listed in Subsection (7)(b), and
             1954      report to the Business and Labor Interim Committee by no later than its November interim
             1955      committee meeting regarding the results of the study and the need, if any, for legislation.
             1956          (b) The study items to be studied by the executive director include the following:
             1957          (i) to what extent, if any, the Division of Insurance within the department needs to be
             1958      restructured or consolidated;
             1959          (ii) how best to combine from the previous agency the following:
             1960          (A) human resources functions;
             1961          (B) information technology;
             1962          (C) purchasing;
             1963          (D) administrative functions;
             1964          (E) management functions; and
             1965          (F) personnel; and
             1966          (iii) whether a position of commissioner of a division should be modified to be a
             1967      deputy director.
             1968          (8) (a) The Business and Labor Interim Committee may prepare legislation by no later
             1969      than its November interim committee meeting for consideration in the 2012 General Session
             1970      that modifies this title to reflect the consolidation enacted by the enacting legislation.
             1971          (b) In preparing the legislation required by Subsection (8)(a), the Business and Labor
             1972      Interim Committee shall consult with the executive director.
             1973          Section 15. Section 31A-2a-201 is enacted to read:
             1974     
Part 2. Division of Insurance Created

             1975          31A-2a-201. Division of Insurance -- Creation.
             1976          (1) There is created within the Department of Commerce the Division of Insurance.
             1977          (2) To the extent delegated to it by the executive director, the division shall administer
             1978      and enforce this title.
             1979          Section 16. Section 31A-2a-202 is enacted to read:
             1980          31A-2a-202. Commissioner.


             1981          (1) To the extent delegated by the executive director, the chief administrative officer of
             1982      the division is the commissioner, who shall serve as the executive and administrative head of
             1983      the division.
             1984          (2) (a) The executive director shall appoint the commissioner with the concurrence of
             1985      the governor.
             1986          (b) The commissioner shall be experienced in administration and possess such
             1987      additional qualifications as determined by the executive director.
             1988          (c) The executive director may remove the commissioner from that position at the will
             1989      of the executive director.
             1990          (d) The commissioner shall receive compensation as provided by Title 67, Chapter 19,
             1991      Utah State Personnel Management Act.
             1992          Section 17. Section 31A-2a-203 is enacted to read:
             1993          31A-2a-203. Employment of staff.
             1994          The commissioner, with the approval of the executive director, may employ necessary
             1995      staff, including specialists and professionals, to assist the commissioner in performing the
             1996      duties, functions, and responsibilities of the division.
             1997          Section 18. Section 31A-2a-204 is enacted to read:
             1998          31A-2a-204. Money collected under this title.
             1999          Subsection 13-1-2 (3) does not apply to money collected under this title.
             2000          Section 19. Section 34A-2-103 is amended to read:
             2001           34A-2-103. Employers enumerated and defined -- Regularly employed --
             2002      Statutory employers.
             2003          (1) (a) The state, and each county, city, town, and school district in the state are
             2004      considered employers under this chapter and Chapter 3, Utah Occupational Disease Act.
             2005          (b) For the purposes of the exclusive remedy in this chapter and Chapter 3, Utah
             2006      Occupational Disease Act prescribed in Sections 34A-2-105 and 34A-3-102 , the state is
             2007      considered to be a single employer and includes any office, department, agency, authority,
             2008      commission, board, institution, hospital, college, university, or other instrumentality of the
             2009      state.
             2010          (2) (a) Except as provided in Subsection (4), each person, including each public utility
             2011      and each independent contractor, who regularly employs one or more workers or operatives in


             2012      the same business, or in or about the same establishment, under any contract of hire, express or
             2013      implied, oral or written, is considered an employer under this chapter and Chapter 3, Utah
             2014      Occupational Disease Act.
             2015          (b) As used in this Subsection (2):
             2016          (i) "Independent contractor" means any person engaged in the performance of any work
             2017      for another who, while so engaged, is:
             2018          (A) independent of the employer in all that pertains to the execution of the work;
             2019          (B) not subject to the routine rule or control of the employer;
             2020          (C) engaged only in the performance of a definite job or piece of work; and
             2021          (D) subordinate to the employer only in effecting a result in accordance with the
             2022      employer's design.
             2023          (ii) "Regularly" includes all employments in the usual course of the trade, business,
             2024      profession, or occupation of the employer, whether continuous throughout the year or for only a
             2025      portion of the year.
             2026          (3) (a) The client under a professional employer organization agreement regulated
             2027      under Title 31A, Chapter 40, Professional Employer Organization Licensing Act:
             2028          (i) is considered the employer of a covered employee; and
             2029          (ii) subject to Section 31A-40-209 , shall secure workers' compensation benefits for a
             2030      covered employee by complying with Subsection 34A-2-201 (1) or (2) and commission rules.
             2031          (b) The division shall promptly inform the [Insurance Department] Department of
             2032      Commerce, which may delegate this function to the Division of Insurance, if the division has
             2033      reason to believe that a professional employer organization is not in compliance with
             2034      Subsection 34A-2-201 (1) or (2) and commission rules.
             2035          (4) A domestic employer who does not employ one employee or more than one
             2036      employee at least 40 hours per week is not considered an employer under this chapter and
             2037      Chapter 3, Utah Occupational Disease Act.
             2038          (5) (a) As used in this Subsection (5):
             2039          (i) (A) "agricultural employer" means a person who employs agricultural labor as
             2040      defined in Subsections 35A-4-206 (1) and (2) and does not include employment as provided in
             2041      Subsection 35A-4-206 (3); and
             2042          (B) notwithstanding Subsection (5)(a)(i)(A), only for purposes of determining who is a


             2043      member of the employer's immediate family under Subsection (5)(a)(ii), if the agricultural
             2044      employer is a corporation, partnership, or other business entity, "agricultural employer" means
             2045      an officer, director, or partner of the business entity;
             2046          (ii) "employer's immediate family" means:
             2047          (A) an agricultural employer's:
             2048          (I) spouse;
             2049          (II) grandparent;
             2050          (III) parent;
             2051          (IV) sibling;
             2052          (V) child;
             2053          (VI) grandchild;
             2054          (VII) nephew; or
             2055          (VIII) niece;
             2056          (B) a spouse of any person provided in Subsection (5)(a)(ii)(A)(II) through (VIII); or
             2057          (C) an individual who is similar to those listed in Subsections (5)(a)(ii)(A) or (B) as
             2058      defined by rules of the commission; and
             2059          (iii) "nonimmediate family" means a person who is not a member of the employer's
             2060      immediate family.
             2061          (b) For purposes of this chapter and Chapter 3, Utah Occupational Disease Act, an
             2062      agricultural employer is not considered an employer of a member of the employer's immediate
             2063      family.
             2064          (c) For purposes of this chapter and Chapter 3, Utah Occupational Disease Act, an
             2065      agricultural employer is not considered an employer of a nonimmediate family employee if:
             2066          (i) for the previous calendar year the agricultural employer's total annual payroll for all
             2067      nonimmediate family employees was less than $8,000; or
             2068          (ii) (A) for the previous calendar year the agricultural employer's total annual payroll
             2069      for all nonimmediate family employees was equal to or greater than $8,000 but less than
             2070      $50,000; and
             2071          (B) the agricultural employer maintains insurance that covers job-related injuries of the
             2072      employer's nonimmediate family employees in at least the following amounts:
             2073          (I) $300,000 liability insurance, as defined in Section 31A-1-301 ; and


             2074          (II) $5,000 for health care benefits similar to benefits under health care insurance as
             2075      defined in Section 31A-1-301 .
             2076          (d) For purposes of this chapter and Chapter 3, Utah Occupational Disease Act, an
             2077      agricultural employer is considered an employer of a nonimmediate family employee if:
             2078          (i) for the previous calendar year the agricultural employer's total annual payroll for all
             2079      nonimmediate family employees is equal to or greater than $50,000; or
             2080          (ii) (A) for the previous year the agricultural employer's total payroll for nonimmediate
             2081      family employees was equal to or exceeds $8,000 but is less than $50,000; and
             2082          (B) the agricultural employer fails to maintain the insurance required under Subsection
             2083      (5)(c)(ii)(B).
             2084          (6) An employer of agricultural laborers or domestic servants who is not considered an
             2085      employer under this chapter and Chapter 3, Utah Occupational Disease Act, may come under
             2086      this chapter and Chapter 3, Utah Occupational Disease Act, by complying with:
             2087          (a) this chapter and Chapter 3, Utah Occupational Disease Act; and
             2088          (b) the rules of the commission.
             2089          (7) (a) (i) As used in this Subsection (7)(a), "employer" includes any of the following
             2090      persons that procures work to be done by a contractor notwithstanding whether or not the
             2091      person directly employs a person:
             2092          (A) a sole proprietorship;
             2093          (B) a corporation;
             2094          (C) a partnership;
             2095          (D) a limited liability company; or
             2096          (E) a person similar to one described in Subsections (7)(a)(i)(A) through (D).
             2097          (ii) If an employer procures any work to be done wholly or in part for the employer by
             2098      a contractor over whose work the employer retains supervision or control, and this work is a
             2099      part or process in the trade or business of the employer, the contractor, all persons employed by
             2100      the contractor, all subcontractors under the contractor, and all persons employed by any of
             2101      these subcontractors, are considered employees of the original employer for the purposes of
             2102      this chapter and Chapter 3, Utah Occupational Disease Act.
             2103          (b) Any person who is engaged in constructing, improving, repairing, or remodelling a
             2104      residence that the person owns or is in the process of acquiring as the person's personal


             2105      residence may not be considered an employee or employer solely by operation of Subsection
             2106      (7)(a).
             2107          (c) A partner in a partnership or an owner of a sole proprietorship is not considered an
             2108      employee under Subsection (7)(a) if the employer who procures work to be done by the
             2109      partnership or sole proprietorship obtains and relies on either:
             2110          (i) a valid certification of the partnership's or sole proprietorship's compliance with
             2111      Section 34A-2-201 indicating that the partnership or sole proprietorship secured the payment of
             2112      workers' compensation benefits pursuant to Section 34A-2-201 ; or
             2113          (ii) if a partnership or sole proprietorship with no employees other than a partner of the
             2114      partnership or owner of the sole proprietorship, a workers' compensation coverage waiver
             2115      issued by an insurer pursuant to Section 31A-22-1011 stating that:
             2116          (A) the partnership or sole proprietorship is customarily engaged in an independently
             2117      established trade, occupation, profession, or business; and
             2118          (B) the partner or owner personally waives the partner's or owner's entitlement to the
             2119      benefits of this chapter and Chapter 3, Utah Occupational Disease Act, in the operation of the
             2120      partnership or sole proprietorship.
             2121          (d) A director or officer of a corporation is not considered an employee under
             2122      Subsection (7)(a) if the director or officer is excluded from coverage under Subsection
             2123      34A-2-104 (4).
             2124          (e) A contractor or subcontractor is not an employee of the employer under Subsection
             2125      (7)(a), if the employer who procures work to be done by the contractor or subcontractor obtains
             2126      and relies on either:
             2127          (i) a valid certification of the contractor's or subcontractor's compliance with Section
             2128      34A-2-201 ; or
             2129          (ii) if a partnership, corporation, or sole proprietorship with no employees other than a
             2130      partner of the partnership, officer of the corporation, or owner of the sole proprietorship, a
             2131      workers' compensation coverage waiver issued by an insurer pursuant to Section 31A-22-1011
             2132      stating that:
             2133          (A) the partnership, corporation, or sole proprietorship is customarily engaged in an
             2134      independently established trade, occupation, profession, or business; and
             2135          (B) the partner, corporate officer, or owner personally waives the partner's, corporate


             2136      officer's, or owner's entitlement to the benefits of this chapter and Chapter 3, Utah
             2137      Occupational Disease Act, in the operation of the partnership's, corporation's, or sole
             2138      proprietorship's enterprise under a contract of hire for services.
             2139          (f) (i) For purposes of this Subsection (7)(f), "eligible employer" means a person who:
             2140          (A) is an employer; and
             2141          (B) procures work to be done wholly or in part for the employer by a contractor,
             2142      including:
             2143          (I) all persons employed by the contractor;
             2144          (II) all subcontractors under the contractor; and
             2145          (III) all persons employed by any of these subcontractors.
             2146          (ii) Notwithstanding the other provisions in this Subsection (7), if the conditions of
             2147      Subsection (7)(f)(iii) are met, an eligible employer is considered an employer for purposes of
             2148      Section 34A-2-105 of the contractor, subcontractor, and all persons employed by the contractor
             2149      or subcontractor described in Subsection (7)(f)(i)(B).
             2150          (iii) Subsection (7)(f)(ii) applies if the eligible employer:
             2151          (A) under Subsection (7)(a) is liable for and pays workers' compensation benefits as an
             2152      original employer under Subsection (7)(a) because the contractor or subcontractor fails to
             2153      comply with Section 34A-2-201 ;
             2154          (B) (I) secures the payment of workers' compensation benefits for the contractor or
             2155      subcontractor pursuant to Section 34A-2-201 ;
             2156          (II) procures work to be done that is part or process of the trade or business of the
             2157      eligible employer; and
             2158          (III) does the following with regard to a written workplace accident and injury
             2159      reduction program that meets the requirements of Subsection 34A-2-111 (3)(d):
             2160          (Aa) adopts the workplace accident and injury reduction program;
             2161          (Bb) posts the workplace accident and injury reduction program at the work site at
             2162      which the eligible employer procures work; and
             2163          (Cc) enforces the workplace accident and injury reduction program according to the
             2164      terms of the workplace accident and injury reduction program; or
             2165          (C) (I) obtains and relies on:
             2166          (Aa) a valid certification described in Subsection (7)(c)(i) or (7)(e)(i);


             2167          (Bb) a workers' compensation coverage waiver described in Subsection (7)(c)(ii) or
             2168      (7)(e)(ii); or
             2169          (Cc) proof that a director or officer is excluded from coverage under Subsection
             2170      34A-2-104 (4);
             2171          (II) is liable under Subsection (7)(a) for the payment of workers' compensation benefits
             2172      if the contractor or subcontractor fails to comply with Section 34A-2-201 ;
             2173          (III) procures work to be done that is part or process in the trade or business of the
             2174      eligible employer; and
             2175          (IV) does the following with regard to a written workplace accident and injury
             2176      reduction program that meets the requirements of Subsection 34A-2-111 (3)(d):
             2177          (Aa) adopts the workplace accident and injury reduction program;
             2178          (Bb) posts the workplace accident and injury reduction program at the work site at
             2179      which the eligible employer procures work; and
             2180          (Cc) enforces the workplace accident and injury reduction program according to the
             2181      terms of the workplace accident and injury reduction program.
             2182          Section 20. Section 34A-2-107 is amended to read:
             2183           34A-2-107. Appointment of workers' compensation advisory council --
             2184      Composition -- Terms of members -- Duties -- Compensation.
             2185          (1) The commissioner shall appoint a workers' compensation advisory council
             2186      composed of:
             2187          (a) the following voting members:
             2188          (i) five employer representatives; and
             2189          (ii) five employee representatives; and
             2190          (b) the following nonvoting members:
             2191          (i) a representative of the Workers' Compensation Fund;
             2192          (ii) a representative of a private insurance carrier;
             2193          (iii) a representative of health care providers;
             2194          (iv) the [Utah insurance commissioner or the insurance commissioner's] executive
             2195      director of the Department of Commerce, or the executive director's designee; and
             2196          (v) the commissioner or the commissioner's designee.
             2197          (2) Employers and employees shall consider nominating members of groups who


             2198      historically may have been excluded from the council, such as women, minorities, and
             2199      individuals with disabilities.
             2200          (3) (a) Except as required by Subsection (3)(b), as terms of current council members
             2201      expire, the commissioner shall appoint each new member or reappointed member to a two-year
             2202      term beginning July 1 and ending June 30.
             2203          (b) Notwithstanding the requirements of Subsection (3)(a), the commissioner shall, at
             2204      the time of appointment or reappointment, adjust the length of terms to ensure that the terms of
             2205      council members are staggered so that approximately half of the council is appointed every two
             2206      years.
             2207          (4) (a) When a vacancy occurs in the membership for any reason, the replacement shall
             2208      be appointed for the unexpired term.
             2209          (b) The commissioner shall terminate the term of a council member who ceases to be
             2210      representative as designated by the member's original appointment.
             2211          (5) (a) The council shall confer at least quarterly for the purpose of advising the
             2212      commission, the division, and the Legislature on:
             2213          (i) the Utah workers' compensation and occupational disease laws;
             2214          (ii) the administration of the laws described in Subsection (5)(a)(i);
             2215          (iii) rules related to the laws described in Subsection (5)(a)(i); and
             2216          (iv) advising the Legislature in accordance with Subsection (5)(b).
             2217          (b) (i) The council and the commission shall jointly study during 2009 the premium
             2218      assessment under Section 59-9-101 on an admitted insurer writing workers' compensation
             2219      insurance in this state and on a self-insured employer under Section 34A-2-202 as to:
             2220          (A) whether or not the premium assessment should be changed; or
             2221          (B) whether or not changes should be made to how the premium assessment is used.
             2222          (ii) The council and commission shall jointly report the results of the study described in
             2223      this Subsection (5)(b) to the Business and Labor Interim Committee by no later than the 2009
             2224      November interim meeting.
             2225          (6) Regarding workers' compensation, rehabilitation, and reemployment of employees
             2226      who are disabled because of an industrial injury or occupational disease the council shall:
             2227          (a) offer advice on issues requested by:
             2228          (i) the commission;


             2229          (ii) the division; and
             2230          (iii) the Legislature; and
             2231          (b) make recommendations to:
             2232          (i) the commission; and
             2233          (ii) the division.
             2234          (7) The commissioner or the commissioner's designee shall serve as the chair of the
             2235      council and call the necessary meetings.
             2236          (8) The commission shall provide staff support to the council.
             2237          (9) A member may not receive compensation or benefits for the member's service, but
             2238      may receive per diem and travel expenses in accordance with:
             2239          (a) Section 63A-3-106 ;
             2240          (b) Section 63A-3-107 ; and
             2241          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
             2242      63A-3-107 .
             2243          Section 21. Section 34A-2-202 is amended to read:
             2244           34A-2-202. Assessment on self-insured employers including the state, counties,
             2245      cities, towns, or school districts paying compensation direct.
             2246          (1) (a) (i) A self-insured employer, including a county, city, town, or school district,
             2247      shall pay annually, on or before March 31, an assessment in accordance with this section and
             2248      rules made by the commission under this section.
             2249          (ii) For purposes of this section, "self-insured employer" is as defined in Section
             2250      34A-2-201.5 , except it includes the state if the state self-insures under Section 34A-2-203 .
             2251          (b) The assessment required by Subsection (1)(a) is:
             2252          (i) to be collected by the State Tax Commission;
             2253          (ii) paid by the State Tax Commission into the state treasury as provided in Subsection
             2254      59-9-101 (2); and
             2255          (iii) subject to the offset provided in Section 34A-2-202.5 .
             2256          (c) The assessment under Subsection (1)(a) shall be based on a total calculated
             2257      premium multiplied by the premium assessment rate established pursuant to Subsection
             2258      59-9-101 (2).
             2259          (d) The total calculated premium, for purposes of calculating the assessment under


             2260      Subsection (1)(a), shall be calculated by:
             2261          (i) multiplying the total of the standard premium for each class code calculated in
             2262      Subsection (1)(e) by the self-insured employer's experience modification factor; and
             2263          (ii) multiplying the total under Subsection (1)(d)(i) by a safety factor determined under
             2264      Subsection (1)(g).
             2265          (e) A standard premium shall be calculated by:
             2266          (i) multiplying the prospective loss cost for the year being considered, as filed with the
             2267      [insurance department] Department of Commerce under Title 31A, Insurance Code, which may
             2268      delegate this function to the Division of Insurance, pursuant to Section 31A-19a-406 , for each
             2269      applicable class code by 1.10 to determine the manual rate for each class code; and
             2270          (ii) multiplying the manual rate for each class code under Subsection (1)(e)(i) by each
             2271      $100 of the self-insured employer's covered payroll for each class code.
             2272          (f) (i) Each self-insured employer paying compensation direct shall annually obtain the
             2273      experience modification factor required in Subsection (1)(d)(i) by using:
             2274          (A) the rate service organization designated by the [insurance commissioner] executive
             2275      director of the Department of Commerce, or the executive director's designee, in Section
             2276      31A-19a-404 ; or
             2277          (B) for a self-insured employer that is a public agency insurance mutual, an actuary
             2278      approved by the commission.
             2279          (ii) If a self-insured employer's experience modification factor under Subsection
             2280      (1)(f)(i) is less than 0.50, the self-insured employer shall use an experience modification factor
             2281      of 0.50 in determining the total calculated premium.
             2282          (g) To provide incentive for improved safety, the safety factor required in Subsection
             2283      (1)(d)(ii) shall be determined based on the self-insured employer's experience modification
             2284      factor as follows:
             2285      EXPERIENCE
             2286      MODIFICATION FACTOR SAFETY FACTOR
             2287      Less than or equal to 0.90 0.56
             2288      Greater than 0.90 but less than or equal to 1.00 0.78
             2289      Greater than 1.00 but less than or equal to 1.10 1.00
             2290      Greater than 1.10 but less than or equal to 1.20 1.22
             2291      Greater than 1.20 1.44
             2292          (h) (i) A premium or premium assessment modification other than a premium or
             2293      premium assessment modification under this section may not be allowed.
             2294          (ii) If a self-insured employer paying compensation direct fails to obtain an experience
             2295      modification factor as required in Subsection (1)(f)(i) within the reasonable time period
             2296      established by rule by the State Tax Commission, the State Tax Commission shall use an
             2297      experience modification factor of 2.00 and a safety factor of 2.00 to calculate the total
             2298      calculated premium for purposes of determining the assessment.
             2299          (iii) Prior to calculating the total calculated premium under Subsection (1)(h)(ii), the
             2300      State Tax Commission shall provide the self-insured employer with written notice that failure
             2301      to obtain an experience modification factor within a reasonable time period, as established by
             2302      rule by the State Tax Commission:
             2303          (A) shall result in the State Tax Commission using an experience modification factor
             2304      of 2.00 and a safety factor of 2.00 in calculating the total calculated premium for purposes of
             2305      determining the assessment; and
             2306          (B) may result in the division revoking the self-insured employer's right to pay
             2307      compensation direct.
             2308          (i) The division may immediately revoke a self-insured employer's certificate issued
             2309      under Sections 34A-2-201 and 34A-2-201.5 that permits the self-insured employer to pay
             2310      compensation direct if the State Tax Commission assigns an experience modification factor
             2311      and a safety factor under Subsection (1)(h) because the self-insured employer failed to obtain
             2312      an experience modification factor.
             2313          (2) Notwithstanding the annual payment requirement in Subsection (1)(a), a
             2314      self-insured employer whose total assessment obligation under Subsection (1)(a) for the
             2315      preceding year was $10,000 or more shall pay the assessment in quarterly installments in the
             2316      same manner provided in Section 59-9-104 and subject to the same penalty provided in Section
             2317      59-9-104 for not paying or underpaying an installment.
             2318          (3) (a) The State Tax Commission shall have access to all the records of the division
             2319      for the purpose of auditing and collecting any amounts described in this section.
             2320          (b) Time periods for the State Tax Commission to allow a refund or make an


             2321      assessment shall be determined in accordance with Title 59, Chapter 1, Part 14, Assessment,
             2322      Collections, and Refunds Act.
             2323          (4) (a) A review of appropriate use of job class assignment and calculation
             2324      methodology may be conducted as directed by the division at any reasonable time as a
             2325      condition of the self-insured employer's certification of paying compensation direct.
             2326          (b) The State Tax Commission shall make any records necessary for the review
             2327      available to the commission.
             2328          (c) The commission shall make the results of any review available to the State Tax
             2329      Commission.
             2330          Section 22. Section 35A-1-104.5 is amended to read:
             2331           35A-1-104.5. Strategic plan for health system reform.
             2332          The department shall work with the Department of Health, the [Insurance Department]
             2333      Department of Commerce, which may delegate this function to the Division of Insurance, the
             2334      Governor's Office of Economic Development, and the Legislature to develop the health system
             2335      reform in accordance with Title 63M, Chapter 1, Part 25, Health System Reform Act.
             2336          Section 23. Section 35A-4-312 is amended to read:
             2337           35A-4-312. Records.
             2338          (1) (a) An employing unit shall keep true and accurate work records containing any
             2339      information the department may prescribe by rule.
             2340          (b) A record shall be open to inspection and subject to being copied by the division or
             2341      its authorized representatives at a reasonable time and as often as may be necessary.
             2342          (c) An employing unit shall make a record available in the state for three years after the
             2343      calendar year in which the services are rendered.
             2344          (2) The division may require from an employing unit a sworn or unsworn report with
             2345      respect to a person employed by the employing unit that the division considers necessary for
             2346      the effective administration of this chapter.
             2347          (3) Except as provided in this section or in Sections 35A-4-103 and 35A-4-106 ,
             2348      information obtained under this chapter or obtained from an individual may not be published or
             2349      open to public inspection in any manner revealing the employing unit's or individual's identity.
             2350          (4) (a) The information obtained by the division under this section may not be used in
             2351      court or admitted into evidence in an action or proceeding, except:


             2352          (i) in an action or proceeding arising out of this chapter;
             2353          (ii) if the Labor Commission enters into a written agreement with the division under
             2354      Subsection (6)(b), in an action or proceeding by the Labor Commission to enforce:
             2355          (A) Title 34, Chapter 23, Employment of Minors;
             2356          (B) Title 34, Chapter 28, Payment of Wages;
             2357          (C) Title 34, Chapter 40, Utah Minimum Wage Act; or
             2358          (D) Title 34A, Utah Labor Code; or
             2359          (iii) under the terms of a court order obtained under Subsection 63G-2-202 (7) and
             2360      Section 63G-2-207 .
             2361          (b) The information obtained by the division under this section shall be disclosed to:
             2362          (i) a party to an unemployment insurance hearing before an administrative law judge of
             2363      the department or a review by the Workforce Appeals Board to the extent necessary for the
             2364      proper presentation of the party's case; or
             2365          (ii) an employer, upon request in writing for any information concerning a claim for a
             2366      benefit with respect to a former employee of the employer.
             2367          (5) The information obtained by the division under this section may be disclosed to:
             2368          (a) an employee of the department in the performance of the employee's duties in
             2369      administering this chapter or other programs of the department;
             2370          (b) an employee of the Labor Commission for the purpose of carrying out the programs
             2371      administered by the Labor Commission;
             2372          (c) an employee of the Department of Commerce for the purpose of carrying out the
             2373      programs administered by the Department of Commerce;
             2374          (d) an employee of the governor's office or another state governmental agency
             2375      administratively responsible for statewide economic development, to the extent necessary for
             2376      economic development policy analysis and formulation;
             2377          (e) an employee of another governmental agency that is specifically identified and
             2378      authorized by federal or state law to receive the information for the purposes stated in the law
             2379      authorizing the employee of the agency to receive the information;
             2380          (f) an employee of a governmental agency or workers' compensation insurer to the
             2381      extent the information will aid in:
             2382          (i) the detection or avoidance of duplicate, inconsistent, or fraudulent claims against:


             2383          (A) a workers' compensation program; or
             2384          (B) public assistance funds; or
             2385          (ii) the recovery of overpayments of workers' compensation or public assistance funds;
             2386          (g) an employee of a law enforcement agency to the extent the disclosure is necessary
             2387      to avoid a significant risk to public safety or in aid of a felony criminal investigation;
             2388          (h) an employee of the State Tax Commission or the Internal Revenue Service for the
             2389      purposes of:
             2390          (i) audit verification or simplification;
             2391          (ii) state or federal tax compliance;
             2392          (iii) verification of a code or classification of the:
             2393          (A) 1987 Standard Industrial Classification Manual of the federal Executive Office of
             2394      the President, Office of Management and Budget; or
             2395          (B) 2002 North American Industry Classification System of the federal Executive
             2396      Office of the President, Office of Management and Budget; and
             2397          (iv) statistics;
             2398          (i) an employee or contractor of the department or an educational institution, or other
             2399      governmental entity engaged in workforce investment and development activities under the
             2400      Workforce Investment Act of 1998 for the purpose of:
             2401          (i) coordinating services with the department;
             2402          (ii) evaluating the effectiveness of those activities; and
             2403          (iii) measuring performance;
             2404          (j) an employee of the Governor's Office of Economic Development, for the purpose of
             2405      periodically publishing in the Directory of Business and Industry, the name, address, telephone
             2406      number, number of employees by range, code or classification of an employer, and type of
             2407      ownership of Utah employers;
             2408          (k) the public for any purpose following a written waiver by all interested parties of
             2409      their rights to nondisclosure;
             2410          (l) an individual whose wage data is submitted to the department by an employer, so
             2411      long as no information other than the individual's wage data and the identity of the employer
             2412      who submitted the information is provided to the individual; or
             2413          (m) an employee of the [Insurance Department] Department of Commerce for the


             2414      purpose of administering Title 31A, Chapter 40, Professional Employer Organization Licensing
             2415      Act.
             2416          (6) Disclosure of private information under Subsection (4)(a)(ii) or Subsection (5),
             2417      with the exception of Subsections (5)(a) and (g), shall be made only if:
             2418          (a) the division determines that the disclosure will not have a negative effect on:
             2419          (i) the willingness of employers to report wage and employment information; or
             2420          (ii) the willingness of individuals to file claims for unemployment benefits; and
             2421          (b) the agency enters into a written agreement with the division in accordance with
             2422      rules made by the department.
             2423          (7) (a) The employees of a division of the department other than the Workforce
             2424      Development and Information Division and the Unemployment Insurance Division or an
             2425      agency receiving private information from the division under this chapter are subject to the
             2426      same requirements of privacy and confidentiality and to the same penalties for misuse or
             2427      improper disclosure of the information as employees of the division.
             2428          (b) Use of private information obtained from the department by a person, or for a
             2429      purpose other than one authorized in Subsection (4) or (5) violates Subsection 76-8-1301 (4).
             2430          Section 24. Section 36-12-5 is amended to read:
             2431           36-12-5. Duties of interim committees.
             2432          (1) Except as otherwise provided by law, each interim committee shall:
             2433          (a) receive study assignments by resolution from the Legislature;
             2434          (b) receive study assignments from the Legislative Management Committee, created
             2435      under Section 36-12-6 ;
             2436          (c) place matters on its study agenda after requesting approval of the study from the
             2437      Legislative Management Committee, which request, if not disapproved by the Legislative
             2438      Management Committee within 30 days of receipt of the request, the interim committee shall
             2439      consider it approved and may proceed with the requested study;
             2440          (d) request research reports from the professional legislative staff pertaining to the
             2441      committee's agenda of study;
             2442          (e) investigate and study possibilities for improvement in government services within
             2443      its subject area;
             2444          (f) accept reports from the professional legislative staff and make recommendations for


             2445      legislative action with respect to such reports; and
             2446          (g) prepare and recommend to the Legislature a legislative program in response to the
             2447      committee's study agenda.
             2448          (2) (a) As used in this Subsection (2):
             2449          (i) "Health insurance" is as defined in Section 31A-1-301 .
             2450          (ii) "Health insurance mandate" means a mandatory obligation with respect to a
             2451      coverage, benefit, or provider that, but for Title 31A, Insurance Code, would not be required
             2452      for a policy of health insurance.
             2453          (iii) "Review committee" means:
             2454          (A) the Business and Labor Interim Committee; and
             2455          (B) the Health and Human Services Interim Committee.
             2456          (b) In addition to the duties established pursuant to Subsection (1), annually each
             2457      review committee shall:
             2458          (i) identify the one or more health insurance mandates listed under Subsection (2)(d)
             2459      that:
             2460          (A) are in effect for five or more years as of May 1; and
             2461          (B) have not been reviewed during the previous 10 years as of May 1;
             2462          (ii) select which of the one or more health insurance mandates identified under
             2463      Subsection (2)(b)(i) that the review committee elects to review, subject to the direction of the
             2464      Legislative Management Committee; and
             2465          (iii) review a health insurance mandate selected under Subsection (2)(b)(ii) to
             2466      determine whether the health insurance mandate should be continued, modified, or repealed.
             2467          (c) The review under this Subsection (2) shall include:
             2468          (i) the estimated fiscal impact of the health insurance mandate on state and private
             2469      health insurance; and
             2470          (ii) the purpose and effectiveness of the health insurance mandate.
             2471          (d) The [Insurance Department] Department of Commerce under Title 31A, Insurance
             2472      Code, which may delegate this function to the Division of Insurance, shall:
             2473          (i) provide a list of the health insurance mandates in this state in its annual report; and
             2474          (ii) assist in a review if requested by a review committee.
             2475          (3) Except as otherwise provided by law, reports and recommendations of the interim


             2476      committees shall be completed and made public prior to any legislative session at which the
             2477      reports and recommendations are submitted. A copy of the reports and recommendations shall
             2478      be mailed to each member or member-elect of the Legislature, to each elective state officer, and
             2479      to the state library.
             2480          Section 25. Section 41-3-201 is amended to read:
             2481           41-3-201. Licenses required -- Restitution -- Education.
             2482          (1) As used in this section, "new applicant" means a person who is applying for a
             2483      license that the person has not been issued during the previous licensing year.
             2484          (2) A person may not act as any of the following without having procured a license
             2485      issued by the administrator:
             2486          (a) a dealer;
             2487          (b) salvage vehicle buyer;
             2488          (c) salesperson;
             2489          (d) manufacturer;
             2490          (e) transporter;
             2491          (f) dismantler;
             2492          (g) distributor;
             2493          (h) factory branch and representative;
             2494          (i) distributor branch and representative;
             2495          (j) crusher;
             2496          (k) remanufacturer; or
             2497          (l) body shop.
             2498          (3) (a) Except as provided in Subsection (3)(c), a person may not bid on or purchase a
             2499      vehicle with a salvage certificate as defined in Section 41-1a-1001 at or through a motor
             2500      vehicle auction unless the person is a licensed salvage vehicle buyer.
             2501          (b) Except as provided in Subsection (3)(c), a person may not offer for sale, sell, or
             2502      exchange a vehicle with a salvage certificate as defined in Section 41-1a-1001 at or through a
             2503      motor vehicle auction except to a licensed salvage vehicle buyer.
             2504          (c) A person may offer for sale, sell, or exchange a vehicle with a salvage certificate as
             2505      defined in Section 41-1a-1001 at or through a motor vehicle auction:
             2506          (i) to an out-of-state or out-of-country purchaser not licensed under this section, but


             2507      that is authorized to do business in the domestic or foreign jurisdiction in which the person is
             2508      domiciled or registered to do business; and
             2509          (ii) subject to the restriction in Subsection (3)(d), to an in-state purchaser not licensed
             2510      under this section that:
             2511          (A) is registered to do business in Utah; and
             2512          (B) has a Utah sales tax license.
             2513          (d) An operator of a motor vehicle auction may only offer for sale, sell, or exchange
             2514      five vehicles with a salvage certificate as defined in Section 41-1a-1001 at or through a motor
             2515      vehicle auction in any 12 month period to an in-state purchaser that does not have a salvage
             2516      vehicle buyer license issued in accordance with Subsection 41-3-202 (15).
             2517          (e) (i) An in-state purchaser of a vehicle with a salvage certificate as defined in Section
             2518      41-1a-1001 that is purchased at or through a motor vehicle auction shall title the vehicle within
             2519      15 days of the purchase if the purchaser does not have a salvage vehicle buyer license, dealer
             2520      license, body shop license, or dismantler license issued in accordance with Section 41-3-202 .
             2521          (ii) An operator of a motor vehicle auction may not offer for sale, sell, or exchange
             2522      additional vehicles with a salvage certificate as defined in Section 41-1a-1001 at or through a
             2523      motor vehicle auction to a purchaser if notified that the purchaser has not titled previously
             2524      purchased vehicles with a salvage certificate as required under Subsection (3)(e)(i).
             2525          (f) The commission may impose an administrative entrance fee established in
             2526      accordance with the procedures and requirements of Section 63J-1-504 not to exceed $10 on a
             2527      person not holding a license described in Subsection (3)(e)(i) that enters the physical premises
             2528      of a motor vehicle auction for the purpose of viewing available salvage vehicles prior to an
             2529      auction.
             2530          (4) (a) An operator of a motor vehicle auction shall keep a record of the sale of each
             2531      salvage vehicle.
             2532          (b) A record described under Subsection (4)(a) shall contain:
             2533          (i) the purchaser's name and address; and
             2534          (ii) the year, make, and vehicle identification number for each salvage vehicle sold.
             2535          (c) An operator of a motor vehicle auction shall:
             2536          (i) retain the record described in this Subsection (4) for five years from the date of sale;
             2537      and


             2538          (ii) make a record described in this Subsection (4) available for inspection by the
             2539      division at the location of the motor vehicle auction during normal business hours.
             2540          (5) (a) An operator of a motor vehicle auction that sells a salvage vehicle to a person
             2541      that is an out-of-country buyer shall:
             2542          (i) stamp on the face of the title so as not to obscure the name, date, or mileage
             2543      statement the words "FOR EXPORT ONLY" in all capital, black letters; and
             2544          (ii) stamp in each unused reassignment space on the back of the title the words "FOR
             2545      EXPORT ONLY."
             2546          (b) The words "FOR EXPORT ONLY" shall be:
             2547          (i) at least two inches wide; and
             2548          (ii) clearly legible.
             2549          (6) A supplemental license shall be secured by a dealer, manufacturer, remanufacturer,
             2550      transporter, dismantler, crusher, or body shop for each additional place of business maintained
             2551      by the licensee.
             2552          (7) A person who has been convicted of any law relating to motor vehicle commerce or
             2553      motor vehicle fraud may not be issued a license unless full restitution regarding those
             2554      convictions has been made.
             2555          (8) (a) The division may not issue a license to a new applicant for a new or used motor
             2556      vehicle dealer license, a new or used motorcycle dealer license, or a small trailer dealer license
             2557      unless the new applicant completes an eight-hour orientation class approved by the division
             2558      that includes education on motor vehicle laws and rules.
             2559          (b) The approved costs of the orientation class shall be paid by the new applicant.
             2560          (c) The class shall be completed by the new applicant and the applicant's partners,
             2561      corporate officers, bond indemnitors, and managers.
             2562          (d) (i) The division shall approve:
             2563          (A) providers of the orientation class; and
             2564          (B) costs of the orientation class.
             2565          (ii) A provider of an orientation class shall submit the orientation class curriculum to
             2566      the division for approval prior to teaching the orientation class.
             2567          (iii) A provider of an orientation class shall include in the orientation materials:
             2568          (A) ethics training;


             2569          (B) motor vehicle title and registration processes;
             2570          (C) provisions of Title 13, Chapter 5, Unfair Practices Act, relating to motor vehicles;
             2571          (D) [Department of Insurance] Department of Commerce requirements relating to
             2572      motor vehicles established under Title 31A, Insurance Code, which may delegate this function
             2573      to the Division of Insurance;
             2574          (E) Department of Public Safety requirements relating to motor vehicles;
             2575          (F) federal requirements related to motor vehicles as determined by the division; and
             2576          (G) any required disclosure compliance forms as determined by the division.
             2577          Section 26. Section 49-20-405 is amended to read:
             2578           49-20-405. Audit required -- Report to governor and Legislature.
             2579          The [Insurance Department] Department of Commerce acting under Title 31A,
             2580      Insurance Code, which may delegate this function to the Division of Insurance, shall biennially
             2581      audit the Public Employees' Trust Fund and programs authorized under this chapter and report
             2582      its findings to the governor and the Legislature, but the [commissioner] Department of
             2583      Commerce may accept the annual audited statement of the programs under this chapter in lieu
             2584      of the biennial audit requirement.
             2585          Section 27. Section 58-9-302 is amended to read:
             2586           58-9-302. Qualifications for licensure.
             2587          (1) Each applicant for licensure as a funeral service director shall:
             2588          (a) submit an application in a form prescribed by the division;
             2589          (b) pay a fee as determined by the department under Section 63J-1-504 ;
             2590          (c) be of good moral character in that the applicant has not been convicted of:
             2591          (i) a first or second degree felony;
             2592          (ii) a misdemeanor involving moral turpitude; or
             2593          (iii) any other crime that when considered with the duties and responsibilities of a
             2594      funeral service director is considered by the division and the board to indicate that the best
             2595      interests of the public are not served by granting the applicant a license;
             2596          (d) have obtained a high school diploma or its equivalent or a higher education degree;
             2597          (e) have obtained an associate degree, or its equivalent, in mortuary science from a
             2598      school of funeral service accredited by the American Board of Funeral Service Education or
             2599      other accrediting body recognized by the [U.S.] United States Department of Education;


             2600          (f) have completed not less than 2,000 hours and 50 embalmings, over a period of not
             2601      less than one year, of satisfactory performance in training as a licensed funeral service intern
             2602      under the supervision of a licensed funeral service director; and
             2603          (g) obtain a passing score on examinations approved by the division in collaboration
             2604      with the board.
             2605          (2) Each applicant for licensure as a funeral service intern shall:
             2606          (a) submit an application in a form prescribed by the division;
             2607          (b) pay a fee as determined by the department under Section 63J-1-504 ;
             2608          (c) be of good moral character in that the applicant has not been convicted of:
             2609          (i) a first or second degree felony;
             2610          (ii) a misdemeanor involving moral turpitude; or
             2611          (iii) any other crime that when considered with the duties and responsibilities of a
             2612      funeral service intern is considered by the division and the board to indicate that the best
             2613      interests of the public are not served by granting the applicant a license;
             2614          (d) have obtained a high school diploma or its equivalent or a higher education degree;
             2615      and
             2616          (e) obtain a passing score on an examination approved by the division in collaboration
             2617      with the board.
             2618          (3) Each applicant for licensure as a funeral service establishment and each funeral
             2619      service establishment licensee shall:
             2620          (a) submit an application in a form prescribed by the division;
             2621          (b) pay a fee as determined by the department under Section 63J-1-504 ;
             2622          (c) have in place:
             2623          (i) an embalming room for preparing dead human bodies for burial or final disposition,
             2624      which may serve one or more facilities operated by the applicant;
             2625          (ii) a refrigeration room that maintains a temperature of not more than 40 degrees
             2626      fahrenheit for preserving dead human bodies prior to burial or final disposition, which may
             2627      serve one or more facilities operated by the applicant; and
             2628          (iii) maintain at all times a licensed funeral service director who is responsible for the
             2629      day-to-day operation of the funeral service establishment and who is personally available to
             2630      perform the services for which the license is required;


             2631          (d) affiliate with a licensed preneed funeral arrangement sales agent or funeral service
             2632      director if the funeral service establishment sells preneed funeral arrangements;
             2633          (e) file with the completed application a copy of each form of contract or agreement the
             2634      applicant will use in the sale of preneed funeral arrangements; and
             2635          (f) provide evidence of appropriate licensure with the [Insurance Department]
             2636      Department of Commerce under Title 31A, Insurance Code, which may delegate this function
             2637      to the Division of Insurance, if the applicant intends to engage in the sale of any preneed
             2638      funeral arrangements funded in whole or in part by an insurance policy or product to be sold by
             2639      the provider or the provider's sales agent.
             2640          (4) Each applicant for licensure as a preneed funeral arrangement sales agent shall:
             2641          (a) submit an application in a form prescribed by the division;
             2642          (b) pay a fee as determined by the department under Section 63J-1-504 ;
             2643          (c) be of good moral character in that the applicant has not been convicted of:
             2644          (i) a first or second degree felony;
             2645          (ii) a misdemeanor involving moral turpitude; or
             2646          (iii) any other crime that when considered with the duties and responsibilities of a
             2647      preneed funeral sales agent is considered by the division and the board to indicate that the best
             2648      interests of the public are not served by granting the applicant a license;
             2649          (d) have obtained a high school diploma or its equivalent or a higher education degree;
             2650          (e) have obtained a passing score on an examination approved by the division in
             2651      collaboration with the board;
             2652          (f) affiliate with a licensed funeral service establishment; and
             2653          (g) provide evidence of appropriate licensure with the [Insurance Department]
             2654      Department of Commerce under Title 31A, Insurance Code, which may delegate this function
             2655      to the Division of Insurance, if the applicant intends to engage in the sale of any preneed
             2656      funeral arrangements funded in whole or in part by an insurance policy or product.
             2657          Section 28. Section 58-9-701 is amended to read:
             2658           58-9-701. Preneed contract requirements.
             2659          (1) (a) Every preneed funeral arrangement sold in Utah shall be evidenced by a written
             2660      contract.
             2661          (b) The funeral service establishment shall maintain a copy of the contract until five


             2662      years after all of its obligations under the contract have been executed.
             2663          (2) Each preneed contract form shall:
             2664          (a) be written in clear and understandable language printed in an easy-to-read type size
             2665      and style;
             2666          (b) bear the preprinted name, address, telephone number, and license number of the
             2667      funeral service establishment obligated to provide the services under the contract terms;
             2668          (c) be sequentially numbered by contract form;
             2669          (d) clearly identify that the contract is a guaranteed product contract;
             2670          (e) provide that a trust is established in accordance with the provisions of Section
             2671      58-9-702 ;
             2672          (f) if the contract is funded by an insurance policy or product, provide that the
             2673      insurance policy or product is filed with the [Insurance Department] Department of Commerce
             2674      under Title 31A, Insurance Code, which may delegate this function to the Division of
             2675      Insurance, and meets the requirements of Title 31A, Insurance Code; and
             2676          (g) conform to other standards created by rule under Title 63G, Chapter 3, Utah
             2677      Administrative Rulemaking Act, to protect the interests of buyers and potential buyers.
             2678          (3) A preneed contract shall provide for payment by the buyer in a form which may be
             2679      liquidated by the funeral service establishment within 30 days after the day the funeral service
             2680      establishment or sales agent receives the payment.
             2681          (4) A preneed contract may not be revocable by the funeral service establishment
             2682      except:
             2683          (a) in the event of nonpayment; and
             2684          (b) under terms and conditions clearly set forth in the contract.
             2685          (5) (a) A preneed contract may not be revocable by the buyer or beneficiary except:
             2686          (i) in the event of:
             2687          (A) a substantial contract breach by the funeral service establishment; or
             2688          (B) substantial evidence that the funeral service establishment is or will be unable to
             2689      provide the personal property or services to the beneficiary as provided under the contract; or
             2690          (ii) under terms and conditions clearly set forth in the contract.
             2691          (b) The contract shall contain a clear statement of the manner in which payments made
             2692      on the contract shall be refunded to the buyer or beneficiary upon revocation by the beneficiary.


             2693          (6) (a) A preneed contract shall provide the buyer the option to require the funeral
             2694      service establishment to furnish a written disclosure to a person who does not live at the same
             2695      residence as the buyer.
             2696          (b) The buyer may choose:
             2697          (i) a full disclosure containing a copy of the entire preneed contract;
             2698          (ii) a partial disclosure informing the recipient of:
             2699          (A) the existence of a preneed contract; and
             2700          (B) the name, address, telephone number, and license number of the funeral service
             2701      establishment obligated to provide the services under the preneed contract; or
             2702          (iii) not to require the funeral service establishment to furnish a written disclosure to
             2703      another person.
             2704          Section 29. Section 58-56-17 is amended to read:
             2705           58-56-17. Fees on sale -- Escrow agents -- Sales tax.
             2706          (1) A dealer shall collect and remit a fee of $75 to the division for each factory built
             2707      home the dealer sells that, as of the date of the sale, has not been permanently affixed to real
             2708      property and converted to real property as provided in Section 70D-2-401 . The fee shall be
             2709      payable within 30 days following the close of each calendar quarter for all units sold during
             2710      that calendar quarter. The fee shall be deposited in a restricted account as provided in Section
             2711      58-56-17.5 .
             2712          (2) A principal real estate broker, associate broker, or sales agent exempt from
             2713      registration as a dealer under Section 58-56-16 who sells a factory built home that has not been
             2714      permanently affixed to real property shall close the sale only through a qualified escrow agent
             2715      in this state registered with the [Insurance Department or the] Department of Financial
             2716      Institutions or the Department of Commerce under Title 31A, Insurance Code, which may
             2717      delegate this function to the Division of Insurance.
             2718          (3) An escrow agent through which a sale is closed under Subsection (2) shall remit all
             2719      required sales tax to the state.
             2720          Section 30. Section 59-9-105 is amended to read:
             2721           59-9-105. Tax on certain insurers to pay for relative value study and other
             2722      publications or services.
             2723          (1) Each insurer providing coverage for motor vehicle liability, uninsured motorist, and


             2724      personal injury protection shall pay to the State Tax Commission on or before March 31 of
             2725      each year, a tax of .01% on the total premiums received for these coverages during the
             2726      preceding calendar year from policies covering motor vehicle risks in this state.
             2727          (2) The taxable premium under this section shall be reduced by all premiums returned
             2728      or credited to policyholders on direct business subject to tax in this state.
             2729          (3) All money received by the state under this section shall be deposited in the General
             2730      Fund as a dedicated credit for the purpose of providing funds to pay for any costs and expenses
             2731      incurred by the [Insurance Department] Department of Commerce, which may delegate this
             2732      function to the Division of Insurance:
             2733          (a) in conducting, maintaining, and administering the relative value study referred to in
             2734      Section 31A-22-307 ;
             2735          (b) to prepare, publish, and distribute publications relating to insurance and consumers
             2736      of insurance as provided in Section 31A-2-208 ; and
             2737          (c) in providing the services of the [Insurance Department] Department of Commerce
             2738      under Title 31A, Insurance Code, through the use of:
             2739          (i) electronic commerce; and
             2740          (ii) other information technology.
             2741          Section 31. Section 59-10-1023 is amended to read:
             2742           59-10-1023. Nonrefundable tax credit for amounts paid under a health benefit
             2743      plan.
             2744          (1) As used in this section:
             2745          (a) "Claimant with dependents" means a claimant:
             2746          (i) regardless of the claimant's filing status for purposes of filing a federal individual
             2747      income tax return for the taxable year; and
             2748          (ii) who claims one or more dependents under Section 151, Internal Revenue Code, as
             2749      allowed on the claimant's federal individual income tax return for the taxable year.
             2750          (b) "Eligible insured individual" means:
             2751          (i) the claimant who is insured under a health benefit plan;
             2752          (ii) the spouse of the claimant described in Subsection (1)(b)(i) if:
             2753          (A) the claimant files a single return jointly under this chapter with the claimant's
             2754      spouse for the taxable year; and


             2755          (B) the spouse is insured under the health benefit plan described in Subsection
             2756      (1)(b)(i); or
             2757          (iii) a dependent of the claimant described in Subsection (1)(b)(i) if:
             2758          (A) the claimant claims the dependent under Section 151, Internal Revenue Code, as
             2759      allowed on the claimant's federal individual income tax return for the taxable year; and
             2760          (B) the dependent is insured under the health benefit plan described in Subsection
             2761      (1)(b)(i).
             2762          (c) "Excluded expenses" means an amount a claimant pays for insurance offered under
             2763      a health benefit plan for a taxable year if:
             2764          (i) the claimant claims a tax credit for that amount under Section 35, Internal Revenue
             2765      Code:
             2766          (A) on the claimant's federal individual income tax return for the taxable year; and
             2767          (B) with respect to an eligible insured individual;
             2768          (ii) the claimant deducts that amount under Section 162 or 213, Internal Revenue
             2769      Code:
             2770          (A) on the claimant's federal individual income tax return for the taxable year; and
             2771          (B) with respect to an eligible insured individual; or
             2772          (iii) the claimant excludes that amount from gross income under Section 106 or 125,
             2773      Internal Revenue Code, with respect to an eligible insured individual.
             2774          (d) (i) "Health benefit plan" is as defined in Section 31A-1-301 .
             2775          (ii) "Health benefit plan" does not include equivalent self-insurance as defined [by the
             2776      Insurance Department] by rule made in accordance with Title 63G, Chapter 3, Utah
             2777      Administrative Rulemaking Act, by the Department of Commerce under Title 31A, Insurance
             2778      Code, which may delegate this function to the Division of Insurance.
             2779          (e) "Joint claimant with no dependents" means a husband and wife who:
             2780          (i) file a single return jointly under this chapter for the taxable year; and
             2781          (ii) do not claim a dependent under Section 151, Internal Revenue Code, on the
             2782      husband's and wife's federal individual income tax return for the taxable year.
             2783          (f) "Single claimant with no dependents" means:
             2784          (i) a single individual who:
             2785          (A) files a single federal individual income tax return for the taxable year; and


             2786          (B) does not claim a dependent under Section 151, Internal Revenue Code, on the
             2787      single individual's federal individual income tax return for the taxable year;
             2788          (ii) a head of household:
             2789          (A) as defined in Section 2(b), Internal Revenue Code, who files a single federal
             2790      individual income tax return for the taxable year; and
             2791          (B) who does not claim a dependent under Section 151, Internal Revenue Code, on the
             2792      head of household's federal individual income tax return for the taxable year; or
             2793          (iii) a married individual who:
             2794          (A) does not file a single federal individual income tax return jointly with that married
             2795      individual's spouse for the taxable year; and
             2796          (B) does not claim a dependent under Section 151, Internal Revenue Code, on that
             2797      married individual's federal individual income tax return for the taxable year.
             2798          (2) Subject to Subsection (3), and except as provided in Subsection (4), for taxable
             2799      years beginning on or after January 1, 2009, a claimant may claim a nonrefundable tax credit
             2800      equal to the product of:
             2801          (a) the difference between:
             2802          (i) the total amount the claimant pays during the taxable year for:
             2803          (A) insurance offered under a health benefit plan; and
             2804          (B) an eligible insured individual; and
             2805          (ii) excluded expenses; and
             2806          (b) 5%.
             2807          (3) The maximum amount of a tax credit described in Subsection (2) a claimant may
             2808      claim on a return for a taxable year is:
             2809          (a) for a single claimant with no dependents, $300;
             2810          (b) for a joint claimant with no dependents, $600; or
             2811          (c) for a claimant with dependents, $900.
             2812          (4) A claimant may not claim a tax credit under this section if the claimant is eligible to
             2813      participate in insurance offered under a health benefit plan maintained and funded in whole or
             2814      in part by:
             2815          (a) the claimant's employer; or
             2816          (b) another person's employer.


             2817          (5) A claimant may not carry forward or carry back a tax credit under this section.
             2818          Section 32. Section 63A-5-205 is amended to read:
             2819           63A-5-205. Contracting powers of director -- Retainage -- Health insurance
             2820      coverage.
             2821          (1) As used in this section:
             2822          (a) "Capital developments" has the same meaning as provided in Section 63A-5-104 .
             2823          (b) "Capital improvements" has the same meaning as provided in Section 63A-5-104 .
             2824          (c) "Employee" means an "employee," "worker," or "operative" as defined in Section
             2825      34A-2-104 who:
             2826          (i) works at least 30 hours per calendar week; and
             2827          (ii) meets employer eligibility waiting requirements for health care insurance which
             2828      may not exceed the first day of the calendar month following 90 days from the date of hire.
             2829          (d) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             2830          (e) "Qualified health insurance coverage" means at the time the contract is entered into
             2831      or renewed:
             2832          (i) a health benefit plan and employer contribution level with a combined actuarial
             2833      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             2834      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and
             2835      a contribution level of 50% of the premium for the employee and the dependents of the
             2836      employee who reside or work in the state, in which:
             2837          (A) the employer pays at least 50% of the premium for the employee and the
             2838      dependents of the employee who reside or work in the state; and
             2839          (B) for purposes of calculating actuarial equivalency under this Subsection (1)(e)(i):
             2840          (I) rather that the benchmark plan's deductible, and the benchmark plan's out-of-pocket
             2841      maximum based on income levels:
             2842          (Aa) the deductible is $750 per individual and $2,250 per family; and
             2843          (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
             2844          (II) dental coverage is not required; and
             2845          (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do not
             2846      apply; or
             2847          (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a


             2848      deductible that is either:
             2849          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             2850      or
             2851          (II) a deductible that is higher than the lowest deductible permitted for a federally
             2852      qualified high deductible health plan, but includes an employer contribution to a health savings
             2853      account in a dollar amount at least equal to the dollar amount difference between the lowest
             2854      deductible permitted for a federally qualified high deductible plan and the deductible for the
             2855      employer offered federally qualified high deductible plan;
             2856          (B) an out-of-pocket maximum that does not exceed three times the amount of the
             2857      annual deductible; and
             2858          (C) under which the employer pays 75% of the premium for the employee and the
             2859      dependents of the employee who work or reside in the state.
             2860          (f) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             2861          (2) In accordance with Title 63G, Chapter 6, Utah Procurement Code, the director may:
             2862          (a) subject to Subsection (3), enter into contracts for any work or professional services
             2863      which the division or the State Building Board may do or have done; and
             2864          (b) as a condition of any contract for architectural or engineering services, prohibit the
             2865      architect or engineer from retaining a sales or agent engineer for the necessary design work.
             2866          (3) (a) Except as provided in Subsection (3)(b), this Subsection (3) applies to all design
             2867      or construction contracts entered into by the division or the State Building Board on or after
             2868      July 1, 2009, and:
             2869          (i) applies to a prime contractor if the prime contract is in the amount of $1,500,000 or
             2870      greater; and
             2871          (ii) applies to a subcontractor if the subcontract is in the amount of $750,000 or greater.
             2872          (b) This Subsection (3) does not apply:
             2873          (i) if the application of this Subsection (3) jeopardizes the receipt of federal funds;
             2874          (ii) if the contract is a sole source contract;
             2875          (iii) if the contract is an emergency procurement; or
             2876          (iv) to a change order as defined in Section [ 63G-6-102 ] 63G-6-103 , or a modification
             2877      to a contract, when the contract does not meet the threshold required by Subsection (3)(a).
             2878          (c) A person who intentionally uses change orders or contract modifications to


             2879      circumvent the requirements of Subsection (3)(a) is guilty of an infraction.
             2880          (d) (i) A contractor subject to Subsection (3)(a) shall demonstrate to the director that
             2881      the contractor has and will maintain an offer of qualified health insurance coverage for the
             2882      contractor's employees and the employees' dependents.
             2883          (ii) If a subcontractor of the contractor is subject to Subsection (3)(a), the contractor
             2884      shall demonstrate to the director that the subcontractor has and will maintain an offer of
             2885      qualified health insurance coverage for the subcontractor's employees and the employees'
             2886      dependents.
             2887          (e) (i) (A) A contractor who fails to meet the requirements of Subsection (3)(d)(i)
             2888      during the duration of the contract is subject to penalties in accordance with administrative
             2889      rules adopted by the division under Subsection (3)(f).
             2890          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             2891      requirements of Subsection (3)(d)(ii).
             2892          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (3)(d)(ii)
             2893      during the duration of the contract is subject to penalties in accordance with administrative
             2894      rules adopted by the division under Subsection (3)(f).
             2895          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             2896      requirements of Subsection (3)(d)(i).
             2897          (f) The division shall adopt administrative rules:
             2898          (i) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             2899          (ii) in coordination with:
             2900          (A) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             2901          (B) the Department of Natural Resources in accordance with Section 79-2-404 ;
             2902          (C) a public transit district in accordance with Section 17B-2a-818.5 ;
             2903          (D) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             2904          (E) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             2905          (F) the Legislature's Administrative Rules Review Committee; and
             2906          (iii) which establish:
             2907          (A) the requirements and procedures a contractor must follow to demonstrate to the
             2908      director compliance with this Subsection (3) which shall include:
             2909          (I) that a contractor will not have to demonstrate compliance with Subsection (3)(d)(i)


             2910      or (ii) more than twice in any 12-month period; and
             2911          (II) that the actuarially equivalent determination required in Subsection (1) is met by
             2912      the contractor if the contractor provides the department or division with a written statement of
             2913      actuarial equivalency from either:
             2914          (Aa) the [Utah Insurance Department] Department of Commerce under Title 31A,
             2915      Insurance Code, which may delegate this function to the Division of Insurance;
             2916          (Bb) an actuary selected by the contractor or the contractor's insurer; or
             2917          (Cc) an underwriter who is responsible for developing the employer group's premium
             2918      rates;
             2919          (B) the penalties that may be imposed if a contractor or subcontractor intentionally
             2920      violates the provisions of this Subsection (3), which may include:
             2921          (I) a three-month suspension of the contractor or subcontractor from entering into
             2922      future contracts with the state upon the first violation;
             2923          (II) a six-month suspension of the contractor or subcontractor from entering into future
             2924      contracts with the state upon the second violation;
             2925          (III) an action for debarment of the contractor or subcontractor in accordance with
             2926      Section 63G-6-804 upon the third or subsequent violation; and
             2927          (IV) monetary penalties which may not exceed 50% of the amount necessary to
             2928      purchase qualified health insurance coverage for an employee and the dependents of an
             2929      employee of the contractor or subcontractor who was not offered qualified health insurance
             2930      coverage during the duration of the contract; and
             2931          (C) a website on which the department shall post the benchmark for the qualified
             2932      health insurance coverage identified in Subsection (1)(e)(i).
             2933          (g) (i) In addition to the penalties imposed under Subsection (3)(f)(iii), a contractor or
             2934      subcontractor who intentionally violates the provisions of this section shall be liable to the
             2935      employee for health care costs that would have been covered by qualified health insurance
             2936      coverage.
             2937          (ii) An employer has an affirmative defense to a cause of action under Subsection
             2938      (3)(g)(i) if:
             2939          (A) the employer relied in good faith on a written statement of actuarial equivalency
             2940      provided by:


             2941          (I) an actuary; or
             2942          (II) an underwriter who is responsible for developing the employer group's premium
             2943      rates; or
             2944          (B) the department determines that compliance with this section is not required under
             2945      the provisions of Subsection (3)(b).
             2946          (iii) An employee has a private right of action only against the employee's employer to
             2947      enforce the provisions of this Subsection (3)(g).
             2948          (h) Any penalties imposed and collected under this section shall be deposited into the
             2949      Medicaid Restricted Account created by Section 26-18-402 .
             2950          (i) The failure of a contractor or subcontractor to provide qualified health insurance
             2951      coverage as required by this section:
             2952          (i) may not be the basis for a protest or other action from a prospective bidder, offeror,
             2953      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             2954      Legal and Contractual Remedies; and
             2955          (ii) may not be used by the procurement entity or a prospective bidder, offeror, or
             2956      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             2957      or construction.
             2958          (4) The judgment of the director as to the responsibility and qualifications of a bidder
             2959      is conclusive, except in case of fraud or bad faith.
             2960          (5) The division shall make all payments to the contractor for completed work in
             2961      accordance with the contract and pay the interest specified in the contract on any payments that
             2962      are late.
             2963          (6) If any payment on a contract with a private contractor to do work for the division or
             2964      the State Building Board is retained or withheld, it shall be retained or withheld and released as
             2965      provided in Section 13-8-5 .
             2966          Section 33. Section 63C-6-101 is amended to read:
             2967           63C-6-101. Creation of commission -- Membership -- Appointment -- Vacancies.
             2968          (1) There is created the Utah Seismic Safety Commission consisting of 15 members,
             2969      designated as follows:
             2970          (a) the director of the Division of Homeland Security or [his] the director's designee;
             2971          (b) the director of the Utah Geological Survey or [his] the director's designee;


             2972          (c) the director of the University of Utah Seismograph Stations or [his] the director's
             2973      designee;
             2974          (d) the executive director of the Utah League of Cities and Towns or [his] the
             2975      executive director's designee;
             2976          (e) a representative from the Structural Engineers Association of Utah biannually
             2977      selected by its membership;
             2978          (f) the director of the Division of Facilities Construction and Management or [his] the
             2979      director's designee;
             2980          (g) the executive director of the Department of Transportation or [his] the executive
             2981      director's designee;
             2982          (h) the State Planning Coordinator or [his] the State Planning Coordinator's designee;
             2983          (i) a representative from the American Institute of Architects, Utah Section;
             2984          (j) a representative from the American Society of Civil Engineers, Utah Section;
             2985          (k) a member of the House of Representatives appointed biannually by the speaker of
             2986      the House;
             2987          (l) a member of the Senate appointed biannually by the president of the Senate;
             2988          (m) the [commissioner of the Department of Insurance or his] executive director of the
             2989      Department of Commerce, or the executive director's designee;
             2990          (n) a representative from the Association of Contingency Planners, Utah Chapter,
             2991      biannually selected by its membership; and
             2992          (o) a representative from the American Public Works Association, Utah Chapter,
             2993      biannually selected by its membership.
             2994          (2) The commission shall annually select one of its members to serve as chair of the
             2995      commission.
             2996          (3) When a vacancy occurs in the membership for any reason, the replacement shall be
             2997      appointed for the unexpired term.
             2998          Section 34. Section 63C-9-403 is amended to read:
             2999           63C-9-403. Contracting power of executive director -- Health insurance coverage.
             3000          (1) For purposes of this section:
             3001          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             3002      34A-2-104 who:


             3003          (i) works at least 30 hours per calendar week; and
             3004          (ii) meets employer eligibility waiting requirements for health care insurance which
             3005      may not exceed the first of the calendar month following 90 days from the date of hire.
             3006          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             3007          (c) "Qualified health insurance coverage" means at the time the contract is entered into
             3008      or renewed:
             3009          (i) a health benefit plan and employer contribution level with a combined actuarial
             3010      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             3011      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and
             3012      a contribution level of 50% of the premium for the employee and the dependents of the
             3013      employee who reside or work in the state, in which:
             3014          (A) the employer pays at least 50% of the premium for the employee and the
             3015      dependents of the employee who reside or work in the state; and
             3016          (B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):
             3017          (I) rather that the benchmark plan's deductible, and the benchmark plan's out-of-pocket
             3018      maximum based on income levels:
             3019          (Aa) the deductible is $750 per individual and $2,250 per family; and
             3020          (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
             3021          (II) dental coverage is not required; and
             3022          (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do not
             3023      apply; or
             3024          (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
             3025      deductible that is either:
             3026          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             3027      or
             3028          (II) a deductible that is higher than the lowest deductible permitted for a federally
             3029      qualified high deductible health plan, but includes an employer contribution to a health savings
             3030      account in a dollar amount at least equal to the dollar amount difference between the lowest
             3031      deductible permitted for a federally qualified high deductible plan and the deductible for the
             3032      employer offered federally qualified high deductible plan;
             3033          (B) an out-of-pocket maximum that does not exceed three times the amount of the


             3034      annual deductible; and
             3035          (C) under which the employer pays 75% of the premium for the employee and the
             3036      dependents of the employee who work or reside in the state.
             3037          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             3038          (2) (a) Except as provided in Subsection (3), this section applies to a design or
             3039      construction contract entered into by the board or on behalf of the board on or after July 1,
             3040      2009, and to a prime contractor or a subcontractor in accordance with Subsection (2)(b).
             3041          (b) (i) A prime contractor is subject to this section if the prime contract is in the
             3042      amount of $1,500,000 or greater.
             3043          (ii) A subcontractor is subject to this section if a subcontract is in the amount of
             3044      $750,000 or greater.
             3045          (3) This section does not apply if:
             3046          (a) the application of this section jeopardizes the receipt of federal funds;
             3047          (b) the contract is a sole source contract; or
             3048          (c) the contract is an emergency procurement.
             3049          (4) (a) This section does not apply to a change order as defined in Section [ 63G-6-102 ]
             3050      63G-6-103 , or a modification to a contract, when the contract does not meet the initial
             3051      threshold required by Subsection (2).
             3052          (b) A person who intentionally uses change orders or contract modifications to
             3053      circumvent the requirements of Subsection (2) is guilty of an infraction.
             3054          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the executive
             3055      director that the contractor has and will maintain an offer of qualified health insurance
             3056      coverage for the contractor's employees and the employees' dependents during the duration of
             3057      the contract.
             3058          (b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
             3059      shall demonstrate to the executive director that the subcontractor has and will maintain an offer
             3060      of qualified health insurance coverage for the subcontractor's employees and the employees'
             3061      dependents during the duration of the contract.
             3062          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
             3063      the duration of the contract is subject to penalties in accordance with administrative rules
             3064      adopted by the division under Subsection (6).


             3065          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             3066      requirements of Subsection (5)(b).
             3067          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             3068      the duration of the contract is subject to penalties in accordance with administrative rules
             3069      adopted by the department under Subsection (6).
             3070          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             3071      requirements of Subsection (5)(a).
             3072          (6) The department shall adopt administrative rules:
             3073          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             3074          (b) in coordination with:
             3075          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             3076          (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
             3077          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             3078          (iv) a public transit district in accordance with Section 17B-2a-818.5 ;
             3079          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             3080          (vi) the Legislature's Administrative Rules Review Committee; and
             3081          (c) which establish:
             3082          (i) the requirements and procedures a contractor must follow to demonstrate to the
             3083      executive director compliance with this section which shall include:
             3084          (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a) or
             3085      (b) more than twice in any 12-month period; and
             3086          (B) that the actuarially equivalent determination required in Subsection (1) is met by
             3087      the contractor if the contractor provides the department or division with a written statement of
             3088      actuarial equivalency from either:
             3089          (I) the [Utah Insurance Department] Department of Commerce under Title 31A,
             3090      Insurance Code, which may delegate this function to the Division of Insurance;
             3091          (II) an actuary selected by the contractor or the contractor's insurer; or
             3092          (III) an underwriter who is responsible for developing the employer group's premium
             3093      rates;
             3094          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             3095      violates the provisions of this section, which may include:


             3096          (A) a three-month suspension of the contractor or subcontractor from entering into
             3097      future contracts with the state upon the first violation;
             3098          (B) a six-month suspension of the contractor or subcontractor from entering into future
             3099      contracts with the state upon the second violation;
             3100          (C) an action for debarment of the contractor or subcontractor in accordance with
             3101      Section 63G-6-804 upon the third or subsequent violation; and
             3102          (D) monetary penalties which may not exceed 50% of the amount necessary to
             3103      purchase qualified health insurance coverage for employees and dependents of employees of
             3104      the contractor or subcontractor who were not offered qualified health insurance coverage
             3105      during the duration of the contract; and
             3106          (iii) a website on which the department shall post the benchmark for the qualified
             3107      health insurance coverage identified in Subsection (1)(c)(i).
             3108          (7) (a) (i) In addition to the penalties imposed under Subsection (6)(c), a contractor or
             3109      subcontractor who intentionally violates the provisions of this section shall be liable to the
             3110      employee for health care costs that would have been covered by qualified health insurance
             3111      coverage.
             3112          (ii) An employer has an affirmative defense to a cause of action under Subsection
             3113      (7)(a)(i) if:
             3114          (A) the employer relied in good faith on a written statement of actuarial equivalency
             3115      provided by:
             3116          (I) an actuary; or
             3117          (II) an underwriter who is responsible for developing the employer group's premium
             3118      rates; or
             3119          (B) the department determines that compliance with this section is not required under
             3120      the provisions of Subsection (3) or (4).
             3121          (b) An employee has a private right of action only against the employee's employer to
             3122      enforce the provisions of this Subsection (7).
             3123          (8) Any penalties imposed and collected under this section shall be deposited into the
             3124      Medicaid Restricted Account created in Section 26-18-402 .
             3125          (9) The failure of a contractor or subcontractor to provide qualified health insurance
             3126      coverage as required by this section:


             3127          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             3128      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             3129      Legal and Contractual Remedies; and
             3130          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             3131      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             3132      or construction.
             3133          Section 35. Section 63G-2-302 is amended to read:
             3134           63G-2-302. Private records.
             3135          (1) The following records are private:
             3136          (a) records concerning an individual's eligibility for unemployment insurance benefits,
             3137      social services, welfare benefits, or the determination of benefit levels;
             3138          (b) records containing data on individuals describing medical history, diagnosis,
             3139      condition, treatment, evaluation, or similar medical data;
             3140          (c) records of publicly funded libraries that when examined alone or with other records
             3141      identify a patron;
             3142          (d) records received by or generated by or for:
             3143          (i) the Independent Legislative Ethics Commission, except for:
             3144          (A) the commission's summary data report that is required under legislative rule; and
             3145          (B) any other document that is classified as public under legislative rule; or
             3146          (ii) a Senate or House Ethics Committee in relation to the review of ethics complaints,
             3147      unless the record is classified as public under legislative rule;
             3148          (e) records received or generated for a Senate confirmation committee concerning
             3149      character, professional competence, or physical or mental health of an individual:
             3150          (i) if prior to the meeting, the chair of the committee determines release of the records:
             3151          (A) reasonably could be expected to interfere with the investigation undertaken by the
             3152      committee; or
             3153          (B) would create a danger of depriving a person of a right to a fair proceeding or
             3154      impartial hearing; and
             3155          (ii) after the meeting, if the meeting was closed to the public;
             3156          (f) employment records concerning a current or former employee of, or applicant for
             3157      employment with, a governmental entity that would disclose that individual's home address,


             3158      home telephone number, Social Security number, insurance coverage, marital status, or payroll
             3159      deductions;
             3160          (g) records or parts of records under Section 63G-2-303 that a current or former
             3161      employee identifies as private according to the requirements of that section;
             3162          (h) that part of a record indicating a person's Social Security number or federal
             3163      employer identification number if provided under Section 31A-23a-104 , 31A-25-202 ,
             3164      31A-26-202 , 58-1-301 , 61-1-4 , or 61-2f-203 ;
             3165          (i) that part of a voter registration record identifying a voter's driver license or
             3166      identification card number, Social Security number, or last four digits of the Social Security
             3167      number;
             3168          (j) a record that:
             3169          (i) contains information about an individual;
             3170          (ii) is voluntarily provided by the individual; and
             3171          (iii) goes into an electronic database that:
             3172          (A) is designated by and administered under the authority of the Chief Information
             3173      Officer; and
             3174          (B) acts as a repository of information about the individual that can be electronically
             3175      retrieved and used to facilitate the individual's online interaction with a state agency;
             3176          (k) information provided to the [Commissioner of Insurance] Department of
             3177      Commerce under Title 31A, Insurance Code, which may delegate this function to the Division
             3178      of Insurance, under:
             3179          (i) Subsection 31A-23a-115 (2)(a);
             3180          (ii) Subsection 31A-23a-302 (3); or
             3181          (iii) Subsection 31A-26-210 (3);
             3182          (l) information obtained through a criminal background check under Title 11, Chapter
             3183      40, Criminal Background Checks by Political Subdivisions Operating Water Systems;
             3184          (m) information provided by an offender that is:
             3185          (i) required by the registration requirements of Section 77-27-21.5 ; and
             3186          (ii) not required to be made available to the public under Subsection 77-27-21.5 (27);
             3187      and
             3188          (n) a statement and any supporting documentation filed with the attorney general in


             3189      accordance with Section 34-45-107 , if the federal law or action supporting the filing involves
             3190      homeland security.
             3191          (2) The following records are private if properly classified by a governmental entity:
             3192          (a) records concerning a current or former employee of, or applicant for employment
             3193      with a governmental entity, including performance evaluations and personal status information
             3194      such as race, religion, or disabilities, but not including records that are public under Subsection
             3195      63G-2-301 (2)(b) or 63G-2-301 (3)(o), or private under Subsection (1)(b);
             3196          (b) records describing an individual's finances, except that the following are public:
             3197          (i) records described in Subsection 63G-2-301 (2);
             3198          (ii) information provided to the governmental entity for the purpose of complying with
             3199      a financial assurance requirement; or
             3200          (iii) records that must be disclosed in accordance with another statute;
             3201          (c) records of independent state agencies if the disclosure of those records would
             3202      conflict with the fiduciary obligations of the agency;
             3203          (d) other records containing data on individuals the disclosure of which constitutes a
             3204      clearly unwarranted invasion of personal privacy;
             3205          (e) records provided by the United States or by a government entity outside the state
             3206      that are given with the requirement that the records be managed as private records, if the
             3207      providing entity states in writing that the record would not be subject to public disclosure if
             3208      retained by it; and
             3209          (f) any portion of a record in the custody of the Division of Aging and Adult Services,
             3210      created in Section 62A-3-102 , that may disclose, or lead to the discovery of, the identity of a
             3211      person who made a report of alleged abuse, neglect, or exploitation of a vulnerable adult.
             3212          (3) (a) As used in this Subsection (3), "medical records" means medical reports,
             3213      records, statements, history, diagnosis, condition, treatment, and evaluation.
             3214          (b) Medical records in the possession of the University of Utah Hospital, its clinics,
             3215      doctors, or affiliated entities are not private records or controlled records under Section
             3216      63G-2-304 when the records are sought:
             3217          (i) in connection with any legal or administrative proceeding in which the patient's
             3218      physical, mental, or emotional condition is an element of any claim or defense; or
             3219          (ii) after a patient's death, in any legal or administrative proceeding in which any party


             3220      relies upon the condition as an element of the claim or defense.
             3221          (c) Medical records are subject to production in a legal or administrative proceeding
             3222      according to state or federal statutes or rules of procedure and evidence as if the medical
             3223      records were in the possession of a nongovernmental medical care provider.
             3224          Section 36. Section 63J-1-201 is amended to read:
             3225           63J-1-201. Governor to submit budget to Legislature -- Contents -- Preparation --
             3226      Appropriations based on current tax laws and not to exceed estimated revenues.
             3227          (1) The governor shall deliver, not later than 30 days before the date the Legislature
             3228      convenes in the annual general session, a confidential draft copy of the governor's proposed
             3229      budget recommendations to the Office of the Legislative Fiscal Analyst.
             3230          (2) (a) The governor shall, within the first three days of the annual general session of
             3231      the Legislature, submit to the presiding officer of each house of the Legislature:
             3232          (i) a proposed budget for the ensuing fiscal year;
             3233          (ii) a schedule for all of the proposed appropriations of the budget, with each
             3234      appropriation clearly itemized and classified;
             3235          (iii) the statement described in Subsection (2)(c); and
             3236          (iv) as applicable, a document showing proposed expenditures and estimated revenues
             3237      that are based on changes in state tax laws or rates.
             3238          (b) The proposed budget shall include:
             3239          (i) a projection of estimated revenues and expenditures for the next fiscal year;
             3240          (ii) the source of all direct, indirect, and in-kind matching funds for all federal grants or
             3241      assistance programs included in the budget;
             3242          (iii) a complete plan of proposed expenditures and estimated revenues for the next
             3243      fiscal year that is based upon the current fiscal year state tax laws and rates;
             3244          (iv) an itemized estimate of the proposed appropriations for:
             3245          (A) the Legislative Department as certified to the governor by the president of the
             3246      Senate and the speaker of the House;
             3247          (B) the Executive Department;
             3248          (C) the Judicial Department as certified to the governor by the state court
             3249      administrator;
             3250          (D) payment and discharge of the principal and interest of the indebtedness of the state;


             3251          (E) the salaries payable by the state under the Utah Constitution or under law for the
             3252      lease agreements planned for the next fiscal year;
             3253          (F) other purposes that are set forth in the Utah Constitution or under law; and
             3254          (G) all other appropriations;
             3255          (v) for each line item, the average annual dollar amount of staff funding associated
             3256      with all positions that were vacant during the last fiscal year; and
             3257          (vi) deficits or anticipated deficits.
             3258          (c) The budget shall be accompanied by a statement showing:
             3259          (i) the revenues and expenditures for the last fiscal year;
             3260          (ii) the current assets, liabilities, and reserves, surplus or deficit, and the debts and
             3261      funds of the state;
             3262          (iii) an estimate of the state's financial condition as of the beginning and the end of the
             3263      period covered by the budget;
             3264          (iv) a complete analysis of lease with an option to purchase arrangements entered into
             3265      by state agencies;
             3266          (v) the recommendations for each state agency for new full-time employees for the
             3267      next fiscal year, which shall also be provided to the State Building Board as required by
             3268      Subsection 63A-5-103 (2);
             3269          (vi) any explanation that the governor may desire to make as to the important features
             3270      of the budget and any suggestion as to methods for the reduction of expenditures or increase of
             3271      the state's revenue; and
             3272          (vii) information detailing certain fee increases as required by Section 63J-1-504 .
             3273          (3) (a) (i) For the purpose of preparing and reporting the proposed budget, the governor
             3274      shall require the proper state officials, including all public and higher education officials, all
             3275      heads of executive and administrative departments and state institutions, bureaus, boards,
             3276      commissions, and agencies expending or supervising the expenditure of the state money, and
             3277      all institutions applying for state money and appropriations, to provide itemized estimates of
             3278      revenues and expenditures.
             3279          (ii) The governor may also require other information under these guidelines and at
             3280      times as the governor may direct, which may include a requirement for program productivity
             3281      and performance measures, where appropriate, with emphasis on outcome indicators.


             3282          (b) The governor may require representatives of public and higher education, state
             3283      departments and institutions, and other institutions or individuals applying for state
             3284      appropriations to attend budget meetings.
             3285          (c) (i) (A) In submitting the budgets for the Departments of Health and Human
             3286      Services and the Office of the Attorney General, the governor shall consider a separate
             3287      recommendation in the governor's budget for funds to be contracted to:
             3288          (I) local mental health authorities under Section 62A-15-110 ;
             3289          (II) local substance abuse authorities under Section 62A-15-110 ;
             3290          (III) area agencies under Section 62A-3-104.2 ;
             3291          (IV) programs administered directly by and for operation of the Divisions of Substance
             3292      Abuse and Mental Health and Aging and Adult Services;
             3293          (V) local health departments under Title 26A, Chapter 1, Local Health Departments;
             3294      and
             3295          (VI) counties for the operation of Children's Justice Centers under Section 67-5b-102 .
             3296          (B) In the governor's budget recommendations under Subsections (3)(c)(i)(A)(I), (II),
             3297      and (III), the governor shall consider an amount sufficient to grant local health departments,
             3298      local mental health authorities, local substance abuse authorities, and area agencies the same
             3299      percentage increase for wages and benefits that the governor includes in the governor's budget
             3300      for persons employed by the state.
             3301          (C) If the governor does not include in the governor's budget an amount sufficient to
             3302      grant the increase described in Subsection (3)(c)(i)(B), the governor shall include a message to
             3303      the Legislature regarding the governor's reason for not including that amount.
             3304          (ii) (A) In submitting the budget for the Department of Agriculture, the governor shall
             3305      consider an amount sufficient to grant local conservation districts and Utah Association of
             3306      Conservation District employees the same percentage increase for wages and benefits that the
             3307      governor includes in the governor's budget for persons employed by the state.
             3308          (B) If the governor does not include in the governor's budget an amount sufficient to
             3309      grant the increase described in Subsection (3)(c)(ii)(A), the governor shall include a message to
             3310      the Legislature regarding the governor's reason for not including that amount.
             3311          (iii) (A) In submitting the budget for the Utah State Office of Rehabilitation and the
             3312      Division of Services for People with Disabilities, the Division of Child and Family Services,


             3313      and the Division of Juvenile Justice Services within the Department of Human Services, the
             3314      governor shall consider an amount sufficient to grant employees of corporations that provide
             3315      direct services under contract with those divisions, the same percentage increase for
             3316      cost-of-living that the governor includes in the governor's budget for persons employed by the
             3317      state.
             3318          (B) If the governor does not include in the governor's budget an amount sufficient to
             3319      grant the increase described in Subsection (3)(c)(iii)(A), the governor shall include a message
             3320      to the Legislature regarding the governor's reason for not including that amount.
             3321          (iv) (A) The Families, Agencies, and Communities Together Council may propose a
             3322      budget recommendation to the governor for collaborative service delivery systems operated
             3323      under Section 63M-9-402 , as provided under Subsection 63M-9-201 (4)(e).
             3324          (B) The Legislature may, through a specific program schedule, designate funds
             3325      appropriated for collaborative service delivery systems operated under Section 63M-9-402 .
             3326          (v) The governor shall include in the governor's budget the state's portion of the budget
             3327      for the Utah Communications Agency Network established in Title 63C, Chapter 7, Utah
             3328      Communications Agency Network Act.
             3329          (vi) (A) The governor shall include a separate recommendation in the governor's
             3330      budget for funds to maintain the operation and administration of the Utah Comprehensive
             3331      Health Insurance Pool.
             3332          (B) In making the recommendation, the governor may consider:
             3333          (I) actuarial analysis of growth or decline in enrollment projected over a period of at
             3334      least three years;
             3335          (II) actuarial analysis of the medical and pharmacy claims costs projected over a period
             3336      of at least three years;
             3337          (III) the annual Medical Care Consumer Price Index;
             3338          (IV) the annual base budget for the pool established by the Commerce and Revenue
             3339      Appropriations Subcommittee for each fiscal year;
             3340          (V) the growth or decline in insurance premium taxes and fees collected by the State
             3341      Tax Commission and the [Insurance Department] Department of Commerce acting under Title
             3342      31A, Insurance Code, which may delegate this function to the Division of Insurance; and
             3343          (VI) the availability of surplus General Fund revenue under Section 63J-1-312 and


             3344      Subsection 59-14-204 (5)(b).
             3345          (d) (i) The governor may revise all estimates, except those relating to the Legislative
             3346      Department, the Judicial Department, and those providing for the payment of principal and
             3347      interest to the state debt and for the salaries and expenditures specified by the Utah
             3348      Constitution or under the laws of the state.
             3349          (ii) The estimate for the Legislative Department, as certified by the presiding officers
             3350      of both houses, shall be included in the budget without revision by the governor.
             3351          (iii) The estimate for the Judicial Department, as certified by the state court
             3352      administrator, shall also be included in the budget without revision, but the governor may make
             3353      separate recommendations on the estimate.
             3354          (e) The total appropriations requested for expenditures authorized by the budget may
             3355      not exceed the estimated revenues from taxes, fees, and all other sources for the next ensuing
             3356      fiscal year.
             3357          (4) In considering the factors in Subsections (3)(c)(vi)(B)(I), (II), and (III) and
             3358      Subsections (5)(b)(ii)(A), (B), and (C), the governor and the Legislature may consider the
             3359      actuarial data and projections prepared for the board of the Utah Comprehensive Health
             3360      Insurance Pool as it develops its financial statements and projections for each fiscal year.
             3361          (5) (a) In adopting a budget for each fiscal year, the Legislature shall consider an
             3362      amount sufficient to grant local health departments, local mental health authorities, local
             3363      substance abuse authorities, area agencies on aging, conservation districts, and Utah
             3364      Association of Conservation District employees the same percentage increase for wages and
             3365      benefits that is included in the budget for persons employed by the state.
             3366          (b) (i) In adopting a budget each year for the Utah Comprehensive Health Insurance
             3367      Pool, the Legislature shall determine an amount that is sufficient to fund the pool for each
             3368      fiscal year.
             3369          (ii) When making a determination under Subsection (5)(b)(i), the Legislature shall
             3370      consider factors it determines are appropriate, which may include:
             3371          (A) actuarial analysis of growth or decline in enrollment projected over a period of at
             3372      least three years;
             3373          (B) actuarial analysis of the medical and pharmacy claims costs projected over a period
             3374      of at least three years;


             3375          (C) the annual Medical Care Consumer Price Index;
             3376          (D) the annual base budget for the pool established by the Commerce and Revenue
             3377      Appropriations Subcommittee for each fiscal year;
             3378          (E) the growth or decline in insurance premium taxes and fees collected by the tax
             3379      commission and the [insurance department] Department of Commerce acting under Title 31A,
             3380      Insurance Code, which may delegate this function to the Division of Insurance, from the
             3381      previous fiscal year; and
             3382          (F) the availability of surplus General Fund revenue under Section 63J-1-312 and
             3383      Subsection 59-14-204 (5)(b).
             3384          (iii) The funds appropriated by the Legislature to fund the Utah Comprehensive Health
             3385      Insurance Pool as determined under Subsection (5)(b)(i):
             3386          (A) shall be deposited into the fund established by Section 31A-29-120 ; and
             3387          (B) are restricted and are to be used to maintain the operation, administration, and
             3388      management of the Utah Comprehensive Health Insurance Pool created by Section
             3389      31A-29-104 .
             3390          (6) If any item of the budget as enacted is held invalid upon any ground, the invalidity
             3391      does not affect the budget itself or any other item in it.
             3392          Section 37. Section 63K-1-102 is amended to read:
             3393           63K-1-102. Definitions.
             3394          (1) (a) "Absent" means:
             3395          (i) not physically present or not able to be communicated with for 48 hours; or
             3396          (ii) for local government officers, as defined by local ordinances.
             3397          (b) "Absent" does not include a person who can be communicated with via telephone,
             3398      radio, or telecommunications.
             3399          (2) "Attack" means a nuclear, conventional, biological, or chemical warfare action
             3400      against the United States of America or this state.
             3401          (3) "Department" means the Department of Administrative Services, the Department of
             3402      Agriculture and Food, the Alcoholic Beverage Control Commission, the Department of
             3403      Commerce, the Department of Community and Culture, the Department of Corrections, the
             3404      Department of Environmental Quality, the Department of Financial Institutions, the
             3405      Department of Health, the Department of Human Resource Management, the Department of


             3406      Workforce Services, the Labor Commission, the National Guard, [the Department of
             3407      Insurance,] the Department of Natural Resources, the Department of Public Safety, the Public
             3408      Service Commission, the Department of Human Services, the State Tax Commission, the
             3409      Department of Technology Services, the Department of Transportation, any other major
             3410      administrative subdivisions of state government, the State Board of Education, the State Board
             3411      of Regents, the Utah Housing Corporation, the Workers' Compensation Fund, the State
             3412      Retirement Board, and each institution of higher education within the system of higher
             3413      education.
             3414          (4) "Disaster" means a situation causing, or threatening to cause, widespread damage,
             3415      social disruption, or injury or loss of life or property resulting from attack, internal disturbance,
             3416      natural phenomenon, or technological hazard.
             3417          (5) "Division" means the Division of Homeland Security established in Title 53,
             3418      Chapter 2, Part 1, Homeland Security Act.
             3419          (6) "Emergency interim successor" means a person designated by this chapter to
             3420      exercise the powers and discharge the duties of an office when the person legally exercising the
             3421      powers and duties of the office is unavailable.
             3422          (7) "Executive director" means the person with ultimate responsibility for managing
             3423      and overseeing the operations of each department, however denominated.
             3424          (8) "Internal disturbance" means a riot, prison break, terrorism, or strike.
             3425          (9) "Natural phenomenon" means any earthquake, tornado, storm, flood, landslide,
             3426      avalanche, forest or range fire, drought, epidemic, or other catastrophic event.
             3427          (10) (a) "Office" includes all state and local offices, the powers and duties of which are
             3428      defined by constitution, statutes, charters, optional plans, ordinances, articles, or by-laws.
             3429          (b) "Office" does not include the office of governor or the legislative or judicial offices.
             3430          (11) "Place of governance" means the physical location where the powers of an office
             3431      are being exercised.
             3432          (12) "Political subdivision" includes counties, cities, towns, townships, districts,
             3433      authorities, and other public corporations and entities whether organized and existing under
             3434      charter or general law.
             3435          (13) "Political subdivision officer" means a person holding an office in a political
             3436      subdivision.


             3437          (14) "State officer" means the attorney general, the state treasurer, the state auditor, and
             3438      the executive director of each department.
             3439          (15) "Technological hazard" means any hazardous materials accident, mine accident,
             3440      train derailment, air crash, radiation incident, pollution, structural fire, or explosion.
             3441          (16) "Unavailable" means:
             3442          (a) absent from the place of governance during a disaster that seriously disrupts normal
             3443      governmental operations, whether or not that absence or inability would give rise to a vacancy
             3444      under existing constitutional or statutory provisions; or
             3445          (b) as otherwise defined by local ordinance.
             3446          Section 38. Section 63M-1-2503 is amended to read:
             3447           63M-1-2503. Duties related to health system reform.
             3448          The Governor's Office of Economic Development shall coordinate the efforts of the
             3449      Office of Consumer Health Services, the Department of Health, the [Insurance Department]
             3450      Department of Commerce, which may delegate this function to the Division of Insurance, and
             3451      the Department of Workforce Services to assist the Legislature with developing the state's
             3452      strategic plan for health system reform described in Section 63M-1-2505 .
             3453          Section 39. Section 63M-1-2504 is amended to read:
             3454           63M-1-2504. Creation of Office of Consumer Health Services -- Duties.
             3455          (1) There is created within the Governor's Office of Economic Development the Office
             3456      of Consumer Health Services.
             3457          (2) The office shall:
             3458          (a) in cooperation with the [Insurance Department] Department of Commerce, which
             3459      may delegate this function to the Division of Insurance, the Department of Health, and the
             3460      Department of Workforce Services, and in accordance with the electronic standards developed
             3461      under Sections 31A-22-635 and 63M-1-2506 , create a Health Insurance Exchange that:
             3462          (i) is capable of providing access to private and government health insurance websites
             3463      and their electronic application forms and submission procedures;
             3464          (ii) provides a consumer comparison of and enrollment in a health benefit plan posted
             3465      on the Health Insurance Exchange by an insurer for the:
             3466          (A) small employer group market;
             3467          (B) the individual market; and


             3468          (C) the defined contribution arrangement market; and
             3469          (iii) includes information and a link to enrollment in premium assistance programs and
             3470      other government assistance programs;
             3471          (b) facilitate a private sector method for the collection of health insurance premium
             3472      payments made for a single policy by multiple payers, including the policyholder, one or more
             3473      employers of one or more individuals covered by the policy, government programs, and others
             3474      by educating employers and insurers about collection services available through private
             3475      vendors, including financial institutions;
             3476          (c) assist employers with a free or low cost method for establishing mechanisms for the
             3477      purchase of health insurance by employees using pre-tax dollars;
             3478          (d) periodically convene health care providers, payers, and consumers to monitor the
             3479      progress being made regarding demonstration projects for health care delivery and payment
             3480      reform;
             3481          (e) establish a list on the Health Insurance Exchange of insurance producers who, in
             3482      accordance with Section 31A-30-209 , are appointed producers for the defined contribution
             3483      arrangement market on the Health Insurance Exchange; and
             3484          (f) report to the Business and Labor Interim Committee and the Health System Reform
             3485      Task Force prior to November 1, 2010, and prior to the Legislative interim day in November of
             3486      each year thereafter regarding:
             3487          (i) the operations of the Health Insurance Exchange required by this chapter; and
             3488          (ii) the progress of the demonstration projects for health care payment and delivery
             3489      reform.
             3490          (3) The office:
             3491          (a) may not:
             3492          (i) regulate health insurers, health insurance plans, or health insurance producers;
             3493          (ii) adopt administrative rules, except as provided in Section 63M-1-2506 ; or
             3494          (iii) act as an appeals entity for resolving disputes between a health insurer and an
             3495      insured; and
             3496          (b) may establish and collect a fee in accordance with Section 63J-1-504 for the
             3497      transaction cost of:
             3498          (i) processing an application for a health benefit plan from the Internet portal to an


             3499      insurer; and
             3500          (ii) accepting, processing, and submitting multiple premium payment sources.
             3501          Section 40. Section 63M-1-2506 is amended to read:
             3502           63M-1-2506. Health benefit plan information on Health Insurance Exchange --
             3503      Insurer transparency.
             3504          (1) (a) The office shall adopt administrative rules in accordance with Title 63G,
             3505      Chapter 3, Utah Administrative Rulemaking Act, that:
             3506          (i) establish uniform electronic standards for:
             3507          (A) a health insurer to use when:
             3508          (I) transmitting information to:
             3509          (Aa) the [Insurance Department] Department of Commerce under Title 31A, Insurance
             3510      Code, which may delegate this function to the Division of Insurance, under Subsection
             3511      31A-22-613.5 (2)(a)(ii); and
             3512          (Bb) the Health Insurance Exchange as required by this section;
             3513          (II) receiving information from the Health Insurance Exchange; and
             3514          (III) receiving or transmitting the universal health application to or from the Health
             3515      Insurance Exchange;
             3516          (B) facilitating the transmission and receipt of premium payments from multiple
             3517      sources in the defined contribution arrangement market; and
             3518          (C) the use of the uniform health insurance application required by Section
             3519      31A-22-635 on the Health Insurance Exchange;
             3520          (ii) designate the level of detail that would be helpful for a concise consumer
             3521      comparison of the items described in Subsections (4) and (5) on the Health Insurance
             3522      Exchange;
             3523          (iii) assist the risk adjuster board created under Title 31A, Chapter 42, Defined
             3524      Contribution Risk Adjuster Act, and carriers participating in the defined contribution market on
             3525      the Health Insurance Exchange with the determination of when an employer is eligible to
             3526      participate in the Health Insurance Exchange under Title 31A, Chapter 30, Part 2, Defined
             3527      Contribution Arrangements; and
             3528          (iv) create an advisory board to advise the exchange concerning the operation of the
             3529      exchange and transparency issues with the following members:


             3530          (A) two health producers who are registered with the Health Insurance Exchange;
             3531          (B) two consumers;
             3532          (C) one representative from a large insurer who participates on the exchange;
             3533          (D) one representative from a small insurer who participates on the exchange;
             3534          (E) one representative from the [Insurance Department] Department of Commerce,
             3535      which may delegate this function to the Division of Insurance; and
             3536          (F) one representative from the Department of Health.
             3537          (b) The office shall post or facilitate the posting of:
             3538          (i) the information required by this section on the Health Insurance Exchange created
             3539      by this part; and
             3540          (ii) links to websites that provide cost and quality information from the Department of
             3541      Health Data Committee or neutral entities with a broad base of support from the provider and
             3542      payer communities.
             3543          (2) A health insurer shall use the uniform electronic standards when transmitting
             3544      information to the Health Insurance Exchange or receiving information from the Health
             3545      Insurance Exchange.
             3546          (3) (a) (i) An insurer who participates in the defined contribution arrangement market
             3547      under Title 31A, Chapter 30, Part 2, Defined Contribution Arrangements, shall post all plans
             3548      offered in the defined contribution arrangement market on the Health Insurance Exchange and
             3549      shall comply with the provisions of this section.
             3550          (ii) Beginning January 1, 2013, an insurer who offers a health benefit plan to a small
             3551      employer group in the state shall:
             3552          (A) post the health benefit plans in which the insurer is enrolling new groups on the
             3553      Health Insurance Exchange; and
             3554          (B) comply with the provisions of this section.
             3555          (b) An insurer who offers individual health benefit plans under Title 31A, Chapter 30,
             3556      Part 1, Individual and Small Employer Group:
             3557          (i) shall post on the Health Insurance Exchange the basic benefit plan required by
             3558      Section 31A-22-613.5 ; and
             3559          (ii) may publish on the Health Insurance Exchange any other health benefit plans that it
             3560      offers in the individual market.


             3561          (c) An insurer who posts a health benefit plan on the Health Insurance Exchange:
             3562          (i) shall comply with the provisions of this section for every health benefit plan it posts
             3563      on the Health Insurance Exchange; and
             3564          (ii) may not offer products on the Health Insurance Exchange that are not health benefit
             3565      plans.
             3566          (4) A health insurer shall provide the Health Insurance Exchange with the following
             3567      information for each health benefit plan submitted to the Health Insurance Exchange:
             3568          (a) plan design, benefits, and options offered by the health benefit plan including state
             3569      mandates the plan does not cover;
             3570          (b) provider networks;
             3571          (c) wellness programs and incentives; and
             3572          (d) descriptions of prescription drug benefits, exclusions, or limitations.
             3573          (5) (a) An insurer offering any health benefit plan in the state shall submit the
             3574      information described in Subsection (5)(b) to the [Insurance Department] Department of
             3575      Commerce in the electronic format required by Subsection (1).
             3576          (b) An insurer who offers a health benefit plan in the state shall submit to the Health
             3577      Insurance Exchange the following operational measures:
             3578          (i) the percentage of claims paid by the insurer within 30 days of the date a claim is
             3579      submitted to the insurer for the prior year; and
             3580          (ii) for all health benefit plans offered by the insurer in the state, the claims denial and
             3581      insurer transparency information developed in accordance with Subsection 31A-22-613.5 (5).
             3582          (c) The [Insurance Department] Department of Commerce shall forward to the Health
             3583      Insurance Exchange the information submitted by an insurer in accordance with this section
             3584      and Section 31A-22-613.5 .
             3585          (6) The [Insurance Department] Department of Commerce shall post on the Health
             3586      Insurance Exchange the [Insurance Department's] Department of Commerce's solvency rating
             3587      for each insurer who posts a health benefit plan on the Health Insurance Exchange. The
             3588      solvency rating for each carrier shall be based on methodology established by the [Insurance
             3589      Department] Department of Commerce by administrative rule and shall be updated each
             3590      calendar year.
             3591          (7) The commissioner may request information from an insurer under Section


             3592      31A-22-613.5 to verify the data submitted to the [Insurance Department] Department of
             3593      Commerce and to the Health Insurance Exchange under this section.
             3594          (8) A health insurer shall accept and process an application for a health benefit plan
             3595      from the Health Insurance Exchange in accordance with this section and Section 31A-22-635 .
             3596          Section 41. Section 67-19-6.7 is amended to read:
             3597           67-19-6.7. Overtime policies for state employees.
             3598          (1) As used in this section:
             3599          (a) "Accrued overtime hours" means:
             3600          (i) for nonexempt employees, overtime hours earned during a fiscal year that, at the end
             3601      of the fiscal year, have not been paid and have not been taken as time off by the nonexempt
             3602      state employee who accrued them; and
             3603          (ii) for exempt employees, overtime hours earned during an overtime year.
             3604          (b) "Appointed official" means:
             3605          (i) each department executive director and deputy director, each division director, and
             3606      each member of a board or commission; and
             3607          (ii) any other person employed by a department who is appointed by, or whose
             3608      appointment is required by law to be approved by, the governor and who:
             3609          (A) is paid a salary by the state; and
             3610          (B) who exercises managerial, policy-making, or advisory responsibility.
             3611          (c) "Department" means the Department of Administrative Services, the Department of
             3612      Corrections, the Department of Financial Institutions, the Department of Alcoholic Beverage
             3613      Control, [the Insurance Department,] the Public Service Commission, the Labor Commission,
             3614      the Department of Agriculture and Food, the Department of Human Services, the State Board
             3615      of Education, the Department of Natural Resources, the Department of Technology Services,
             3616      the Department of Transportation, the Department of Commerce, the Department of Workforce
             3617      Services, the State Tax Commission, the Department of Community and Culture, the
             3618      Department of Health, the National Guard, the Department of Environmental Quality, the
             3619      Department of Public Safety, the Department of Human Resource Management, the
             3620      Commission on Criminal and Juvenile Justice, all merit employees except attorneys in the
             3621      Office of the Attorney General, merit employees in the Office of the State Treasurer, merit
             3622      employees in the Office of the State Auditor, Department of Veterans' Affairs, and the Board of


             3623      Pardons and Parole.
             3624          (d) "Elected official" means any person who is an employee of the state because the
             3625      person was elected by the registered voters of Utah to a position in state government.
             3626          (e) "Exempt employee" means a state employee who is exempt as defined by the Fair
             3627      Labor Standards Act of 1978, 29 U.S.C. [Section] Sec. 201 et seq.
             3628          (f) "FLSA" means the Fair Labor Standards Act of 1978, 29 U.S.C. [Section] Sec. 201
             3629      et seq.
             3630          (g) "FLSA agreement" means the agreement authorized by the Fair Labor Standards
             3631      Act of 1978, 29 U.S.C. [Section] Sec. 201 et seq., by which a nonexempt employee elects the
             3632      form of compensation the nonexempt employee will receive for overtime.
             3633          (h) "Nonexempt employee" means a state employee who is nonexempt as defined by
             3634      the Department of Human Resource Management applying FLSA requirements.
             3635          (i) "Overtime" means actual time worked in excess of the employee's defined work
             3636      period.
             3637          (j) "Overtime year" means the year determined by a department under Subsection
             3638      (4)(b) at the end of which an exempt employee's accrued overtime lapses.
             3639          (k) "State employee" means every person employed by a department who is not:
             3640          (i) an appointed official;
             3641          (ii) an elected official;
             3642          (iii) a member of a board or commission who is paid only on a per diem or travel
             3643      expenses basis; or
             3644          (iv) employed on a contractual basis at the State Office of Education.
             3645          (l) "Uniform annual date" means the date when an exempt employee's accrued
             3646      overtime lapses.
             3647          (m) "Work period" means:
             3648          (i) for all nonexempt employees, except law enforcement and hospital employees, a
             3649      consecutive seven day 24 hour work period of 40 hours;
             3650          (ii) for all exempt employees, a 14 day, 80 hour payroll cycle; and
             3651          (iii) for nonexempt law enforcement and hospital employees, the period established by
             3652      each department by rule for those employees according to the requirements of the Fair Labor
             3653      Standards Act of 1978, 29 U.S.C. [Section] Sec. 201 et seq.


             3654          (2) Each department shall compensate each state employee who works overtime by
             3655      complying with the requirements of this section.
             3656          (3) (a) Each department shall negotiate and obtain a signed FLSA agreement from each
             3657      nonexempt employee.
             3658          (b) In the FLSA agreement, the nonexempt employee shall elect either to be
             3659      compensated for overtime by:
             3660          (i) taking time off work at the rate of one and one-half hour off for each overtime hour
             3661      worked; or
             3662          (ii) being paid for the overtime worked at the rate of one and one-half times the rate per
             3663      hour that the state employee receives for nonovertime work.
             3664          (c) Any nonexempt employee who elects to take time off under this Subsection (3)
             3665      shall be paid for any overtime worked in excess of the cap established by the Department of
             3666      Human Resource Management.
             3667          (d) Before working any overtime, each nonexempt employee shall obtain authorization
             3668      to work overtime from the employee's immediate supervisor.
             3669          (e) Each department shall:
             3670          (i) for employees who elect to be compensated with time off for overtime, allow
             3671      overtime earned during a fiscal year to be accumulated; and
             3672          (ii) for employees who elect to be paid for overtime worked, pay them for overtime
             3673      worked in the paycheck for the pay period in which the employee worked the overtime.
             3674          (f) If the department pays a nonexempt employee for overtime, the department shall
             3675      charge that payment to the department's budget.
             3676          (g) At the end of each fiscal year, the Division of Finance shall total all the accrued
             3677      overtime hours for nonexempt employees and charge that total against the appropriate fund or
             3678      subfund.
             3679          (4) (a) (i) Except as provided in Subsection (4)(a)(ii), each department shall
             3680      compensate exempt employees who work overtime by granting them time off at the rate of one
             3681      hour off for each hour of overtime worked.
             3682          (ii) The executive director of the Department of Human Resource Management may
             3683      grant limited exceptions to this requirement, where work circumstances dictate, by authorizing
             3684      a department to pay employees for overtime worked at the rate per hour that the employee


             3685      receives for nonovertime work, if the department has funds available.
             3686          (b) (i) Each department shall:
             3687          (A) establish in its written human resource policies a uniform annual date for each
             3688      division that is at the end of any pay period; and
             3689          (B) communicate the uniform annual date to its employees.
             3690          (ii) If any department fails to establish a uniform annual date as required by this
             3691      Subsection (4), the executive director of the Department of Human Resource Management, in
             3692      conjunction with the director of the Division of Finance, shall establish the date for that
             3693      department.
             3694          (c) (i) Any overtime earned under this Subsection (4) is not an entitlement, is not a
             3695      benefit, and is not a vested right.
             3696          (ii) A court may not construe the overtime for exempt employees authorized by this
             3697      Subsection (4) as an entitlement, a benefit, or as a vested right.
             3698          (d) At the end of the overtime year, upon transfer to another department at any time,
             3699      and upon termination, retirement, or other situations where the employee will not return to
             3700      work before the end of the overtime year:
             3701          (i) any of an exempt employee's overtime that is more than the maximum established
             3702      by the Department of Human Resource Management rule lapses; and
             3703          (ii) unless authorized by the executive director of the Department of Human Resource
             3704      Management under Subsection (4)(a)(ii), a department may not compensate the exempt
             3705      employee for that lapsed overtime by paying the employee for the overtime or by granting the
             3706      employee time off for the lapsed overtime.
             3707          (e) Before working any overtime, each exempt employee shall obtain authorization to
             3708      work overtime from the exempt employee's immediate supervisor.
             3709          (f) If the department pays an exempt employee for overtime under authorization from
             3710      the executive director of the Department of Human Resource Management, the department
             3711      shall charge that payment to the department's budget in the pay period earned.
             3712          (5) The Department of Human Resource Management shall:
             3713          (a) ensure that the provisions of the FLSA and this section are implemented throughout
             3714      state government;
             3715          (b) determine, for each state employee, whether that employee is exempt, nonexempt,


             3716      law enforcement, or has some other status under the FLSA;
             3717          (c) in coordination with modifications to the systems operated by the Division of
             3718      Finance, make rules:
             3719          (i) establishing procedures for recording overtime worked that comply with FLSA
             3720      requirements;
             3721          (ii) establishing requirements governing overtime worked while traveling and
             3722      procedures for recording that overtime that comply with FLSA requirements;
             3723          (iii) establishing requirements governing overtime worked if the employee is "on call"
             3724      and procedures for recording that overtime that comply with FLSA requirements;
             3725          (iv) establishing requirements governing overtime worked while an employee is being
             3726      trained and procedures for recording that overtime that comply with FLSA requirements;
             3727          (v) subject to the FLSA, establishing the maximum number of hours that a nonexempt
             3728      employee may accrue before a department is required to pay the employee for the overtime
             3729      worked;
             3730          (vi) subject to the FLSA, establishing the maximum number of overtime hours for an
             3731      exempt employee that do not lapse; and
             3732          (vii) establishing procedures for adjudicating appeals of any FLSA determinations
             3733      made by the Department of Human Resource Management as required by this section;
             3734          (d) monitor departments for compliance with the FLSA; and
             3735          (e) recommend to the Legislature and the governor any statutory changes necessary
             3736      because of federal government action.
             3737          (6) In coordination with the procedures for recording overtime worked established in
             3738      rule by the Department of Human Resource Management, the Division of Finance shall modify
             3739      its payroll and human resource systems to accommodate those procedures.
             3740          (a) Notwithstanding the procedures and requirements of Title 63G, Chapter 4,
             3741      Administrative Procedures Act, Section 67-19-31 , and Section 67-19a-301 , any employee who
             3742      is aggrieved by the FLSA designation made by the Department of Human Resource
             3743      Management as required by this section may appeal that determination to the executive director
             3744      of the Department of Human Resource Management by following the procedures and
             3745      requirements established in Department of Human Resource Management rule.
             3746          (b) Upon receipt of an appeal under this section, the executive director shall notify the


             3747      executive director of the employee's department that the appeal has been filed.
             3748          (c) If the employee is aggrieved by the decision of the executive director of the
             3749      Department of Human Resource Management, the employee shall appeal that determination to
             3750      the Department of Labor, Wage and Hour Division, according to the procedures and
             3751      requirements of federal law.
             3752          Section 42. Section 67-19c-101 is amended to read:
             3753           67-19c-101. Department award program.
             3754          (1) As used in this section:
             3755          (a) "Department" means the Department of Administrative Services, the Department of
             3756      Agriculture and Food, the Department of Alcoholic Beverage Control, the Department of
             3757      Commerce, the Department of Community and Culture, the Department of Corrections, the
             3758      Department of Workforce Services, the Department of Environmental Quality, the Department
             3759      of Financial Institutions, the Department of Health, the Department of Human Resource
             3760      Management, the Department of Human Services, [the Insurance Department,] the National
             3761      Guard, the Department of Natural Resources, the Department of Public Safety, the Public
             3762      Service Commission, the Labor Commission, the State Board of Education, the State Board of
             3763      Regents, the State Tax Commission, the Department of Technology Services, and the
             3764      Department of Transportation.
             3765          (b) "Department head" means the individual or body of individuals in whom the
             3766      ultimate legal authority of the department is vested by law.
             3767          (2) There is created a department awards program to award an outstanding employee in
             3768      each department of state government.
             3769          (3) (a) By April 1 of each year, each department head shall solicit nominations for
             3770      outstanding employee of the year for [his] the department head's department from the
             3771      employees in his department.
             3772          (b) By July 1 of each year, the department head shall:
             3773          (i) select a person from the department to receive the outstanding employee of the year
             3774      award using the criteria established in Subsection (3)(c); and
             3775          (ii) announce the recipient of the award to [his] the department head's employees.
             3776          (c) Department heads shall make the award to a person who demonstrates:
             3777          (i) extraordinary competence in performing [his] the person's function;


             3778          (ii) creativity in identifying problems and devising workable, cost-effective solutions to
             3779      them;
             3780          (iii) excellent relationships with the public and other employees;
             3781          (iv) a commitment to serving the public as the client; and
             3782          (v) a commitment to economy and efficiency in government.
             3783          (4) (a) The Department of Human Resource Management shall divide any
             3784      appropriation for outstanding department employee awards that it receives from the Legislature
             3785      equally among the departments.
             3786          (b) If the department receives money from the Department of Human Resource
             3787      Management or if the department budget allows, the department head shall provide the
             3788      employee with a bonus, a plaque, or some other suitable acknowledgement of the award.
             3789          (5) (a) The department head may name the award after an exemplary present or former
             3790      employee of the department.
             3791          (b) A department head may not name the award for [himself] the department head or
             3792      for any relative as defined in Section 52-3-1 .
             3793          (c) Any awards or award programs existing in any department as of May 3, 1993, shall
             3794      be modified to conform to the requirements of this section.
             3795          Section 43. Section 67-22-2 is amended to read:
             3796           67-22-2. Compensation -- Other state officers.
             3797          (1) As used in this section:
             3798          (a) "Appointed executive" means the:
             3799          (i) Commissioner of the Department of Agriculture and Food;
             3800          [(ii) Commissioner of the Insurance Department;]
             3801          [(iii)] (ii) Commissioner of the Labor Commission;
             3802          [(iv)] (iii) Director, Alcoholic Beverage Control Commission;
             3803          [(v)] (iv) Commissioner of the Department of Financial Institutions;
             3804          [(vi)] (v) Executive Director, Department of Commerce;
             3805          [(vii)] (vi) Executive Director, Commission on Criminal and Juvenile Justice;
             3806          [(viii)] (vii) Adjutant General;
             3807          [(ix)] (viii) Executive Director, Department of Community and Culture;
             3808          [(x)] (ix) Executive Director, Department of Corrections;


             3809          [(xi)] (x) Commissioner, Department of Public Safety;
             3810          [(xii)] (xi) Executive Director, Department of Natural Resources;
             3811          [(xiii)] (xii) Director, Governor's Office of Planning and Budget;
             3812          [(xiv)] (xiii) Executive Director, Department of Administrative Services;
             3813          [(xv)] (xiv) Executive Director, Department of Human Resource Management;
             3814          [(xvi)] (xv) Executive Director, Department of Environmental Quality;
             3815          [(xvii)] (xvi) Director, Governor's Office of Economic Development;
             3816          [(xviii)] (xvii) Executive Director, Utah Science Technology and Research Governing
             3817      Authority;
             3818          [(xix)] (xviii) Executive Director, Department of Workforce Services;
             3819          [(xx)] (xix) Executive Director, Department of Health, Nonphysician;
             3820          [(xxi)] (xx) Executive Director, Department of Human Services;
             3821          [(xxii)] (xxi) Executive Director, Department of Transportation;
             3822          [(xxiii)] (xxii) Executive Director, Department of Technology Services; and
             3823          [(xxiv)] (xxiii) Executive Director, Department of Veterans Affairs.
             3824          (b) "Board or commission executive" means:
             3825          (i) Members, Board of Pardons and Parole;
             3826          (ii) Chair, State Tax Commission;
             3827          (iii) Commissioners, State Tax Commission;
             3828          (iv) Executive Director, State Tax Commission;
             3829          (v) Chair, Public Service Commission; and
             3830          (vi) Commissioners, Public Service Commission.
             3831          (c) "Deputy" means the person who acts as the appointed executive's second in
             3832      command as determined by the Department of Human Resource Management.
             3833          (2) (a) The executive director of the Department of Human Resource Management
             3834      shall:
             3835          (i) before October 31 of each year, recommend to the governor a compensation plan for
             3836      the appointed executives and the board or commission executives; and
             3837          (ii) base those recommendations on market salary studies conducted by the Department
             3838      of Human Resource Management.
             3839          (b) (i) The Department of Human Resource Management shall determine the salary


             3840      range for the appointed executives by:
             3841          (A) identifying the salary range assigned to the appointed executive's deputy;
             3842          (B) designating the lowest minimum salary from those deputies' salary ranges as the
             3843      minimum salary for the appointed executives' salary range; and
             3844          (C) designating 105% of the highest maximum salary range from those deputies' salary
             3845      ranges as the maximum salary for the appointed executives' salary range.
             3846          (ii) If the deputy is a medical doctor, the Department of Human Resource Management
             3847      may not consider that deputy's salary range in designating the salary range for appointed
             3848      executives.
             3849          (c) In establishing the salary ranges for board or commission executives, the
             3850      Department of Human Resource Management shall set the maximum salary in the salary range
             3851      for each of those positions at 90% of the salary for district judges as established in the annual
             3852      appropriation act under Section 67-8-2 .
             3853          (3) (a) (i) Except as provided in Subsection (3)(a)(ii), the governor shall establish a
             3854      specific salary for each appointed executive within the range established under Subsection
             3855      (2)(b).
             3856          (ii) If the executive director of the Department of Health is a physician, the governor
             3857      shall establish a salary within the highest physician salary range established by the Department
             3858      of Human Resource Management.
             3859          (iii) The governor may provide salary increases for appointed executives within the
             3860      range established by Subsection (2)(b) and identified in Subsection (3)(a)(ii).
             3861          (b) The governor shall apply the same overtime regulations applicable to other FLSA
             3862      exempt positions.
             3863          (c) The governor may develop standards and criteria for reviewing the appointed
             3864      executives.
             3865          (4) Salaries for other Schedule A employees, as defined in Section 67-19-15 , that are
             3866      not provided for in this chapter, or in Title 67, Chapter 8, Utah Elected Official and Judicial
             3867      Salary Act, shall be established as provided in Section 67-19-15 .
             3868          (5) (a) The Legislature fixes benefits for the appointed executives and the board or
             3869      commission executives as follows:
             3870          (i) the option of participating in a state retirement system established by Title 49, Utah


             3871      State Retirement and Insurance Benefit Act, or in a deferred compensation plan administered
             3872      by the State Retirement Office in accordance with the Internal Revenue Code and its
             3873      accompanying rules and regulations;
             3874          (ii) health insurance;
             3875          (iii) dental insurance;
             3876          (iv) basic life insurance;
             3877          (v) unemployment compensation;
             3878          (vi) workers' compensation;
             3879          (vii) required employer contribution to Social Security;
             3880          (viii) long-term disability income insurance;
             3881          (ix) the same additional state-paid life insurance available to other noncareer service
             3882      employees;
             3883          (x) the same severance pay available to other noncareer service employees;
             3884          (xi) the same leave, holidays, and allowances granted to Schedule B state employees as
             3885      follows:
             3886          (A) sick leave;
             3887          (B) converted sick leave if accrued prior to January 1, 2014;
             3888          (C) educational allowances;
             3889          (D) holidays; and
             3890          (E) annual leave except that annual leave shall be accrued at the maximum rate
             3891      provided to Schedule B state employees;
             3892          (xii) the option to convert accumulated sick leave to cash or insurance benefits as
             3893      provided by law or rule upon resignation or retirement according to the same criteria and
             3894      procedures applied to Schedule B state employees;
             3895          (xiii) the option to purchase additional life insurance at group insurance rates according
             3896      to the same criteria and procedures applied to Schedule B state employees; and
             3897          (xiv) professional memberships if being a member of the professional organization is a
             3898      requirement of the position.
             3899          (b) Each department shall pay the cost of additional state-paid life insurance for its
             3900      executive director from its existing budget.
             3901          (6) The Legislature fixes the following additional benefits:


             3902          (a) for the executive director of the State Tax Commission a vehicle for official and
             3903      personal use;
             3904          (b) for the executive director of the Department of Transportation a vehicle for official
             3905      and personal use;
             3906          (c) for the executive director of the Department of Natural Resources a vehicle for
             3907      commute and official use;
             3908          (d) for the Commissioner of Public Safety:
             3909          (i) an accidental death insurance policy if POST certified; and
             3910          (ii) a public safety vehicle for official and personal use;
             3911          (e) for the executive director of the Department of Corrections:
             3912          (i) an accidental death insurance policy if POST certified; and
             3913          (ii) a public safety vehicle for official and personal use;
             3914          (f) for the Adjutant General a vehicle for official and personal use; and
             3915          (g) for each member of the Board of Pardons and Parole a vehicle for commute and
             3916      official use.
             3917          Section 44. Section 70C-6-105 is amended to read:
             3918           70C-6-105. Maximum charge by creditor for insurance.
             3919          If a creditor contracts for or receives a separate charge for insurance, the amount
             3920      charged the debtor for the insurance may not exceed the premium to be charged by the insurer,
             3921      without deduction for commissions, as computed at the time the charge to the debtor is
             3922      determined, conforming to any rate filings required by law and made by the insurer with the
             3923      [commissioner of insurance] Department of Commerce under Title 31A, Insurance Code,
             3924      which may delegate this function to the Division of Insurance.
             3925          Section 45. Section 70C-6-106 is amended to read:
             3926           70C-6-106. Refund or credit required -- Amount.
             3927          (1) A debtor or [his] the debtor's estate is entitled to any rebate or refund due from an
             3928      insurer and to any unearned part of a separate charge for insurance previously paid by the
             3929      debtor, resulting from the prepayment of a consumer credit debt, except when all refunds and
             3930      credits due to the debtor under this title amount to less than $5.
             3931          (2) A creditor shall promptly make or cause to be made an appropriate refund or credit
             3932      to the debtor with respect to any separate charge made to him for insurance if:


             3933          (a) the insurance is not provided or is provided for a shorter term than that for which
             3934      the charge to a debtor for insurance was computed; or
             3935          (b) the insurance terminates prior to the end of the term for which it was written
             3936      because of prepayment in full or otherwise.
             3937          (3) All refunds or credit required by this section shall be computed according to a
             3938      method prescribed or approved by the [Insurance Department] Department of Commerce under
             3939      Title 31A, Insurance Code, which may delegate this function to the Division of Insurance, or
             3940      formula filed by the insurer with the [Insurance Department] Department of Commerce at least
             3941      30 days before any debtor's right to a refund or credit becomes determinable, unless the method
             3942      or formula is employed after the [Insurance Department] Department of Commerce notifies the
             3943      insurer that the method or formula has been disapproved.
             3944          (4) Except as provided in Subsection (1), a creditor is not obligated to account to a
             3945      debtor for any portion of a separate charge for insurance when:
             3946          (a) the insurance is terminated by performance of the insurer's obligation;
             3947          (b) the creditor pays or accounts for premiums to the insurer in amounts and at times
             3948      determined by the agreement between them; or
             3949          (c) the creditor receives directly or indirectly under any policy of insurance a gain or
             3950      advantage not prohibited by law.
             3951          Section 46. Section 70C-6-203 is amended to read:
             3952           70C-6-203. Filing and approval of rates and forms.
             3953          (1) A creditor may use a form or a schedule of premium rates or charges concerning
             3954      consumer credit insurance only if the form or schedule has been on file with the [Insurance
             3955      Department] Department of Commerce under Title 31A, Insurance Code, which may delegate
             3956      this function to the Division of Insurance, for at least 30 days and has not been disapproved by
             3957      the [Insurance Department] Department of Commerce or has been specifically approved by the
             3958      [Insurance Department] Department of Commerce at any time after filing.
             3959          (2) Except as provided in Subsection (3), all policies, certificates of insurance, notices
             3960      of proposed insurance, applications for insurance, endorsements and riders relating to
             3961      consumer credit insurance delivered or issued for delivery in this state, and the schedules of
             3962      premium rates or charges pertaining to them, shall be filed by the insurer with the [Insurance
             3963      Department] Department of Commerce. Within 30 days after the filing of any form or


             3964      schedule, the [Insurance Department] Department of Commerce shall disapprove it if the
             3965      premium rates or charges are unreasonable in relation to the benefits provided under the form,
             3966      or if the form contains provisions which are unjust, unfair, inequitable, or deceptive, or
             3967      encourages misrepresentation, or are contrary to any provisions of this title, or Title 31A,
             3968      Chapter 22, Part 8, Credit Life and Accident and Health Insurance, or of any rule adopted under
             3969      that act or this title.
             3970          (3) If a group policy has been delivered in another state, the forms to be filed by the
             3971      insurer with the [Insurance Department] Department of Commerce are the group certificates
             3972      and notices of proposed insurance. The [Insurance Department] Department of Commerce
             3973      shall approve those certificates and notices if:
             3974          (a) they provide the information that would be required if the group policy were
             3975      delivered in this state; and
             3976          (b) the applicable premium rates or charges do not exceed those established by the
             3977      [Insurance Department's] rules of the Department of Commerce under Title 31A, Insurance
             3978      Code.
             3979          Section 47. Section 72-6-107.5 is amended to read:
             3980           72-6-107.5. Construction of improvements of highway -- Contracts -- Health
             3981      insurance coverage.
             3982          (1) For purposes of this section:
             3983          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             3984      34A-2-104 who:
             3985          (i) works at least 30 hours per calendar week; and
             3986          (ii) meets employer eligibility waiting requirements for health care insurance which
             3987      may not exceed the first day of the calendar month following 90 days from the date of hire.
             3988          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             3989          (c) "Qualified health insurance coverage" means at the time the contract is entered into
             3990      or renewed:
             3991          (i) a health benefit plan and employer contribution level with a combined actuarial
             3992      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             3993      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and
             3994      a contribution level of 50% of the premium for the employee and the dependents of the


             3995      employee who reside or work in the state, in which:
             3996          (A) the employer pays at least 50% of the premium for the employee and the
             3997      dependents of the employee who reside or work in the state; and
             3998          (B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):
             3999          (I) rather that the benchmark plan's deductible, and the benchmark plan's out-of-pocket
             4000      maximum based on income levels:
             4001          (Aa) the deductible is $750 per individual and $2,250 per family; and
             4002          (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
             4003          (II) dental coverage is not required; and
             4004          (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do not
             4005      apply; or
             4006          (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
             4007      deductible that is either:
             4008          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             4009      or
             4010          (II) a deductible that is higher than the lowest deductible permitted for a federally
             4011      qualified high deductible health plan, but includes an employer contribution to a health savings
             4012      account in a dollar amount at least equal to the dollar amount difference between the lowest
             4013      deductible permitted for a federally qualified high deductible plan and the deductible for the
             4014      employer offered federally qualified high deductible plan;
             4015          (B) an out-of-pocket maximum that does not exceed three times the amount of the
             4016      annual deductible; and
             4017          (C) under which the employer pays 75% of the premium for the employee and the
             4018      dependents of the employee who work or reside in the state.
             4019          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             4020          (2) (a) Except as provided in Subsection (3), this section applies to contracts entered
             4021      into by the department on or after July 1, 2009, for construction or design of highways and to a
             4022      prime contractor or to a subcontractor in accordance with Subsection (2)(b).
             4023          (b) (i) A prime contractor is subject to this section if the prime contract is in the
             4024      amount of $1,500,000 or greater.
             4025          (ii) A subcontractor is subject to this section if a subcontract is in the amount of


             4026      $750,000 or greater.
             4027          (3) This section does not apply if:
             4028          (a) the application of this section jeopardizes the receipt of federal funds;
             4029          (b) the contract is a sole source contract; or
             4030          (c) the contract is an emergency procurement.
             4031          (4) (a) This section does not apply to a change order as defined in Section [ 63G-6-102 ]
             4032      63G-6-103 , or a modification to a contract, when the contract does not meet the initial
             4033      threshold required by Subsection (2).
             4034          (b) A person who intentionally uses change orders or contract modifications to
             4035      circumvent the requirements of Subsection (2) is guilty of an infraction.
             4036          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the department that
             4037      the contractor has and will maintain an offer of qualified health insurance coverage for the
             4038      contractor's employees and the employees' dependents during the duration of the contract.
             4039          (b) If a subcontractor of the contractor is subject to Subsection (2), the contractor shall
             4040      demonstrate to the department that the subcontractor has and will maintain an offer of qualified
             4041      health insurance coverage for the subcontractor's employees and the employees' dependents
             4042      during the duration of the contract.
             4043          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
             4044      the duration of the contract is subject to penalties in accordance with administrative rules
             4045      adopted by the department under Subsection (6).
             4046          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             4047      requirements of Subsection (5)(b).
             4048          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             4049      the duration of the contract is subject to penalties in accordance with administrative rules
             4050      adopted by the department under Subsection (6).
             4051          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             4052      requirements of Subsection (5)(a).
             4053          (6) The department shall adopt administrative rules:
             4054          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             4055          (b) in coordination with:
             4056          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;


             4057          (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
             4058          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             4059          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             4060          (v) a public transit district in accordance with Section 17B-2a-818.5 ; and
             4061          (vi) the Legislature's Administrative Rules Review Committee; and
             4062          (c) which establish:
             4063          (i) the requirements and procedures a contractor must follow to demonstrate to the
             4064      department compliance with this section which shall include:
             4065          (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a) or
             4066      (b) more than twice in any 12-month period; and
             4067          (B) that the actuarially equivalent determination required in Subsection (1) is met by
             4068      the contractor if the contractor provides the department or division with a written statement of
             4069      actuarial equivalency from either:
             4070          (I) the [Utah Insurance Department] Department of Commerce under Title 31A,
             4071      Insurance Code, which may delegate this function to the Division of Insurance;
             4072          (II) an actuary selected by the contractor or the contractor's insurer; or
             4073          (III) an underwriter who is responsible for developing the employer group's premium
             4074      rates;
             4075          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             4076      violates the provisions of this section, which may include:
             4077          (A) a three-month suspension of the contractor or subcontractor from entering into
             4078      future contracts with the state upon the first violation;
             4079          (B) a six-month suspension of the contractor or subcontractor from entering into future
             4080      contracts with the state upon the second violation;
             4081          (C) an action for debarment of the contractor or subcontractor in accordance with
             4082      Section 63G-6-804 upon the third or subsequent violation; and
             4083          (D) monetary penalties which may not exceed 50% of the amount necessary to
             4084      purchase qualified health insurance coverage for an employee and a dependent of the employee
             4085      of the contractor or subcontractor who was not offered qualified health insurance coverage
             4086      during the duration of the contract; and
             4087          (iii) a website on which the department shall post the benchmark for the qualified


             4088      health insurance coverage identified in Subsection (1)(c)(i).
             4089          (7) (a) (i) In addition to the penalties imposed under Subsection (6), a contractor or
             4090      subcontractor who intentionally violates the provisions of this section shall be liable to the
             4091      employee for health care costs that would have been covered by qualified health insurance
             4092      coverage.
             4093          (ii) An employer has an affirmative defense to a cause of action under Subsection
             4094      (7)(a)(i) if:
             4095          (A) the employer relied in good faith on a written statement of actuarial equivalency
             4096      provided by:
             4097          (I) an actuary; or
             4098          (II) an underwriter who is responsible for developing the employer group's premium
             4099      rates; or
             4100          (B) the department determines that compliance with this section is not required under
             4101      the provisions of Subsection (3) or (4).
             4102          (b) An employee has a private right of action only against the employee's employer to
             4103      enforce the provisions of this Subsection (7).
             4104          (8) Any penalties imposed and collected under this section shall be deposited into the
             4105      Medicaid Restricted Account created in Section 26-18-402 .
             4106          (9) The failure of a contractor or subcontractor to provide qualified health insurance
             4107      coverage as required by this section:
             4108          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             4109      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             4110      Legal and Contractual Remedies; and
             4111          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             4112      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             4113      or construction.
             4114          Section 48. Section 76-6-521 is amended to read:
             4115           76-6-521. Fraudulent insurance act.
             4116          (1) A person commits a fraudulent insurance act if that person with intent to defraud:
             4117          (a) presents or causes to be presented any oral or written statement or representation
             4118      knowing that the statement or representation contains false or fraudulent information


             4119      concerning any fact material to an application for the issuance or renewal of an insurance
             4120      policy, certificate, or contract;
             4121          (b) presents, or causes to be presented, any oral or written statement or representation:
             4122          (i) (A) as part of or in support of a claim for payment or other benefit pursuant to an
             4123      insurance policy, certificate, or contract; or
             4124          (B) in connection with any civil claim asserted for recovery of damages for personal or
             4125      bodily injuries or property damage; and
             4126          (ii) knowing that the statement or representation contains false or fraudulent
             4127      information concerning any fact or thing material to the claim;
             4128          (c) knowingly accepts a benefit from proceeds derived from a fraudulent insurance act;
             4129          (d) intentionally, knowingly, or recklessly devises a scheme or artifice to obtain fees
             4130      for professional services, or anything of value by means of false or fraudulent pretenses,
             4131      representations, promises, or material omissions;
             4132          (e) knowingly employs, uses, or acts as a runner, as defined in Section 31A-31-102 , for
             4133      the purpose of committing a fraudulent insurance act;
             4134          (f) knowingly assists, abets, solicits, or conspires with another to commit a fraudulent
             4135      insurance act; or
             4136          (g) knowingly supplies false or fraudulent material information in any document or
             4137      statement required by the [Department of Insurance] Department of Commerce under Title
             4138      31A, Insurance Code, which may delegate this function to the Division of Insurance.
             4139          (2) (a) A violation of Subsection (1)(a) is a class B misdemeanor.
             4140          (b) A violation of Subsections (1)(b) through (1)(g) is punishable as in the manner
             4141      prescribed by Section 76-10-1801 for communication fraud for property of like value.
             4142          (3) A corporation or association is guilty of the offense of insurance fraud under the
             4143      same conditions as those set forth in Section 76-2-204 .
             4144          (4) The determination of the degree of any offense under Subsections (1)(b) through
             4145      (1)(g) shall be measured by the total value of all property, money, or other things obtained or
             4146      sought to be obtained by the fraudulent insurance act or acts described in Subsections (1)(b)
             4147      through (1)(g).
             4148          Section 49. Section 76-10-915 is amended to read:
             4149           76-10-915. Exempt activities.


             4150          (1) This act may not be construed to prohibit:
             4151          (a) the activities of any public utility to the extent that those activities are subject to
             4152      regulation by the public service commission, the state or federal department of transportation,
             4153      the federal energy regulatory commission, the federal communications commission, the
             4154      interstate commerce commission, or successor agencies;
             4155          (b) the activities of any insurer, insurance producer, independent insurance adjuster, or
             4156      rating organization including, but not limited to, making or participating in joint underwriting
             4157      or reinsurance arrangements, to the extent that those activities are subject to regulation by the
             4158      [commissioner of insurance] Department of Commerce under Title 31A, Insurance Code,
             4159      which may delegate this function to the Division of Insurance;
             4160          (c) the activities of securities dealers, issuers, or agents, to the extent that those
             4161      activities are subject to regulation under the laws of either this state or the United States;
             4162          (d) the activities of any state or national banking institution, to the extent that the
             4163      activities are regulated or supervised by state government officers or agencies under the
             4164      banking laws of this state or by federal government officers or agencies under the banking laws
             4165      of the United States;
             4166          (e) the activities of any state or federal savings and loan association to the extent that
             4167      those activities are regulated or supervised by state government officers or agencies under the
             4168      banking laws of this state or federal government officers or agencies under the banking laws of
             4169      the United States;
             4170          (f) the activities of a political subdivision to the extent authorized or directed by state
             4171      law, consistent with the state action doctrine of federal antitrust law; or
             4172          (g) the activities of an emergency medical service provider licensed under Title 26,
             4173      Chapter 8a, Utah Emergency Medical Services System Act, to the extent that those activities
             4174      are regulated by state government officers or agencies under that act.
             4175          (2) (a) The labor of a human being is not a commodity or article of commerce.
             4176          (b) Nothing contained in the antitrust laws shall be construed to forbid the existence
             4177      and operation of labor, agricultural, or horticultural organizations, instituted for the purpose of
             4178      mutual help and not having capital stock or conducted for profit, or to forbid or restrain
             4179      individual members of these organizations from lawfully carrying out their legitimate objects;
             4180      nor may these organizations or membership in them be held to be illegal combinations or


             4181      conspiracies in restraint of trade under the antitrust laws.
             4182          (3) (a) As used in this section, an entity is also a municipality if the entity was formed
             4183      under Title 11, Chapter 13, Interlocal Cooperation Act, prior to January 1, 1981, and the entity
             4184      is:
             4185          (i) a project entity as defined in Section 11-13-103 ;
             4186          (ii) an electric interlocal entity as defined in Section 11-13-103 ; or
             4187          (iii) an energy services interlocal entity as defined in Section 11-13-103 .
             4188          (b) The activities of the entities under Subsection (3)(a) are authorized or directed by
             4189      state law.
             4190          Section 50. Section 77-20-5 is amended to read:
             4191           77-20-5. Qualifications of sureties -- Justification -- Requirements of
             4192      undertaking.
             4193          (1) The sureties on written undertakings shall be real or personal property holders
             4194      within the state. The qualifications and bonding limits of bail bond sureties who are engaged
             4195      in the for-profit, commercial business of posting property bonds shall be established by the Bail
             4196      Bond Surety Oversight Board and rules adopted by the [insurance commissioner] Department
             4197      of Commerce under Title 31A, Insurance Code, which may delegate this function to the
             4198      Division of Insurance. All other sureties shall collectively have a net worth of at least twice the
             4199      amount of the undertaking, exclusive of property exempt from execution.
             4200          (2) Each surety shall justify by affidavit upon the undertaking and each may be further
             4201      examined upon oath by the magistrate or by the prosecuting attorney in the presence of a
             4202      magistrate, in respect to [his] the surety's property and net worth.
             4203          (3) The undertaking shall, in addition to other requirements, provide that each surety
             4204      submits [himself] the surety to the jurisdiction of the court and irrevocably appoints the clerk of
             4205      the court as [his] the surety's agent upon whom any papers affecting [his] the surety's liability
             4206      on the undertaking may be served, and that [his] the surety's liability may be enforced on
             4207      motion and upon such notice as the court may require without the necessity of an independent
             4208      action.
             4209          Section 51. Section 78B-3-403 is amended to read:
             4210           78B-3-403. Definitions.
             4211          As used in this part:


             4212          (1) "Audiologist" means a person licensed to practice audiology under Title 58,
             4213      Chapter 41, Speech-language Pathology and Audiology Licensing Act.
             4214          (2) "Certified social worker" means a person licensed to practice as a certified social
             4215      worker under Section 58-60-205 .
             4216          (3) "Chiropractic physician" means a person licensed to practice chiropractic under
             4217      Title 58, Chapter 73, Chiropractic Physician Practice Act.
             4218          (4) "Clinical social worker" means a person licensed to practice as a clinical social
             4219      worker under Section 58-60-205 .
             4220          (5) "Commissioner" means the [commissioner of insurance as provided in Section
             4221      31A-2-102] Department of Commerce under Title 31A, Insurance Code, which may delegate
             4222      this function to the Division of Insurance.
             4223          (6) "Dental hygienist" means a person licensed to engage in the practice of dental
             4224      hygiene as defined in Section 58-69-102 .
             4225          (7) "Dentist" means a person licensed to engage in the practice of dentistry as defined
             4226      in Section 58-69-102 .
             4227          (8) "Division" means the Division of Occupational and Professional Licensing created
             4228      in Section 58-1-103 .
             4229          (9) "Future damages" includes a judgment creditor's damages for future medical
             4230      treatment, care or custody, loss of future earnings, loss of bodily function, or future pain and
             4231      suffering.
             4232          (10) "Health care" means any act or treatment performed or furnished, or which should
             4233      have been performed or furnished, by any health care provider for, to, or on behalf of a patient
             4234      during the patient's medical care, treatment, or confinement.
             4235          (11) "Health care facility" means general acute hospitals, specialty hospitals, home
             4236      health agencies, hospices, nursing care facilities, assisted living facilities, birthing centers,
             4237      ambulatory surgical facilities, small health care facilities, health care facilities owned or
             4238      operated by health maintenance organizations, and end stage renal disease facilities.
             4239          (12) "Health care provider" includes any person, partnership, association, corporation,
             4240      or other facility or institution who causes to be rendered or who renders health care or
             4241      professional services as a hospital, health care facility, physician, registered nurse, licensed
             4242      practical nurse, nurse-midwife, licensed Direct-entry midwife, dentist, dental hygienist,


             4243      optometrist, clinical laboratory technologist, pharmacist, physical therapist, physical therapist
             4244      assistant, podiatric physician, psychologist, chiropractic physician, naturopathic physician,
             4245      osteopathic physician, osteopathic physician and surgeon, audiologist, speech-language
             4246      pathologist, clinical social worker, certified social worker, social service worker, marriage and
             4247      family counselor, practitioner of obstetrics, or others rendering similar care and services
             4248      relating to or arising out of the health needs of persons or groups of persons and officers,
             4249      employees, or agents of any of the above acting in the course and scope of their employment.
             4250          (13) "Hospital" means a public or private institution licensed under Title 26, Chapter
             4251      21, Health Care Facility Licensing and Inspection Act.
             4252          (14) "Licensed Direct-entry midwife" means a person licensed under the Direct-entry
             4253      Midwife Act to engage in the practice of direct-entry midwifery as defined in Section
             4254      58-77-102 .
             4255          (15) "Licensed practical nurse" means a person licensed to practice as a licensed
             4256      practical nurse as provided in Section 58-31b-301 .
             4257          (16) "Malpractice action against a health care provider" means any action against a
             4258      health care provider, whether in contract, tort, breach of warranty, wrongful death, or
             4259      otherwise, based upon alleged personal injuries relating to or arising out of health care rendered
             4260      or which should have been rendered by the health care provider.
             4261          (17) "Marriage and family therapist" means a person licensed to practice as a marriage
             4262      therapist or family therapist under Sections 58-60-305 and 58-60-405 .
             4263          (18) "Naturopathic physician" means a person licensed to engage in the practice of
             4264      naturopathic medicine as defined in Section 58-71-102 .
             4265          (19) "Nurse-midwife" means a person licensed to engage in practice as a nurse midwife
             4266      under Section 58-44a-301 .
             4267          (20) "Optometrist" means a person licensed to practice optometry under Title 58,
             4268      Chapter 16a, Utah Optometry Practice Act.
             4269          (21) "Osteopathic physician" means a person licensed to practice osteopathy under
             4270      Title 58, Chapter 68, Utah Osteopathic Medical Practice Act.
             4271          (22) "Patient" means a person who is under the care of a health care provider, under a
             4272      contract, express or implied.
             4273          (23) "Periodic payments" means the payment of money or delivery of other property to


             4274      a judgment creditor at intervals ordered by the court.
             4275          (24) "Pharmacist" means a person licensed to practice pharmacy as provided in Section
             4276      58-17b-301 .
             4277          (25) "Physical therapist" means a person licensed to practice physical therapy under
             4278      Title 58, Chapter 24b, Physical Therapy Practice Act.
             4279          (26) "Physical therapist assistant" means a person licensed to practice physical therapy,
             4280      within the scope of a physical therapist assistant license, under Title 58, Chapter 24b, Physical
             4281      Therapy Practice Act.
             4282          (27) "Physician" means a person licensed to practice medicine and surgery under Title
             4283      58, Chapter 67, Utah Medical Practice Act.
             4284          (28) "Podiatric physician" means a person licensed to practice podiatry under Title 58,
             4285      Chapter 5a, Podiatric Physician Licensing Act.
             4286          (29) "Practitioner of obstetrics" means a person licensed to practice as a physician in
             4287      this state under Title 58, Chapter 67, Utah Medical Practice Act, or under Title 58, Chapter 68,
             4288      Utah Osteopathic Medical Practice Act.
             4289          (30) "Psychologist" means a person licensed under Title 58, Chapter 61, Psychologist
             4290      Licensing Act, to engage in the practice of psychology as defined in Section 58-61-102 .
             4291          (31) "Registered nurse" means a person licensed to practice professional nursing as
             4292      provided in Section 58-31b-301 .
             4293          (32) "Relative" means a patient's spouse, parent, grandparent, stepfather, stepmother,
             4294      child, grandchild, brother, sister, half brother, half sister, or spouse's parents. The term
             4295      includes relationships that are created as a result of adoption.
             4296          (33) "Representative" means the spouse, parent, guardian, trustee, attorney-in-fact,
             4297      person designated to make decisions on behalf of a patient under a medical power of attorney,
             4298      or other legal agent of the patient.
             4299          (34) "Social service worker" means a person licensed to practice as a social service
             4300      worker under Section 58-60-205 .
             4301          (35) "Speech-language pathologist" means a person licensed to practice
             4302      speech-language pathology under Title 58, Chapter 41, Speech-language Pathology and
             4303      Audiology Licensing Act.
             4304          (36) "Tort" means any legal wrong, breach of duty, or negligent or unlawful act or


             4305      omission proximately causing injury or damage to another.
             4306          (37) "Unanticipated outcome" means the outcome of a medical treatment or procedure
             4307      that differs from an expected result.
             4308          Section 52. Section 78B-3-413 is amended to read:
             4309           78B-3-413. Professional liability insurance coverage for providers -- Joint
             4310      underwriting authority.
             4311          (1) The [commissioner] Department of Commerce under Title 31A, Insurance Code,
             4312      which may delegate this function to the Division of Insurance, may, after a public hearing, find
             4313      that professional liability insurance coverage for health care providers is not readily available in
             4314      the voluntary market in a specific part of this state, and that the public interest requires that
             4315      action be taken.
             4316          (2) The [commissioner] Department of Commerce may promulgate rules and
             4317      implement plans to provide insurance coverage through all insurers issuing professional
             4318      liability policies and individual and group accident and sickness policies providing medical,
             4319      surgical or hospital expense coverage on either a prepaid or an expense incurred basis,
             4320      including personal injury protection and medical expense coverage issued incidental to liability
             4321      insurance policies.
             4322          Section 53. Section 79-2-404 is amended to read:
             4323           79-2-404. Contracting powers of department -- Health insurance coverage.
             4324          (1) For purposes of this section:
             4325          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             4326      34A-2-104 who:
             4327          (i) works at least 30 hours per calendar week; and
             4328          (ii) meets employer eligibility waiting requirements for health care insurance which
             4329      may not exceed the first day of the calendar month following 90 days from the date of hire.
             4330          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             4331          (c) "Qualified health insurance coverage" means at the time the contract is entered into
             4332      or renewed:
             4333          (i) a health benefit plan and employer contribution level with a combined actuarial
             4334      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             4335      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and


             4336      a contribution level of 50% of the premium for the employee and the dependents of the
             4337      employee who reside or work in the state, in which:
             4338          (A) the employer pays at least 50% of the premium for the employee and the
             4339      dependents of the employee who reside or work in the state; and
             4340          (B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):
             4341          (I) rather that the benchmark plan's deductible, and the benchmark plan's out-of-pocket
             4342      maximum based on income levels:
             4343          (Aa) the deductible is $750 per individual and $2,250 per family; and
             4344          (Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
             4345          (II) dental coverage is not required; and
             4346          (III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do not
             4347      apply; or
             4348          (ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
             4349      deductible that is either:
             4350          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             4351      or
             4352          (II) a deductible that is higher than the lowest deductible permitted for a federally
             4353      qualified high deductible health plan, but includes an employer contribution to a health savings
             4354      account in a dollar amount at least equal to the dollar amount difference between the lowest
             4355      deductible permitted for a federally qualified high deductible plan and the deductible for the
             4356      employer offered federally qualified high deductible plan;
             4357          (B) an out-of-pocket maximum that does not exceed three times the amount of the
             4358      annual deductible; and
             4359          (C) under which the employer pays 75% of the premium for the employee and the
             4360      dependents of the employee who work or reside in the state.
             4361          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             4362          (2) (a) Except as provided in Subsection (3), this section applies a design or
             4363      construction contract entered into by, or delegated to, the department or a division, board, or
             4364      council of the department on or after July 1, 2009, and to a prime contractor or to a
             4365      subcontractor in accordance with Subsection (2)(b).
             4366          (b) (i) A prime contractor is subject to this section if the prime contract is in the


             4367      amount of $1,500,000 or greater.
             4368          (ii) A subcontractor is subject to this section if a subcontract is in the amount of
             4369      $750,000 or greater.
             4370          (3) This section does not apply to contracts entered into by the department or a
             4371      division, board, or council of the department if:
             4372          (a) the application of this section jeopardizes the receipt of federal funds;
             4373          (b) the contract or agreement is between:
             4374          (i) the department or a division, board, or council of the department; and
             4375          (ii) (A) another agency of the state;
             4376          (B) the federal government;
             4377          (C) another state;
             4378          (D) an interstate agency;
             4379          (E) a political subdivision of this state; or
             4380          (F) a political subdivision of another state; or
             4381          (c) the contract or agreement is:
             4382          (i) for the purpose of disbursing grants or loans authorized by statute;
             4383          (ii) a sole source contract; or
             4384          (iii) an emergency procurement.
             4385          (4) (a) This section does not apply to a change order as defined in Section [ 63G-6-102 ]
             4386      63G-6-103 , or a modification to a contract, when the contract does not meet the initial
             4387      threshold required by Subsection (2).
             4388          (b) A person who intentionally uses change orders or contract modifications to
             4389      circumvent the requirements of Subsection (2) is guilty of an infraction.
             4390          (5) (a) A contractor subject to Subsection (2)(b)(i) shall demonstrate to the department
             4391      that the contractor has and will maintain an offer of qualified health insurance coverage for the
             4392      contractor's employees and the employees' dependents during the duration of the contract.
             4393          (b) If a subcontractor of the contractor is subject to Subsection (2)(b)(ii), the contractor
             4394      shall demonstrate to the department that the subcontractor has and will maintain an offer of
             4395      qualified health insurance coverage for the subcontractor's employees and the employees'
             4396      dependents during the duration of the contract.
             4397          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during


             4398      the duration of the contract is subject to penalties in accordance with administrative rules
             4399      adopted by the department under Subsection (6).
             4400          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             4401      requirements of Subsection (5)(b).
             4402          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             4403      the duration of the contract is subject to penalties in accordance with administrative rules
             4404      adopted by the department under Subsection (6).
             4405          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             4406      requirements of Subsection (5)(a).
             4407          (6) The department shall adopt administrative rules:
             4408          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             4409          (b) in coordination with:
             4410          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             4411          (ii) a public transit district in accordance with Section 17B-2a-818.5 ;
             4412          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             4413          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             4414          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             4415          (vi) the Legislature's Administrative Rules Review Committee; and
             4416          (c) which establish:
             4417          (i) the requirements and procedures a contractor must follow to demonstrate
             4418      compliance with this section to the department which shall include:
             4419          (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a) or
             4420      (b) more than twice in any 12-month period; and
             4421          (B) that the actuarially equivalent determination required in Subsection (1) is met by
             4422      the contractor if the contractor provides the department or division with a written statement of
             4423      actuarial equivalency from either:
             4424          (I) the [Utah Insurance Department] Department of Commerce under Title 31A,
             4425      Insurance Code, which may delegate this function to the Division of Insurance;
             4426          (II) an actuary selected by the contractor or the contractor's insurer; or
             4427          (III) an underwriter who is responsible for developing the employer group's premium
             4428      rates;


             4429          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             4430      violates the provisions of this section, which may include:
             4431          (A) a three-month suspension of the contractor or subcontractor from entering into
             4432      future contracts with the state upon the first violation;
             4433          (B) a six-month suspension of the contractor or subcontractor from entering into future
             4434      contracts with the state upon the second violation;
             4435          (C) an action for debarment of the contractor or subcontractor in accordance with
             4436      Section 63G-6-804 upon the third or subsequent violation; and
             4437          (D) monetary penalties which may not exceed 50% of the amount necessary to
             4438      purchase qualified health insurance coverage for an employee and a dependent of an employee
             4439      of the contractor or subcontractor who was not offered qualified health insurance coverage
             4440      during the duration of the contract; and
             4441          (iii) a website on which the department shall post the benchmark for the qualified
             4442      health insurance coverage identified in Subsection (1)(c)(i).
             4443          (7) (a) (i) In addition to the penalties imposed under Subsection (6), a contractor or
             4444      subcontractor who intentionally violates the provisions of this section shall be liable to the
             4445      employee for health care costs that would have been covered by qualified health insurance
             4446      coverage.
             4447          (ii) An employer has an affirmative defense to a cause of action under Subsection
             4448      (7)(a)(i) if:
             4449          (A) the employer relied in good faith on a written statement of actuarial equivalency
             4450      provided by:
             4451          (I) an actuary; or
             4452          (II) an underwriter who is responsible for developing the employer group's premium
             4453      rates; or
             4454          (B) the department determines that compliance with this section is not required under
             4455      the provisions of Subsection (3) or (4).
             4456          (b) An employee has a private right of action only against the employee's employer to
             4457      enforce the provisions of this Subsection (7).
             4458          (8) Any penalties imposed and collected under this section shall be deposited into the
             4459      Medicaid Restricted Account created in Section 26-18-402 .


             4460          (9) The failure of a contractor or subcontractor to provide qualified health insurance
             4461      coverage as required by this section:
             4462          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             4463      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             4464      Legal and Contractual Remedies; and
             4465          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             4466      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             4467      or construction.
             4468          Section 54. Repealer.
             4469          This bill repeals:
             4470          Section 31A-2-102, Appointment, general powers, and duties of commissioner --
             4471      Vacancy -- Compensation of commissioner.
             4472          Section 31A-2-103, Commissioner's appointees.
             4473          Section 31A-2-105, Constitutional oath.
             4474          Section 55. Effective date.
             4475          Section 31A-2a-103 , enacted in this bill, takes effect on May 10, 2011, the remainder of
             4476      the bill takes effect on July 1, 2011.
             4477          Section 56. Revisor instructions.
             4478          It is the intent of the Legislature that, in preparing the Utah Code database for
             4479      publication, the Office of Legislative Research and General Counsel shall replace the reference
             4480      in Section 31A-2a-103 from "this bill" to the bill's designated chapter and section number in
             4481      the Laws of Utah.




Legislative Review Note
    as of 2-11-11 3:47 PM


Office of Legislative Research and General Counsel


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