S.B. 26

1

RISK MANAGEMENT FOR INDEPENDENT ENTITIES
2 2013 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Todd Weiler
5 House Sponsor: Don L. Ipson
6
7 LONG TITLE
8 Committee Note:
9 The Retirement and Independent Entities Interim Committee recommended this bill.
10 General Description:
11 This bill modifies the Independent Entities Code by amending requirements for a state
12 independent entity to participate in coverage under the Risk Management Fund.
13 Highlighted Provisions:
14 This bill:
15 . modifies the list of state independent entities included in the definition of
16 "independent entity" in the Independent Entities Code;
17 . provides that an independent entity is not eligible for coverage by the Division of
18 Risk Management unless the entity's authorizing statute specifically authorizes
19 coverage;
20 . modifies the authorizing statutes of certain independent entities to allow for
21 participation in risk-management coverage;
22 . provides that the state risk manager may require participating independent entities
23 to obtain additional insurance and comply with other loss-prevention measures for a
24 commercial activity; and
25 . makes technical changes.
26 Money Appropriated in this Bill:
27 None

28 Other Special Clauses:
29 This bill provides an effective date.
30 Utah Code Sections Affected:
31 AMENDS:
32 53C-1-201 (Effective 07/01/13), as last amended by Laws of Utah 2011, Chapter 353
33 53C-1-201 (Effective 05/01/13) (Sup 07/01/13), as last amended by Laws of Utah
34 2012, Chapter 347
35 63C-7-210 (Effective 05/01/13), as last amended by Laws of Utah 2012, Chapter 347
36 63E-1-102, as last amended by Laws of Utah 2012, Chapters 212 and 369
37 63E-2-107, as enacted by Laws of Utah 2001, Chapter 201
38 63H-4-108 (Effective 05/01/13), as last amended by Laws of Utah 2012, Chapter 347
39 ENACTS:
40 63E-1-304, Utah Code Annotated 1953
41
42 Be it enacted by the Legislature of the state of Utah:
43 Section 1. Section 53C-1-201 (Effective 07/01/13) is amended to read:
44 53C-1-201 (Effective 07/01/13). Creation of administration -- Purpose -- Director.
45 (1) (a) There is established within state government the School and Institutional Trust
46 Lands Administration.
47 (b) The administration shall manage all school and institutional trust lands and assets
48 within the state, except as otherwise provided in Title 53C, Chapter 3, Deposit and Allocation
49 of Revenue from Trust Lands, and Sections 51-7a-201 and 51-7a-202 .
50 (2) The administration is an independent state agency and not a division of any other
51 department.
52 (3) (a) It is subject to the usual legislative and executive department controls except as
53 provided in this Subsection (3).
54 (b) (i) The director may make rules as approved by the board that allow the
55 administration to classify a business proposal submitted to the administration as protected
56 under Section 63G-2-305 , for as long as is necessary to evaluate the proposal.
57 (ii) The administration shall return the proposal to the party who submitted the
58 proposal, and incur no further duties under Title 63G, Chapter 2, Government Records Access

59 and Management Act, if the administration determines not to proceed with the proposal.
60 (iii) The administration shall classify the proposal pursuant to law if it decides to
61 proceed with the proposal.
62 (iv) Section 63G-2-403 does not apply during the review period.
63 (c) The director shall make rules in compliance with Title 63G, Chapter 3, Utah
64 Administrative Rulemaking Act, except that the administration is not subject to Subsections
65 63G-3-301 (6) and (7) and Section 63G-3-601 , and the director, with the board's approval, may
66 establish a procedure for the expedited approval of rules, based on written findings by the
67 director showing:
68 (i) the changes in business opportunities affecting the assets of the trust;
69 (ii) the specific business opportunity arising out of those changes which may be lost
70 without the rule or changes to the rule;
71 (iii) the reasons the normal procedures under Section 63G-3-301 cannot be met without
72 causing the loss of the specific opportunity;
73 (iv) approval by at least five board members; and
74 (v) that the director has filed a copy of the rule and a rule analysis, stating the specific
75 reasons and justifications for its findings, with the Division of Administrative Rules and
76 notified interested parties as provided in Subsection 63G-3-301 (10).
77 (d) (i) The administration shall comply with Title 67, Chapter 19, Utah State Personnel
78 Management Act, except as provided in this Subsection (3)(d).
79 (ii) The board may approve, upon recommendation of the director, that exemption for
80 specific positions under Subsections 67-19-12 (2) and 67-19-15 (1) is required in order to enable
81 the administration to efficiently fulfill its responsibilities under the law. The director shall
82 consult with the executive director of the Department of Human Resource Management prior
83 to making such a recommendation.
84 (iii) The positions of director, deputy director, associate director, assistant director,
85 legal counsel appointed under Section 53C-1-305 , administrative assistant, and public affairs
86 officer are exempt under Subsections 67-19-12 (2) and 67-19-15 (1).
87 (iv) Salaries for exempted positions, except for the director, shall be set by the director,
88 after consultation with the executive director of the Department of Human Resource
89 Management, within ranges approved by the board. The board and director shall consider

90 salaries for similar positions in private enterprise and other public employment when setting
91 salary ranges.
92 (v) The board may create an annual incentive and bonus plan for the director and other
93 administration employees designated by the board, based upon the attainment of financial
94 performance goals and other measurable criteria defined and budgeted in advance by the board.
95 (e) The administration shall comply with Title 63G, Chapter 6a, Utah Procurement
96 Code, except where the board approves, upon recommendation of the director, exemption from
97 the Utah Procurement Code, and simultaneous adoption of rules under Title 63G, Chapter 3,
98 Utah Administrative Rulemaking Act, for procurement, which enable the administration to
99 efficiently fulfill its responsibilities under the law.
100 (f) (i) Except as provided in Subsection (3)(f)(ii), the administration is not subject to
101 the fee agency requirements of Section 63J-1-504 .
102 (ii) The following fees of the administration are subject to the requirements of Section
103 63J-1-504 : application, assignment, amendment, affidavit for lost documents, name change,
104 reinstatement, grazing nonuse, extension of time, partial conveyance, patent reissue, collateral
105 assignment, electronic payment, and processing.
106 (4) The administration is managed by a director of school and institutional trust lands
107 appointed by a majority vote of the board of trustees with the consent of the governor.
108 (5) (a) The board of trustees shall provide policies for the management of the
109 administration and for the management of trust lands and assets.
110 (b) The board shall provide policies for the ownership and control of Native American
111 remains that are discovered or excavated on school and institutional trust lands in consultation
112 with the Division of Indian Affairs and giving due consideration to Title 9, Chapter 9, Part 4,
113 Native American Grave Protection and Repatriation Act. The director may make rules in
114 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to implement
115 policies provided by the board regarding Native American remains.
116 (6) In connection with joint ventures and other transactions involving trust lands and
117 minerals approved under Sections 53C-1-303 and 53C-2-401 , the administration, with board
118 approval, may become a member of a limited liability company under Title 48, Chapter 3, Utah
119 Revised Uniform Limited Liability Company Act, and is considered a person under Section
120 48-3-102 .

121 (7) Subject to the requirements of Subsection 63E-1-304 (2), the administration may
122 participate in coverage under the Risk Management Fund created by Section 63A-4-201 .
123 Section 2. Section 53C-1-201 (Effective 05/01/13) (Sup 07/01/13) is amended to read:
124 53C-1-201 (Effective 05/01/13) (Sup 07/01/13). Creation of administration --
125 Purpose -- Director.
126 (1) (a) There is established within state government the School and Institutional Trust
127 Lands Administration.
128 (b) The administration shall manage all school and institutional trust lands and assets
129 within the state, except as otherwise provided in Title 53C, Chapter 3, Deposit and Allocation
130 of Revenue from Trust Lands, and Sections 51-7a-201 and 51-7a-202 .
131 (2) The administration is an independent state agency and not a division of any other
132 department.
133 (3) (a) It is subject to the usual legislative and executive department controls except as
134 provided in this Subsection (3).
135 (b) (i) The director may make rules as approved by the board that allow the
136 administration to classify a business proposal submitted to the administration as protected
137 under Section 63G-2-305 , for as long as is necessary to evaluate the proposal.
138 (ii) The administration shall return the proposal to the party who submitted the
139 proposal, and incur no further duties under Title 63G, Chapter 2, Government Records Access
140 and Management Act, if the administration determines not to proceed with the proposal.
141 (iii) The administration shall classify the proposal pursuant to law if it decides to
142 proceed with the proposal.
143 (iv) Section 63G-2-403 does not apply during the review period.
144 (c) The director shall make rules in compliance with Title 63G, Chapter 3, Utah
145 Administrative Rulemaking Act, except that the administration is not subject to Subsections
146 63G-3-301 (6) and (7) and Section 63G-3-601 , and the director, with the board's approval, may
147 establish a procedure for the expedited approval of rules, based on written findings by the
148 director showing:
149 (i) the changes in business opportunities affecting the assets of the trust;
150 (ii) the specific business opportunity arising out of those changes which may be lost
151 without the rule or changes to the rule;

152 (iii) the reasons the normal procedures under Section 63G-3-301 cannot be met without
153 causing the loss of the specific opportunity;
154 (iv) approval by at least five board members; and
155 (v) that the director has filed a copy of the rule and a rule analysis, stating the specific
156 reasons and justifications for its findings, with the Division of Administrative Rules and
157 notified interested parties as provided in Subsection 63G-3-301 (10).
158 (d) (i) The administration shall comply with Title 67, Chapter 19, Utah State Personnel
159 Management Act, except as provided in this Subsection (3)(d).
160 (ii) The board may approve, upon recommendation of the director, that exemption for
161 specific positions under Subsections 67-19-12 (2) and 67-19-15 (1) is required in order to enable
162 the administration to efficiently fulfill its responsibilities under the law. The director shall
163 consult with the executive director of the Department of Human Resource Management prior
164 to making such a recommendation.
165 (iii) The positions of director, deputy director, associate director, assistant director,
166 legal counsel appointed under Section 53C-1-305 , administrative assistant, and public affairs
167 officer are exempt under Subsections 67-19-12 (2) and 67-19-15 (1).
168 (iv) Salaries for exempted positions, except for the director, shall be set by the director,
169 after consultation with the executive director of the Department of Human Resource
170 Management, within ranges approved by the board. The board and director shall consider
171 salaries for similar positions in private enterprise and other public employment when setting
172 salary ranges.
173 (v) The board may create an annual incentive and bonus plan for the director and other
174 administration employees designated by the board, based upon the attainment of financial
175 performance goals and other measurable criteria defined and budgeted in advance by the board.
176 (e) The administration shall comply with Title 63G, Chapter 6a, Utah Procurement
177 Code, except where the board approves, upon recommendation of the director, exemption from
178 the Utah Procurement Code, and simultaneous adoption of rules under Title 63G, Chapter 3,
179 Utah Administrative Rulemaking Act, for procurement, which enable the administration to
180 efficiently fulfill its responsibilities under the law.
181 (f) (i) Except as provided in Subsection (3)(f)(ii), the administration is not subject to
182 the fee agency requirements of Section 63J-1-504 .

183 (ii) The following fees of the administration are subject to the requirements of Section
184 63J-1-504 : application, assignment, amendment, affidavit for lost documents, name change,
185 reinstatement, grazing nonuse, extension of time, partial conveyance, patent reissue, collateral
186 assignment, electronic payment, and processing.
187 (4) The administration is managed by a director of school and institutional trust lands
188 appointed by a majority vote of the board of trustees with the consent of the governor.
189 (5) (a) The board of trustees shall provide policies for the management of the
190 administration and for the management of trust lands and assets.
191 (b) The board shall provide policies for the ownership and control of Native American
192 remains that are discovered or excavated on school and institutional trust lands in consultation
193 with the Division of Indian Affairs and giving due consideration to Title 9, Chapter 9, Part 4,
194 Native American Grave Protection and Repatriation Act. The director may make rules in
195 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to implement
196 policies provided by the board regarding Native American remains.
197 (6) In connection with joint ventures and other transactions involving trust lands and
198 minerals approved under Sections 53C-1-303 and 53C-2-401 , the administration, with board
199 approval, may become a member of a limited liability company under Title 48, Chapter 2c,
200 Utah Revised Limited Liability Company Act, and is considered a person under Section
201 48-2c-102 .
202 (7) Subject to the requirements of Subsection 63E-1-304 (2), the administration may
203 participate in coverage under the Risk Management Fund created by Section 63A-4-201 .
204 Section 3. Section 63C-7-210 (Effective 05/01/13) is amended to read:
205 63C-7-210 (Effective 05/01/13). Relation to certain acts.
206 (1) The Utah Communications Agency Network is exempt from:
207 (a) Title 63J, Chapter 1, Budgetary Procedures Act;
208 (b) Title 63A, Utah Administrative Services Code, except as provided in Section
209 63A-4-205.5 ;
210 (c) Title 63G, Chapter 6a, Utah Procurement Code;
211 (d) Title 63G, Chapter 4, Administrative Procedures Act; and
212 (e) Title 67, Chapter 19, Utah State Personnel Management Act.
213 (2) The board shall adopt budgetary procedures, accounting, procurement, and

214 personnel policies substantially similar to those from which they have been exempted in
215 Subsection (1).
216 (3) Subject to the requirements of Subsection 63E-1-304 (2), the administration may
217 participate in coverage under the Risk Management Fund created by Section 63A-4-201 .
218 Section 4. Section 63E-1-102 is amended to read:
219 63E-1-102. Definitions.
220 As used in this title:
221 (1) "Authorizing statute" means the statute creating an entity as an independent entity.
222 (2) "Committee" means the Retirement and Independent Entities Committee created
223 [in] by Section 63E-1-201 .
224 (3) "Independent corporation" means a corporation incorporated in accordance with
225 Chapter 2, Independent Corporations Act.
226 (4) (a) "Independent entity" means an entity having a public purpose relating to the
227 state or its citizens that is individually created by the state or is given by the state the right to
228 exist and conduct its affairs as an:
229 (i) independent state agency; or
230 (ii) independent corporation.
231 (b) "Independent entity" includes the:
232 (i) Utah Dairy Commission created [in Title 4, Chapter 22, Dairy Promotion Act] by
233 Section 4-22-2 ;
234 (ii) Heber Valley Historic Railroad Authority created [in Title 63H, Chapter 4, Heber
235 Valley Historic Railroad Authority] by Section 63H-4-102 ;
236 (iii) Utah State Railroad Museum Authority created [in Title 63H, Chapter 5, Utah
237 State Railroad Museum Authority] by Section 63H-5-102 ;
238 (iv) Utah Science Center Authority created [in Title 63H, Chapter 3, Utah Science
239 Center Authority] by Section 63H-3-103 ;
240 (v) Utah Housing Corporation created [in Title 35A, Chapter 8, Part 7, Utah Housing
241 Corporation Act] by Section 35A-8-704 ;
242 (vi) Utah State Fair Corporation created [in Title 63H, Chapter 6, Utah State Fair
243 Corporation Act] by Section 63H-6-103 ;
244 (vii) Workers' Compensation Fund created [in Title 31A, Chapter 33, Workers'

245 Compensation Fund] by Section 31A-33-102 ;
246 (viii) Utah State Retirement Office created [in Title 49, Chapter 11, Utah State
247 Retirement Systems Administration] by Section 49-11-201 ;
248 (ix) School and Institutional Trust Lands Administration created [in Title 53C, Chapter
249 1, Part 2, School and Institutional Trust Lands Administration] by Section 53C-1-201 ;
250 (x) Utah Communications Agency Network created [in Title 63C, Chapter 7, Utah
251 Communications Agency Network Act] by Section 63C-7-201 ;
252 (xi) Utah [Generated Renewable Energy Electricity Network Authority] Energy
253 Infrastructure Authority created [in Title 63H, Chapter 2, Utah Generated Renewable Energy
254 Electricity Network Authority Act] by Section 63H-2-201 ; [and]
255 (xii) Utah Capital Investment Corporation created [in Title 63M, Chapter 1, Part 12,
256 Utah Venture Capital Enhancement Act.] by Section 63M-1-1207 ; and
257 (xiii) Military Installation Development Authority created by Section 63H-1-201 .
258 (c) Notwithstanding this Subsection (4), "independent entity" does not include:
259 (i) the Public Service Commission of Utah created [in] by Section 54-1-1 ;
260 (ii) an institution within the state system of higher education;
261 (iii) a city, county, or town;
262 (iv) a local school district;
263 (v) a local district under Title 17B, Limited Purpose Local Government Entities - Local
264 Districts; or
265 (vi) a special service district under Title 17D, Chapter 1, Special Service District Act.
266 (5) "Independent state agency" means an entity that is created by the state, but is
267 independent of the governor's direct supervisory control.
268 (6) "Money held in trust" means money maintained for the benefit of:
269 (a) one or more private individuals, including public employees;
270 (b) one or more public or private entities; or
271 (c) the owners of a quasi-public corporation.
272 (7) "Public corporation" means an artificial person, public in ownership, individually
273 created by the state as a body politic and corporate for the administration of a public purpose
274 relating to the state or its citizens.
275 (8) "Quasi-public corporation" means an artificial person, private in ownership,

276 individually created as a corporation by the state which has accepted from the state the grant of
277 a franchise or contract involving the performance of a public purpose relating to the state or its
278 citizens.
279 Section 5. Section 63E-1-304 is enacted to read:
280 63E-1-304. Limitations on risk management coverage.
281 (1) Except as specifically modified in its authorizing statute, an independent entity is
282 not eligible to receive coverage under the Risk Management Fund created by Section
283 63A-4-201.
284 (2) If an independent entity that receives coverage under the Risk Management Fund is
285 involved in a commercial activity, the state risk manager may require that the entity:
286 (a) procure commercial insurance coverage or provide proof of vendor's insurance
287 coverage for the commercial activity; and
288 (b) comply with loss prevention measures specified by the state risk manager.
289 Section 6. Section 63E-2-107 is amended to read:
290 63E-2-107. Prohibited participation.
291 Except as specifically modified in its authorizing statute, each independent corporation
292 may not participate in the:
293 (1) issuance of bonds that are the obligation of the state; or
294 (2) services provided to state agencies, including:
295 (a) fuel dispensing;
296 (b) motor pool services;
297 (c) surplus property services;
298 [(d) risk management coverage;]
299 [(e)] (d) information technology services; or
300 [(f)] (e) archive services.
301 Section 7. Section 63H-4-108 (Effective 05/01/13) is amended to read:
302 63H-4-108 (Effective 05/01/13). Relation to certain acts.
303 (1) The authority is exempt from:
304 (a) Title 51, Chapter 5, Funds Consolidation Act;
305 (b) Title 63A, Utah Administrative Services Code;
306 (c) Title 63G, Chapter 6a, Utah Procurement Code;

307 (d) Title 63J, Chapter 1, Budgetary Procedures Act; and
308 (e) Title 67, Chapter 19, Utah State Personnel Management Act.
309 (2) The authority is subject to audit by the state auditor pursuant to Title 67, Chapter 3,
310 Auditor, and by the legislative auditor general pursuant to Section 36-12-15 .
311 (3) Subject to the requirements of Subsection 63E-1-304 (2), the authority may
312 participate in coverage under the Risk Management Fund created by Section 63A-4-201 .
313 Section 8. Effective date.
314 (1) Except as provided in Subsection (2), this bill takes effect on May 14, 2013.
315 (2) Section 53C-1-201 (Effective 07/01/13) takes effect on July 1, 2013.




Legislative Review Note
as of 11-15-12 1:11 PM

Office of Legislative Research and General Counsel

[Bill Documents]