1     
INTERLOCAL COOPERATION ACT AMENDMENTS

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Merrill F. Nelson

5     
Senate Sponsor: Ralph Okerlund

6     

7     LONG TITLE
8     General Description:
9          This bill modifies and enacts provisions of the Interlocal Cooperation Act.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     authorizes a taxed interlocal entity to establish one or more segments that are treated
14     as separate interlocal entities and may have separate rights, powers, privileges, or
15     duties;
16          ▸     provides for a limitation on the liabilities of a segment;
17          ▸     addresses the members of a segment, the liabilities of directors and officers of a
18     taxed interlocal entity or of a segment, and the termination of a segment; and
19          ▸     makes technical and conforming changes.
20     Money Appropriated in this Bill:
21          None
22     Other Special Clauses:
23          None
24     Utah Code Sections Affected:
25     AMENDS:
26          11-13-103, as last amended by Laws of Utah 2015, Chapter 265
27          11-13-202.5, as last amended by Laws of Utah 2015, Chapter 265
28          11-13-301, as last amended by Laws of Utah 2012, Chapter 345
29          11-13-304, as last amended by Laws of Utah 2012, Chapter 345
30          11-13-401, as enacted by Laws of Utah 2015, Chapter 265
31          11-13-502, as enacted by Laws of Utah 2015, Chapter 265
32          63A-3-401, as last amended by Laws of Utah 2015, Chapter 38
33     ENACTS:
34          11-13-601, Utah Code Annotated 1953
35          11-13-602, Utah Code Annotated 1953
36          11-13-604, Utah Code Annotated 1953
37          11-13-605, Utah Code Annotated 1953
38          11-13-606, Utah Code Annotated 1953
39          11-13-607, Utah Code Annotated 1953
40          11-13-608, Utah Code Annotated 1953
41     RENUMBERS AND AMENDS:
42          11-13-603, (Renumbered from 11-13-315, as last amended by Laws of Utah 2015,
43     Chapters 265 and 308)
44     

45     Be it enacted by the Legislature of the state of Utah:
46          Section 1. Section 11-13-103 is amended to read:
47          11-13-103. Definitions.
48          As used in this chapter:
49          (1) (a) "Additional project capacity" means electric generating capacity provided by a
50     generating unit that first produces electricity on or after May 6, 2002, and that is constructed or
51     installed at or adjacent to the site of a project that first produced electricity before May 6, 2002,
52     regardless of whether:
53          (i) the owners of the new generating unit are the same as or different from the owner of
54     the project; and
55          (ii) the purchasers of electricity from the new generating unit are the same as or
56     different from the purchasers of electricity from the project.
57          (b) "Additional project capacity" does not mean or include replacement project
58     capacity.
59          (2) "Board" means the Permanent Community Impact Fund Board created by Section
60     35A-8-304, and its successors.
61          (3) "Candidate" means one or more of:
62          (a) the state;
63          (b) a county, municipality, school district, local district, special service district, or other
64     political subdivision of the state; and
65          (c) a prosecution district.
66          (4) "Commercial project entity" means a project entity, defined in Subsection [(17)]
67     (18), that:
68          (a) has no taxing authority; and
69          (b) is not supported in whole or in part by and does not expend or disburse tax
70     revenues.
71          (5) "Direct impacts" means an increase in the need for public facilities or services that
72     is attributable to the project or facilities providing additional project capacity, except impacts
73     resulting from the construction or operation of a facility that is:
74          (a) owned by an owner other than the owner of the project or of the facilities providing
75     additional project capacity; and
76          (b) used to furnish fuel, construction, or operation materials for use in the project.
77          (6) "Electric interlocal entity" means an interlocal entity described in Subsection
78     11-13-203(3).
79          (7) "Energy services interlocal entity" means an interlocal entity that is described in
80     Subsection 11-13-203(4).
81          (8) (a) "Estimated electric requirements," when used with respect to a qualified energy
82     services interlocal entity, includes any of the following that meets the requirements of
83     Subsection (8)(b):
84          (i) generation capacity;
85          (ii) generation output; or
86          (iii) an electric energy production facility.
87          (b) An item listed in Subsection (8)(a) is included in "estimated electric requirements"
88     if it is needed by the qualified energy services interlocal entity to perform the qualified energy
89     services interlocal entity's contractual or legal obligations to any of its members.
90          (9) (a) "Facilities providing replacement project capacity" means facilities that have
91     been, are being, or are proposed to be constructed, reconstructed, converted, repowered,
92     acquired, leased, used, or installed to provide replacement project capacity.
93          (b) "Facilities providing replacement project capacity" includes facilities that have
94     been, are being, or are proposed to be constructed, reconstructed, converted, repowered,
95     acquired, leased, used, or installed:
96          (i) to support and facilitate the construction, reconstruction, conversion, repowering,
97     installation, financing, operation, management, or use of replacement project capacity; or
98          (ii) for the distribution of power generated from existing capacity or replacement
99     project capacity to facilities located on real property in which the project entity that owns the
100     project has an ownership, leasehold, right-of-way, or permitted interest.
101          [(9)] (10) "Governing authority" means a governing board or joint administrator.
102          [(10)] (11) (a) "Governing board" means the body established in reliance on the
103     authority provided under Subsection 11-13-206(1)(b) to govern an interlocal entity.
104          (b) "Governing board" includes a board of directors described in an agreement, as
105     amended, that creates a project entity.
106          [(b)] (c) "Governing board" does not include a board as defined in Subsection (2).
107          [(11)] (12) "Interlocal entity" means:
108          (a) a Utah interlocal entity, an electric interlocal entity, or an energy services interlocal
109     entity; or
110          (b) a separate legal or administrative entity created under Section 11-13-205.
111          [(12)] (13) "Joint administrator" means an administrator or joint board described in
112     Section 11-13-207 to administer a joint or cooperative undertaking.
113          [(13)] (14) "Joint or cooperative undertaking" means an undertaking described in
114     Section 11-13-207 that is not conducted by an interlocal entity.
115          [(14)] (15) "Member" means a public agency that, with another public agency, creates
116     an interlocal entity under Section 11-13-203.
117          [(15)] (16) "Out-of-state public agency" means a public agency as defined in
118     Subsection [(18)] (19)(c), (d), or (e).
119          [(16)] (17) (a) "Project":
120          (i) means an electric generation and transmission facility owned by a Utah interlocal
121     entity or an electric interlocal entity; and
122          (ii) includes fuel or fuel transportation facilities and water facilities owned by that Utah
123     interlocal entity or electric interlocal entity and required for the generation and transmission
124     facility.
125          (b) "Project" includes a project entity's ownership interest in:
126          (i) facilities that provide additional project capacity;
127          (ii) facilities [that provide] providing replacement project capacity; and
128          (iii) additional generating, transmission, fuel, fuel transportation, water, or other
129     facilities added to a project.
130          [(17)] (18) "Project entity" means a Utah interlocal entity or an electric interlocal entity
131     that owns a project as defined in this section.
132          [(18)] (19) "Public agency" means:
133          (a) a city, town, county, school district, local district, special service district, an
134     interlocal entity, or other political subdivision of the state;
135          (b) the state or any department, division, or agency of the state;
136          (c) any agency of the United States;
137          (d) any political subdivision or agency of another state or the District of Columbia
138     including any interlocal cooperation or joint powers agency formed under the authority of the
139     law of the other state or the District of Columbia; or
140          (e) any Indian tribe, band, nation, or other organized group or community which is
141     recognized as eligible for the special programs and services provided by the United States to
142     Indians because of their status as Indians.
143          [(19)] (20) "Qualified energy services interlocal entity" means an energy services
144     interlocal entity that at the time that the energy services interlocal entity acquires its interest in
145     facilities providing additional project capacity has at least five members that are Utah public
146     agencies.
147          [(20)] (21) "Replacement project capacity" means electric generating capacity or
148     transmission capacity that:
149          (a) replaces all or a portion of the existing electric generating or transmission capacity
150     of a project; and
151          (b) is provided by a facility that is [constructed, reconstructed, converted, repowered,
152     or installed in a location] on, adjacent to [or], in proximity to, or interconnected with the site of
153     a project, regardless of whether:
154          (i) the capacity replacing existing capacity is less than or exceeds the generating or
155     transmission capacity of the project [prior to] existing before installation of the capacity
156     replacing existing capacity[.];
157          (ii) the capacity replacing existing capacity is owned by the project entity that is the
158     owner of the project, a segment established by the project entity, or a person with whom the
159     project entity or a segment established by the project entity has contracted; or
160          (iii) the facility that provides the capacity replacing existing capacity is constructed,
161     reconstructed, converted, repowered, acquired, leased, used, or installed before or after any
162     actual or anticipated reduction or modification to existing capacity of the project.
163          [(21)] (22) "Utah interlocal entity":
164          (a) means an interlocal entity described in Subsection 11-13-203(2); and
165          (b) includes a separate legal or administrative entity created under Laws of Utah 1977,
166     Chapter 47, Section 3, as amended.
167          [(22)] (23) "Utah public agency" means a public agency under Subsection [(18)]
168     (19)(a) or (b).
169          Section 2. Section 11-13-202.5 is amended to read:
170          11-13-202.5. Approval of certain agreements -- Review by attorney.
171          (1) Each agreement under Section 11-13-202 and each agreement under Section
172     11-13-212 shall be approved by:
173          (a) except as provided in Subsections (1)(b) and (c), the commission, board, council, or
174     other body or officer vested with the executive power of the public agency;
175          (b) the legislative body of the public agency if the agreement:
176          (i) requires the public agency to adjust its budget for a current or future fiscal year;
177          (ii) includes an out-of-state public agency as a party;
178          (iii) provides for the public agency to acquire or construct:
179          (A) a facility; or
180          (B) an improvement to real property;
181          (iv) provides for the public agency to acquire or transfer title to real property;
182          (v) provides for the public agency to issue bonds;
183          (vi) creates an interlocal entity; or
184          (vii) provides for the public agency to share taxes or other revenues; or
185          (c) if the public agency is a public agency under Subsection 11-13-103[(18)](19)(b),
186     the director or other head of the applicable state department, division, or agency.
187          (2) If an agreement is required under Subsection (1) to be approved by the public
188     agency's legislative body, the resolution or ordinance approving the agreement shall:
189          (a) specify the effective date of the agreement; and
190          (b) if the agreement creates an interlocal entity:
191          (i) declare that it is the legislative body's intent to create an interlocal entity;
192          (ii) describe the public purposes for which the interlocal entity is created; and
193          (iii) describe the powers, duties, and functions of the interlocal entity.
194          (3) The officer or body required under Subsection (1) to approve an agreement shall,
195     before the agreement may take effect, submit the agreement to the attorney authorized to
196     represent the public agency for review as to proper form and compliance with applicable law.
197          Section 3. Section 11-13-301 is amended to read:
198          11-13-301. Project entity and generation output requirements.
199          (1) Each project entity:
200          (a) shall:
201          (i) except for construction of facilities [to provide] providing replacement project
202     capacity, before undertaking the construction of a project and before undertaking the
203     construction of facilities to provide additional project capacity, offer to sell or make available
204     at least 50% of the generation output of or electric energy produced by the project or additional
205     project capacity, respectively;
206          (ii) establish rules and procedures for an offer under Subsection (1)(a)(i) that provide at
207     least 60 days for a prospective power purchaser to accept the offer before the offer is
208     considered rejected; and
209          (iii) make each offer under Subsection (1)(a)(i):
210          (A) under a long-term arrangement that may be an undivided ownership interest, a
211     participation interest, a power sales agreement, or otherwise; and
212          (B) to one or more power purchasers in the state that supply electric energy at
213     wholesale or retail; and
214          (b) may undertake construction of facilities [to provide] providing replacement project
215     capacity for its project.
216          (2) (a) The generation output or electric energy production available to power
217     purchasers in the state from a project shall be at least 5% of the total generation output or
218     electric energy production of the project.
219          (b) (i) Subject to Subsection (2)(b)(ii)(B), at least a majority of the generation capacity,
220     generation output, or electric energy production facilities providing additional project capacity
221     shall be:
222          (A) made available as needed to meet the estimated electric requirements of entities or
223     consumers within the state; and
224          (B) owned, purchased, or consumed by entities or consumers within the state.
225          (ii) (A) As used in this Subsection (2)(b)(ii), "default provision" means a provision
226     authorizing a nondefaulting party to succeed to or require the disposition of the rights and
227     interests of a defaulting party.
228          (B) The requirements of Subsection (2)(b)(i) do not apply to the extent that those
229     requirements are not met due to the operation of a default provision in an agreement providing
230     for ownership or other interests in facilities providing additional project capacity.
231          Section 4. Section 11-13-304 is amended to read:
232          11-13-304. Certificate of public convenience and necessity required -- Exceptions.
233          (1) Before proceeding with the construction of any electrical generating plant or
234     transmission line, each interlocal entity and each out-of-state public agency shall first obtain
235     from the public service commission a certificate, after hearing, that public convenience and
236     necessity requires such construction and in addition that such construction will in no way
237     impair the public convenience and necessity of electrical consumers of the state of Utah at the
238     present time or in the future.
239          (2) The requirement to obtain a certificate of public convenience and necessity applies
240     to each project initiated after the section's effective date but does not apply to:
241          (a) a project for which a feasibility study was initiated prior to the effective date;
242          (b) any facilities providing additional project capacity;
243          (c) any facilities providing replacement project capacity; or
244          (d) transmission lines required for the delivery of electricity from a project described in
245     Subsection (2)(a), or facilities providing additional project capacity, or facilities providing
246     replacement project capacity within the corridor of a transmission line, with reasonable
247     deviation, of a project producing as of April 21, 1987.
248          Section 5. Section 11-13-401 is amended to read:
249          11-13-401. Application.
250          (1) Except as provided in Subsection (2), and notwithstanding any other provision of
251     law, this part applies to a governing authority created under this chapter.
252          (2) This part does not apply to:
253          (a) a taxed interlocal entity, as defined in Section [11-13-315] 11-13-602; or
254          (b) a project entity.
255          Section 6. Section 11-13-502 is amended to read:
256          11-13-502. Application -- Conflicts with federal law -- Other applicable law.
257          (1) This part does not apply to a taxed interlocal entity as defined in Section
258     [11-13-315] 11-13-602.
259          (2) Except as provided in Subsection (1), and notwithstanding any other provision of
260     law, this part governs an interlocal entity's fiscal procedures but only to the extent that the
261     provision does not conflict with or cause an interlocal entity to be noncompliant with federal
262     law.
263          (3) An interlocal entity is subject to Title 51, Chapter 7, State Money Management Act.
264          Section 7. Section 11-13-601 is enacted to read:
265     
Part 6. Taxed Interlocal Entities

266          11-13-601. Title.
267          This part is known as "Taxed Interlocal Entities."
268          Section 8. Section 11-13-602 is enacted to read:
269          11-13-602. Definitions.
270          As used in this part:
271          (1) "Asset" means funds, money, an account, real or personal property, or personnel.
272          (2) (a) "Associated entity" means a taxed interlocal entity that adopts a segment's
273     organizing resolution.
274          (b) "Associated entity" does not include any other segment.
275          (3) "Fiduciary duty" means a duty expressly designated as a fiduciary duty of:
276          (a) a director or an officer of a taxed interlocal entity in:
277          (i) the organization agreement of the taxed interlocal entity; or
278          (ii) an agreement executed by the director or the officer and the taxed interlocal entity;
279     or
280          (b) a director or an officer of a segment in:
281          (i) the organizing resolution of the segment; or
282          (ii) an agreement executed by the director or the officer and the segment.
283          (4) "Governing body" means the body established in an organizing resolution to govern
284     a segment.
285          (5) "Governmental law" means:
286          (a) Title 51, Chapter 2a, Accounting Reports from Political Subdivisions, Interlocal
287     Organizations, and Other Local Entities Act;
288          (b) Title 63A, Chapter 3, Division of Finance;
289          (c) Title 63G, Chapter 6a, Utah Procurement Code;
290          (d) a law imposing an obligation on a taxed interlocal entity similar to an obligation
291     imposed by a law described in Subsection (5)(a), (b), or (c);
292          (e) an amendment to or replacement or renumbering of a law described in Subsection
293     (5)(a), (b), (c), or (d); or
294          (f) a law superseding a law described in Subsection (5)(a), (b), (c), or (d).
295          (6) "Indexed office" means the address identified under Subsection 63G-7-401(5)(a)(i)
296     by a segment's associated entity in the associated entity's statement described in Subsection
297     63G-7-401(5).
298          (7) "Organization agreement" means an agreement, as amended, that creates a taxed
299     interlocal entity.
300          (8) "Organizing resolution" means a resolution described in Subsection 11-13-604(1)
301     that creates a segment.
302          (9) "Principal county" means the county in which the indexed office of a segment's
303     associated entity is located.
304          (10) "Project" means:
305          (a) the same as that term is defined in Section 11-13-103; or
306          (b) facilities, improvements, or contracts undertaken by a taxed interlocal entity in
307     accordance with Subsection 11-13-204(2).
308          (11) "Public asset" means:
309          (a) an asset used by a public entity;
310          (b) tax revenue;
311          (c) state funds; or
312          (d) public funds.
313          (12) "Segment" means a segment created in accordance with Section 11-13-604.
314          (13) "Taxed interlocal entity" means:
315          (a) a project entity that:
316          (i) is not exempt from a tax or fee in lieu of taxes imposed in accordance with Part 3,
317     Project Entity Provisions;
318          (ii) does not receive a payment of funds from a federal agency or office, state agency or
319     office, political subdivision, or other public agency or office other than a payment that does not
320     materially exceed the greater of the fair market value and the cost of a service provided or
321     property conveyed by the project entity; and
322          (iii) does not receive, expend, or have the authority to compel payment from tax
323     revenue; or
324          (b) an interlocal entity that:
325          (i) was created before 1981 for the purpose of providing power supply at wholesale to
326     its members;
327          (ii) does not receive a payment of funds from a federal agency or office, state agency or
328     office, political subdivision, or other public agency or office other than a payment that does not
329     materially exceed the greater of the fair market value and the cost of a service provided or
330     property conveyed by the interlocal entity; and
331          (iii) does not receive, expend, or have the authority to compel payment from tax
332     revenue.
333          (14) (a) "Use" means to use, own, manage, hold, keep safe, maintain, invest, deposit,
334     administer, receive, expend, appropriate, disburse, or have custody.
335          (b) "Use" includes, when constituting a noun, the corresponding nominal form of each
336     term in Subsection (13)(a), individually.
337          Section 9. Section 11-13-603, which is renumbered from Section 11-13-315 is
338     renumbered and amended to read:
339          [11-13-315].      11-13-603. Taxed interlocal entity.
340          [(1) As used in this section:]
341          [(a) "Asset" means funds, money, an account, real or personal property, or personnel.]
342          [(b) "Governmental law" means:]
343          [(i) Title 51, Chapter 2a, Accounting Reports from Political Subdivisions, Interlocal
344     Organizations, and Other Local Entities Act;]
345          [(ii) Title 63A, Chapter 3, Division of Finance;]
346          [(iii) Title 63G, Chapter 6a, Utah Procurement Code;]
347          [(iv) a law imposing an obligation on a taxed interlocal entity similar to an obligation
348     imposed by a law described in Subsection (1)(b)(i), (ii), or (iii);]
349          [(v) an amendment to or replacement or renumbering of a law described in Subsection
350     (1)(b)(i), (ii), (iii), or (iv); or]
351          [(vi) a law superseding a law described in Subsection (1)(b)(i), (ii), (iii), or (iv).]
352          [(c) "Public asset" means:]
353          [(i) an asset used by a public entity;]
354          [(ii) tax revenue;]
355          [(iii) state funds; or]
356          [(iv) public funds.]
357          [(d) (i) "Taxed interlocal entity" means a project entity that:]
358          [(A) is not exempt from a tax or fee in lieu of taxes imposed in accordance with Part 3,
359     Project Entity Provisions;]
360          [(B) does not receive a payment of funds from a federal agency or office, state agency
361     or office, political subdivision, or other public agency or office other than a payment that does
362     not materially exceed the greater of the fair market value and the cost of a service provided or
363     property conveyed by the project entity; and]
364          [(C) does not receive, expend, or have the authority to compel payment from tax
365     revenue.]
366          [(ii) "Taxed interlocal entity" includes an interlocal entity that:]
367          [(A) was created before 1981 for the purpose of providing power supply at wholesale
368     to its members;]
369          [(B) does not receive a payment of funds from a federal agency or office, state agency
370     or office, political subdivision, or other public agency or office other than a payment that does
371     not materially exceed the greater of the fair market value and the cost of a service provided or
372     property conveyed by the interlocal entity; and]
373          [(C) does not receive, expend, or have the authority to compel payment from tax
374     revenue.]
375          [(e) (i) "Use" means to use, own, manage, hold, keep safe, maintain, invest, deposit,
376     administer, receive, expend, appropriate, disburse, or have custody.]
377          [(ii) "Use" includes, when constituting a noun, the corresponding nominal form of each
378     term in Subsection (1)(e)(i), individually.]
379          [(2)] (1) Notwithstanding any other provision of law[,]:
380          (a) the use of an asset by a taxed interlocal entity does not constitute the use of a public
381     asset[.];
382          [(3) Notwithstanding any other provision of law,]
383          (b) a taxed interlocal entity's use of an asset that was a public asset [prior to] before the
384     taxed interlocal entity's use of the asset does not constitute a taxed interlocal entity's use of a
385     public asset[.];
386          [(4) Notwithstanding any other provision of law,]
387          (c) an official of a project entity is not a public treasurer[.]; and
388          [(5) Notwithstanding any other provision of law,]
389          (d) a taxed interlocal entity's governing [body, as described in Section 11-13-206,]
390     board shall determine and direct the use of an asset by the taxed interlocal entity.
391          [(6)] (2) A taxed interlocal entity is not subject to the provisions of Title 63G, Chapter
392     6a, Utah Procurement Code.
393          [(7) (a)] (3) (a) A taxed interlocal entity is not a participating local entity as defined in
394     Section 63A-3-401.
395          (b) For each fiscal year of a taxed interlocal entity, the taxed interlocal entity shall
396     provide:
397          (i) the taxed interlocal entity's financial statements for and as of the end of the fiscal
398     year and the prior fiscal year, including:
399          (A) the taxed interlocal entity's [balance sheet] statement of net position as of the end
400     of the fiscal year and the prior fiscal year, and the related statements of revenues and expenses
401     and of cash flows for the fiscal year; [and] or
402          (B) financial statements that are equivalent to the financial statements described in
403     Subsection (3)(b)(i)(A) and, at the time the financial statements were created, were in
404     compliance with generally accepted accounting principles that are applicable to taxed interlocal
405     entities; and
406          (ii) the accompanying auditor's report and management's discussion and analysis with
407     respect to the taxed interlocal entity's financial statements for and as of the end of the fiscal
408     year.
409          (c) The taxed interlocal entity shall provide the information described in [Subsections
410     (7)(b)(i) and(ii)] Subsection (3)(b):
411          (i) in a manner described in Subsection 63A-3-405(3); and
412          (ii) within a reasonable time after the taxed interlocal entity's independent auditor
413     delivers to the taxed interlocal entity's governing [body] board the auditor's report with respect
414     to the financial statements for and as of the end of the fiscal year.
415          (d) Notwithstanding Subsections [(7)] (3)(b) and (c) or a taxed interlocal entity's
416     compliance with one or more of the requirements of Title 63A, Chapter 3, Division of Finance:
417          (i) the taxed interlocal entity is not subject to Title 63A, Chapter 3, Division of
418     Finance; and
419          (ii) the information described in Subsection [(7)] (3)(b)(i) or (ii) does not constitute
420     public financial information as defined in Section 63A-3-401.
421          [(8)] (4) (a) A taxed interlocal entity's governing [body] board is not a governing board
422     as defined in Section 51-2a-102.
423          (b) A taxed interlocal entity is not subject to the provisions of Title 51, Chapter 2a,
424     Accounting Reports from Political Subdivisions, Interlocal Organizations, and Other Local
425     Entities Act.
426          [(9) (a)] (5) Notwithstanding any other provision of law, a taxed interlocal entity is not
427     subject to the following provisions:
428          [(i)] (a) Part 4, Governance;
429          [(ii)] (b) Part 5, Fiscal Procedures for Interlocal Entities;
430          [(iii)] (c) Subsection 11-13-204(1)(a)(i) or (ii)(J);
431          [(iv)] (d) Subsection 11-13-206(1)(f);
432          [(v)] (e) Subsection 11-13-218(5)(a);
433          [(vi)] (f) Section 11-13-225;
434          [(vii)] (g) Section 11-13-226; or
435          [(viii)] (h) Section 53-2a-605.
436          [(b)] (6) (a) In addition to having the powers [provided] described in Subsection
437     11-13-204(1)(a)(ii), a taxed interlocal entity may, for the regulation of the entity's affairs and
438     conduct of its business, adopt, amend, or repeal bylaws, policies, or procedures.
439          [(c)] (b) Nothing in Part 4, Governance, or Part 5, Fiscal Procedures for Interlocal
440     Entities, may be construed to limit the power or authority of a taxed interlocal entity.
441          [(10)] (7) (a) A governmental law enacted after May 12, 2015, is not applicable to, is
442     not binding upon, and does not have effect on a taxed interlocal entity unless the governmental
443     law expressly states the section of governmental law to be applicable to and binding upon the
444     taxed interlocal entity with the following words: "[Applicable section or subsection number]
445     constitutes an exception to Subsection 11-13-315(10) and is applicable to and binding upon a
446     taxed interlocal entity."
447          (b) Sections 11-13-601 through 11-13-608 constitute an exception to Subsection (7)(a)
448     and are applicable to and binding upon a taxed interlocal entity.
449          Section 10. Section 11-13-604 is enacted to read:
450          11-13-604. Segments authorized.
451          (1) (a) To the extent authorized in a taxed interlocal entity's organization agreement or
452     by a majority of the public entities that are parties to a taxed interlocal entity's organization
453     agreement , the governing board of a taxed interlocal entity may by resolution establish or
454     provide for the establishment of one or more segments that have separate rights, powers,
455     privileges, authority or by a majority of the public entities that are parties to a taxed interlocal
456     entity's organization agreement , or duties with respect to, as specified in the segment's
457     organizing resolution, the taxed interlocal entity's:
458          (i) property;
459          (ii) assets;
460          (iii) projects;
461          (iv) undertakings;
462          (v) opportunities;
463          (vi) actions;
464          (vii) debts;
465          (viii) liabilities;
466          (ix) obligations; or
467          (x) any combination of the items listed in Subsections (1)(a)(i) through (viii).
468          (b) To the extent provided in the organization agreement of a segment's associated
469     entity, a segment may have a separate purpose from the associated entity.
470          (c) The name of a segment shall:
471          (i) contain the name of the segment's associated entity; and
472          (ii) be distinguishable from the name of any other segment established by the
473     associated entity.
474          (2) Notwithstanding any other provision of law, the debts, liabilities, and obligations
475     incurred, contracted for, arising out of the conduct of or otherwise existing with respect to a
476     particular segment are only enforceable or chargeable against the assets of that segment, and
477     not against the assets of the segment's associated entity generally or any other segment
478     established by the segment's associated entity if:
479          (a) the segment is established by or in accordance with an organizing resolution;
480          (b) separate records are maintained for the segment to the extent necessary to avoid the
481     segment's records constituting a fraud upon the segment's creditors;
482          (c) the assets associated with the segment are held and accounted for separately from
483     the assets of any other segment established by the associated entity to the extent necessary to
484     avoid the segment's accounting for the segment's assets constituting a fraud upon the segment's
485     creditors;
486          (d) the segment's organizing resolution provides for a limitation on liabilities of the
487     segment; and
488          (e) a notice of limitation on liabilities of the segment is recorded in accordance with
489     Section 11-13-605.
490          (3) Except as otherwise provided in the segment's organizing resolution, a segment that
491     satisfies the conditions described in Subsections (2)(a) through (e):
492          (a) is treated as a separate interlocal entity; and
493          (b) may:
494          (i) in its own name, contract, hold title to property, grant liens and security interests,
495     and sue and be sued;
496          (ii) exercise all or any part of the powers, privileges, rights, authority, and capacity of
497     the segment's associated entity; and
498          (iii) engage in any action in which the segment's associated entity may engage.
499          (4) Except as otherwise provided in the organization agreement of the segment's
500     associated entity or in the segment's organizing resolution, a segment is governed by the
501     organization agreement of the segment's associated entity.
502          (5) Subject to Subsection (4), a segment's organizing resolution:
503          (a) may address any matter relating to the segment, including the segment's governance
504     or operation, to the extent that the organization agreement of a segment's associated entity does
505     not address the matter; and
506          (b) to the extent not addressed in the organization agreement of the segment's
507     associated entity, shall address the following matters:
508          (i) the powers delegated to the segment;
509          (ii) the manner in which the segment is to be governed, including whether the
510     segment's governing body is the same as the governing board of the segment's associated
511     entity;
512          (iii) subject to Subsection (6), if the segment's governing body is different from the
513     governing board of the segment's associated entity, the manner in which the members of the
514     segment's governing body are appointed or selected;
515          (iv) the segment's purpose;
516          (v) the manner of financing the segment's actions;
517          (vi) how the segment will establish and maintain a budget;
518          (vii) how to partially or completely terminate the segment and, upon a partial or
519     complete termination, how to dispose of the segment's property;
520          (viii) the process, conditions, and terms for withdrawal of a participating public agency
521     from the segment; and
522          (ix) voting rights, including whether voting is weighted, and, if so, the basis upon
523     which the vote weight is determined.
524          (6) An organizing resolution shall provide that if a segment's governing body is
525     different from the governing board of the segment's associated entity, the Utah public agencies
526     that are parties to the organization agreement of the segment's associated entity may appoint or
527     select members of the segment's governing body with a majority of the voting power.
528          (7) A segment may not:
529          (a) transfer the segment's property or other assets to the segment's associated entity or
530     to another segment established by the segment's associated entity if the transfer impairs the
531     ability of the segment to pay the segment's debts that exist at the time of the transfer, unless the
532     segment's associated entity or the other segment gives fair value for the property or asset; or
533          (b) assign a tax or other liability imposed against the segment to the segment's
534     associated entity or to another segment established by the segment's associated entity if the
535     assignment impairs a creditor's ability to collect the amount due when owed.
536          (8) If a segment and a segment's associated entity or another segment established by the
537     segment's associated entity are involved in a joint action or have a common interest in a
538     facility, the segment's or the segment's associated entity's maintenance of records and accounts
539     related to the joint action or common interest does not constitute a violation of Subsection
540     (2)(b) or (c).
541          (9) Except as otherwise provided in this part or where clearly not applicable, the
542     provisions of law that apply to a segment's associated entity also apply to the segment,
543     including Subsection 11-13-205(5), as if the segment were a separate legal or administrative
544     entity.
545          (10) (a) To the extent an associated entity is a taxpayer as defined in Section 59-8-103,
546     the associated entity shall pay tax on the associated entity's gross receipts at the rate of tax that
547     would apply if all gross receipts of the associated entity and the associated entity's segments, in
548     the aggregate, were the gross receipts of a single taxpayer.
549          (b) Each segment of an associated entity that is a taxpayer as defined in Section
550     59-8-103 shall pay tax on the segment's gross receipts each period described in Subsection
551     59-8-105(1) at the same rate of tax as the rate of tax paid by the segment's associated entity for
552     the same period.
553          (c) Notwithstanding Subsections (10)(a) and (b):
554          (i) an associated entity is not liable for the tax imposed on a segment; and
555          (ii) a segment of an associated entity is not liable for the tax imposed on the segment's
556     associated entity or on another segment of the segment's associated entity.
557          Section 11. Section 11-13-605 is enacted to read:
558          11-13-605. Notice of limitation on liabilities of segments.
559          (1) (a) A notice of limitation on liabilities of a segment described in Subsection
560     11-13-604(2)(e) shall:
561          (i) state:
562          (A) the name of the segment's associated entity;
563          (B) the associated entity's indexed office;
564          (C) the associated entity's principal county; and
565          (D) that the liabilities of each segment established by the associated entity, regardless
566     of when the segment is created, are limited in accordance with the provisions of this part; and
567          (ii) be acknowledged by a director or an officer of the associated entity.
568          (b) A notice of limitation on liabilities of a segment is not required to refer to a
569     particular segment.
570          (2) (a) The requirements described in Section 57-3-105 do not apply to a notice of
571     limitation on liabilities of a segment.
572          (b) A county recorder shall record a notice of limitation on liabilities of a segment that:
573          (i) is submitted to the county recorder for recording; and
574          (ii) satisfies the requirements described in Subsection (1)(a).
575          (3) A recorded notice of limitation on liabilities of a segment does not create any
576     interest in or otherwise encumber the property described in the notice.
577          (4) Title 38, Chapter 9, Wrongful Lien Act, and Title 38, Chapter 9a, Wrongful Lien
578     Injunctions, do not apply to a notice of limitation on liabilities of a segment.
579          (5) A notice of limitation on liabilities of a segment that is recorded in accordance with
580     this part in the principal county of the segment's associated entity constitutes notice for all
581     purposes of the limitation on liabilities of the segment, regardless of whether the segment is
582     established at the time the notice is recorded.
583          Section 12. Section 11-13-606 is enacted to read:
584          11-13-606. Members of a segment.
585          (1) Except as otherwise provided by a segment's organizing resolution in accordance
586     with Subsection (2), a segment's associated entity is the sole member of the segment.
587          (2) A segment's organizing resolution may provide that a segment's membership
588     includes a public agency other than the segment's associated entity only if the organizing
589     resolution provides:
590          (a) the relative rights, powers, and duties of the segment's members;
591          (b) whether the members exercise the members' rights and powers and discharge the
592     members' duties in one or more classes or groups;
593          (c) the method by which a member's membership in the segment is terminated;
594          (d) the effect of a member's termination; and
595          (e) the effect of the termination of the last member's membership in the segment,
596     including the effect on the existence of the segment.
597          Section 13. Section 11-13-607 is enacted to read:
598          11-13-607. Limitations of liability for directors and officers.
599          (1) A director or an officer of a taxed interlocal entity or a segment is not liable to the
600     taxed interlocal entity, the segment, a member of the taxed interlocal entity, a member of the
601     segment, a conservator, receiver, or successor-in-interest of the taxed interlocal entity, or a
602     conservator, receiver, or successor-in-interest of the segment for any action or failure to act as a
603     director or an officer, unless:
604          (a) the director or the officer breaches a fiduciary duty that the director or the officer
605     owes to the taxed interlocal entity, the segment, a member of the taxed interlocal entity, or a
606     member of the segment; and
607          (b) the breach described in Subsection (1)(a) constitutes gross negligence, willful
608     misconduct, or intentional infliction of harm on the taxed interlocal entity, the segment, a
609     member of the taxed interlocal entity, or a member of the segment.
610          (2) (a) Except as provided in Subsection (2)(b), a taxed interlocal entity or a segment
611     may limit or eliminate the liability of a director or an officer described in Subsection (1) for
612     monetary damages.
613          (b) A taxed interlocal entity or a segment may not limit or eliminate liability of a
614     director or an officer in accordance with Subsection (2)(a) for monetary damages arising out of:
615          (i) a breach of a fiduciary duty;
616          (ii) an intentional infliction of harm on the taxed interlocal entity, the segment, a
617     member of the taxed interlocal entity, or a member of the segment;
618          (iii) improper financial benefit; or
619          (iv) willful misconduct that constitutes an intentional violation of criminal law.
620          (3) The provisions of this section do not affect the liability of a director or an officer
621     for an act or omission that occurred before May 10, 2016.
622          (4) (a) The duties owed by a director or an officer of a taxed interlocal entity or a
623     segment consist of the following:
624          (i) any fiduciary duty;
625          (ii) any other duty specified in:
626          (A) the organization agreement or bylaws of the taxed interlocal entity;
627          (B) the organizing resolution or bylaws of the segment; or
628          (C) any contract between the director or the officer and the taxed interlocal entity or the
629     segment; and
630          (iii) each duty that applies to a taxed interlocal entity under Title 67, Chapter 16, Utah
631     Public Officers' and Employees' Ethics Act.
632          (b) Each fiduciary duty of a director or an officer of a segment shall be consistent with
633     the fiduciary duties of a director or an officer of the segment's associated entity.
634          (5) (a) Nothing in this section nor any action taken by a taxed interlocal entity, a
635     segment, a director or an officer of a taxed interlocal entity, or a director or an officer of a
636     segment constitutes a waiver of any immunity or defense available under Title 63G, Chapter 7,
637     Governmental Immunity Act of Utah.
638          (b) Subsections (1)(a) and (b) and (2)(b) apply only to the extent that the taxed
639     interlocal entity, the segment, the director or the officer of the taxed interlocal entity, or the
640     director or the officer of the segment is subject to liability under Title 63G, Chapter 7,
641     Governmental Immunity Act of Utah.
642          Section 14. Section 11-13-608 is enacted to read:
643          11-13-608. Termination of associated entity or segment.
644          (1) The termination of a segment does not affect the segment's or the segment's
645     associated entity's limitation on liabilities under this part.
646          (2) A segment is terminated upon the termination of the segment's associated entity.
647          (3) (a) Subject to Subsection (3)(b), the termination of a segment's associated entity or
648     a segment may not affect the liability of the governing board, the governing body, a member of
649     the governing board, a member of the governing body, an officer, an official, a contractor, or an
650     employee for an action authorized:
651          (i) before the termination of the associated entity or the segment by the governing
652     board of the terminated associated entity or by the governing body of the terminated segment;
653     or
654          (ii) after the termination of the associated entity or the segment by:
655          (A) a majority of individuals serving as members of the governing board of the
656     terminated associated entity at the time the associated entity is terminated; or
657          (B) a majority of the individuals serving as members of the governing body of the
658     terminated segment at the time the segment is terminated.
659          (b) Subsection (3)(a) applies to each action to:
660          (i) provide for the claims, debts, obligations, or liabilities of the terminated associated
661     entity or the terminated segment; or
662          (ii) otherwise wind up the affairs of the terminated associated entity or the terminated
663     segment.
664          Section 15. Section 63A-3-401 is amended to read:
665          63A-3-401. Definitions.
666          As used in this part:
667          (1) "Board" means the Utah Transparency Advisory Board created under Section
668     63A-3-403.
669          (2) "Division" means the Division of Finance of the Department of Administrative
670     Services.
671          (3) (a) "Independent entity," except as provided in Subsection (3)(c), means the same
672     as that term is defined in Section 63E-1-102.
673          (b) "Independent entity" includes an entity that is part of an independent entity
674     described in this Subsection (3), if the entity is considered a component unit of the independent
675     entity under the governmental accounting standards issued by the Governmental Accounting
676     Standards Board.
677          (c) "Independent entity" does not include:
678          (i) the Workers' Compensation Fund created in Section 31A-33-102; or
679          (ii) the Utah State Retirement Office created in Section 49-11-201.
680          (4) "Participating local entity" means each of the following local entities, if the entity
681     meets the size or budget thresholds established by the board under Subsection
682     63A-3-403(3)(e):
683          (a) a county;
684          (b) a municipality;
685          (c) a local district under Title 17B, Limited Purpose Local Government Entities - Local
686     Districts;
687          (d) a special service district under Title 17D, Chapter 1, Special Service District Act;
688          (e) a school district;
689          (f) a charter school;
690          (g) except for a taxed interlocal entity [described] as defined in Section [11-13-315]
691     11-13-602, an interlocal entity as defined in Section 11-13-103; and
692          (h) except for a taxed interlocal entity [described] as defined in Section [11-13-315]
693     11-13-602, an entity that is part of an entity described in Subsections (4)(a) through (g), if the
694     entity is considered a component unit of the entity described in Subsections (4)(a) through (g)
695     under the governmental accounting standards issued by the Governmental Accounting
696     Standards Board.
697          (5) (a) "Participating state entity" means the state of Utah, including its executive,
698     legislative, and judicial branches, its departments, divisions, agencies, boards, commissions,
699     councils, committees, and institutions.
700          (b) "Participating state entity" includes an entity that is part of an entity described in
701     Subsection (5)(a), if the entity is considered a component unit of the entity described in
702     Subsection (5)(a) under the governmental accounting standards issued by the Governmental
703     Accounting Standards Board.
704          (6) "Public financial information" means records that are required to be made available
705     on the Utah Public Finance Website, a participating local entity's website, or an independent
706     entity's website as required by this part, and as the term "public financial information" is
707     defined by rule under Section 63A-3-404.