This document includes Senate Committee Amendments incorporated into the bill on Mon, Mar 11, 2019 at 2:55 PM by estauffer.




Chief Sponsor: Kirk A. Cullimore

House Sponsor: Brady Brammer


9     General Description:
10          This bill amends the Sales Representative Commission Payment Act.
11     Highlighted Provisions:
12          This bill:
13          ▸     defines terms;
14          ▸     excludes a participant in a Ŝ→ [
multilevel marketing] direct sales ←Ŝ company from
14a     the definition of
15     "sales representative"; and
16          ▸     makes technical and conforming changes.
17     Money Appropriated in this Bill:
18          None
19     Other Special Clauses:
20          None
21     Utah Code Sections Affected:
22     AMENDS:
23          34-44-102, as last amended by Laws of Utah 2010, Chapter 379

25     Be it enacted by the Legislature of the state of Utah:
26          Section 1. Section 34-44-102 is amended to read:
27          34-44-102. Definitions.
28          As used in this chapter:
29          (1) "Business relationship" means an agreement that governs the relationship of
30     principal and sales representative.
31          (2) "Commission" means:
32          (a) compensation:
33          (i) that accrues to a sales representative;
34          (ii) for payment by a principal; and
35          (iii) at a rate expressed as a percentage of the dollar amount of sales, orders, or profits;
36     or
37          (b) any other method of compensation agreed to between a sales representative and a
38     principal including:
39          (i) fees for services; and
40          (ii) a retainer.
41          (3) (a) " Ŝ→ [
Multilevel marketing] Direct sales ←Ŝ company" means a person that:
42          (i) sells, distributes, or supplies for consideration a good or service through
43     participants:
44          (A) at different levels of distribution; or
45          (B) in accordance with a formula for compensating participants in whole or in part
46     based on:
47          (I) the sale of a good or service; and
48          (II) the recruitment of or the performance or action of another participant; and
49          (ii) (A) permits participants to recruit other participants to sell, distribute, or supply for
50     consideration the person's good or service; or
51          (B) provides for commission, cross-commissions, override commissions, bonuses,
52     refunds, dividends, or other consideration that is or may be paid as a result of:
53          (I) the sale of a good or service; or
54          (II) the recruitment of or the performance or action of another participant.
55          (b) As used in this Subsection (3), "participant" means an independent agent,
56     contractor, or distributor.
57          [(3)] (4) "Principal" means a person who:
58          (a) engages in any of the following activities with regard to a product or service:

59          (i) manufactures;
60          (ii) produces;
61          (iii) imports;
62          (iv) sells; or
63          (v) distributes;
64          (b) establishes a business relationship with a sales representative to solicit orders for a
65     product or a service described in Subsection [(3)] (4)(a); and
66          (c) agrees to compensate a sales representative, in whole or in part, by commission.
67          [(4)] (5) (a) Except as provided in Subsection [(4)] (5)(b), "sales representative" means
68     a person who enters into a business relationship with a principal:
69          (i) to solicit orders for a product or a service described in Subsection [(3)] (4)(a); and
70          (ii) under which the person is compensated, in whole or in part, by commission.
71          (b) "Sales representative" does not include:
72          (i) an employee of a principal;
73          (ii) a person licensed under Title 31A, Insurance Code;
74          (iii) a person licensed under Title 41, Chapter 3, Part 2, Licensing;
75          (iv) a person licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices
76     Act;
77          (v) a person who provides a product or service under a business relationship with a
78     principal that is incident to the purchase or sale of real property; [or]
79          (vi) a person who places an order or purchases a product or service for that person's
80     own account for resale[.]; or
81          (vii) an independent agent, contractor, or distributor through whom a Ŝ→ [
82     marketing
] direct sales ←Ŝ
company supplies for consideration a good or service.
83          [(5)] (6) "Terminates" or "termination" means the end of a business relationship
84     between a sales representative and a principal, whether by:
85          (a) agreement;
86          (b) expiration of a time period; or
87          (c) exercise of a right of termination by either the principal or the sales representative.