Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 2002 First Substitute (2021S2)

Sponsor

Sen. Owens, D.R.

Final action

Governor Signed 11/16/2021

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• establishes a time after which a commercial project entity may no longer exercise eminent domain;
• clarifies that project entities and certain taxed interlocal entities are subject to audits by the Office of the Legislative Auditor General;
• establishes a time after which a taxed interlocal entity that is a project entity may no longer create a segment;
• modifies a provision that states that certain governmental laws do not apply to taxed interlocal entities; and
• makes technical changes.

Every vote on this bill

Bill text

INTERLOCAL COOPERATION ACT AMENDMENTS
SECOND SPECIAL SESSION
STATE OF UTAH
Chief Sponsor: Derrin R. Owens
House Sponsor: 
Carl R. Albrecht
LONG TITLE
General Description:
This bill amends provisions related to project entities and taxed interlocal entities.
Highlighted Provisions:
This bill:
▸ establishes a time after which a commercial project entity may no longer exercise
eminent domain;
▸ clarifies that project entities and certain taxed interlocal entities are subject to audits
by the Office of the Legislative Auditor General;
▸ establishes a time after which a taxed interlocal entity that is a project entity may no
longer create a segment;
▸ modifies a provision that states that certain governmental laws do not apply to taxed
interlocal entities; and
▸ makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
AMENDS:
11-13-314
, as last amended by Laws of Utah 2014, Chapter 59
11-13-603
, as last amended by Laws of Utah 2021, Chapter 84
11-13-604
, as last amended by Laws of Utah 2020, Chapter 381
ENACTS:
11-13-316
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
11-13-314
 is amended to read:
11-13-314.
Eminent domain authority of certain commercial project entities.
(1) (a) Subject to [
Subsection (2)
] 
Subsections (2) and (3)
, a commercial project entity
that existed as a project entity before January 1, 1980
,
 may, with respect to a project or
facilities providing additional project capacity in which the commercial project entity has an
interest, acquire property within the state through eminent domain, subject to restrictions
imposed by Title 78B, Chapter 6, Part 5, Eminent Domain, and general law for the protection
of other communities.
(b) Subsection (1)(a) may not be construed to:
(i) give a project entity the authority to acquire water rights by eminent domain; or
(ii) diminish any other authority a project entity may claim to have under the law to
acquire property by eminent domain.
(2) Each project entity that intends to acquire property by eminent domain under
Subsection (1)(a) shall comply with the requirements of Section 
78B-6-505
.
(3) A commercial project entity that has not taken a final vote to approve the filing of
an eminent domain action as described in Subsection 
78B-6-504
(2)(c) prior to November 10,
2021, may not exercise the authority described in Subsection (1).
Section 2. Section 
11-13-316
 is enacted to read:
 11-13-316.
Project entity oversight.
(1) Notwithstanding any other provision of law, a project entity is a political
subdivision that:
(a) pursuant to Utah Constitution, Article VI, Section 33, is subject to the authority of
the legislative auditor to conduct audits of any funds, functions, and accounts in any political
subdivision of this state; and
(b) is subject to the requirement to provide the Office of the Legislative Auditor
General with all records, documents, and reports necessary for the legislative auditor general or
the office to fulfill the duties described in Subsection (1)(a).
(2) Subsection (1) takes precedence over Section 
36-12-15
.
Section 3. Section 
11-13-603
 is amended to read:
11-13-603.
Taxed interlocal entity.
(1) [
Notwithstanding
] 
Except for purposes of an audit, examination, or review by the
Office of the Legislative Auditor General as described in Subsection (8) and notwithstanding
any other provision of law:
(a) the use of an asset by a taxed interlocal entity does not constitute the use of a public
asset;
(b) a taxed interlocal entity's use of an asset that was a public asset before the taxed
interlocal entity's use of the asset does not constitute a taxed interlocal entity's use of a public
asset;
(c) an official of a project entity is not a public treasurer; and
(d) a taxed interlocal entity's governing board shall determine and direct the use of an
asset by the taxed interlocal entity.
(2) A taxed interlocal entity is not subject to the provisions of Title 63G, Chapter 6a,
Utah Procurement Code.
(3) (a) A taxed interlocal entity is not a participating local entity as defined in Section
67-3-12
.
(b) For each fiscal year of a taxed interlocal entity, the taxed interlocal entity shall
provide:
(i) the taxed interlocal entity's financial statements for and as of the end of the fiscal
year and the prior fiscal year, including:
(A) the taxed interlocal entity's statement of net position as of the end of the fiscal year
and the prior fiscal year, and the related statements of revenues and expenses and of cash flows
for the fiscal year; or
(B) financial statements that are equivalent to the financial statements described in
Subsection (3)(b)(i)(A) and, at the time the financial statements were created, were in
compliance with generally accepted accounting principles that are applicable to taxed interlocal
entities; and
(ii) the accompanying auditor's report and management's discussion and analysis with
respect to the taxed interlocal entity's financial statements for and as of the end of the fiscal
year.
(c) The taxed interlocal entity shall provide the information described in Subsection
(3)(b) within a reasonable time after the taxed interlocal entity's independent auditor delivers to
the taxed interlocal entity's governing board the auditor's report with respect to the financial
statements for and as of the end of the fiscal year.
(d) Notwithstanding Subsections (3)(b) and (c) or a taxed interlocal entity's compliance
with one or more of the requirements of Title 63A, Chapter 3, Division of Finance:
(i) the taxed interlocal entity is not subject to Title 63A, Chapter 3, Division of
Finance; and
(ii) the information described in Subsection (3)(b)(i) or (ii) does not constitute public
financial information as defined in Section 
67-3-12
.
(4) (a) A taxed interlocal entity's governing board is not a governing board as defined
in Section 
51-2a-102
.
(b) A taxed interlocal entity is not subject to the provisions of Title 51, Chapter 2a,
Accounting Reports from Political Subdivisions, Interlocal Organizations, and Other Local
Entities Act.
(5) Notwithstanding any other provision of law, a taxed interlocal entity is not subject
to the following provisions:
(a) Part 4, Governance;
(b) Part 5, Fiscal Procedures for Interlocal Entities;
(c) Subsection 
11-13-204
(1)(a)(i) or (ii)(J);
(d) Subsection 
11-13-206
(1)(f);
(e) Subsection 
11-13-218
(5)(a);
(f) Section 
11-13-225
;
(g) Section 
11-13-226
; or
(h) Section 
53-2a-605
.
(6) (a) In addition to having the powers described in Subsection 
11-13-204
(1)(a)(ii), a
taxed interlocal entity may, for the regulation of the entity's affairs and conduct of its business,
adopt, amend, or repeal bylaws, policies, or procedures.
(b) Nothing in Part 4, Governance, or Part 5, Fiscal Procedures for Interlocal Entities,
may be construed to limit the power or authority of a taxed interlocal entity.
(7) (a) A governmental law enacted after May 12, 2015, 
and on or before November
10, 2021,
 is not applicable to, is not binding upon, and does not have effect on a taxed
interlocal entity 
that is a project entity
 unless the governmental law expressly states the section
of governmental law to be applicable to and binding upon the taxed interlocal entity with the
following words: "[Applicable section or subsection number] constitutes an exception to
Subsection 
11-13-603
(7)(a) and is applicable to and binding upon a taxed interlocal entity."
(b) A governmental law enacted after May 12, 2015, is not applicable to, is not binding
upon, and does not have effect on a taxed interlocal entity that is an energy services interlocal
entity unless the governmental law expressly states the section of governmental law to be
applicable to and binding upon the energy services interlocal entity with the following words:
"[Applicable section or subsection number] constitutes an exception to Subsection
11-13-603
(7)(a) and is applicable to and binding upon an energy services interlocal entity."
[
(b)
] 
(c)
 Sections 
11-13-601
 through 
11-13-608
 constitute an exception to [
Subsection
(7)(a)
] 
Subsections (7)(a) and (7)(b)
 and are applicable to and binding upon a taxed interlocal
entity.
(8) (a) Notwithstanding any other provision of law, a taxed interlocal entity that is a
project entity is a political subdivision that:
(i) pursuant to Utah Constitution, Article VI, Section 33, is subject to the authority of
the legislative auditor to conduct audits of any funds, functions, and accounts in any political
subdivision of this state; and
(ii) is subject to the requirement to provide the Office of the Legislative Auditor
General with all records, documents, and reports necessary of the legislative auditor general or
the office to fulfill the duties described in Subsection (8)(a)(i).
(b) Subsection (8)(a) takes precedence over Section 
36-12-15
.
Section 4. Section 
11-13-604
 is amended to read:
11-13-604.
Segments authorized.
(1) (a) 
(i)
 [
To
] 
If a taxed interlocal entity is a project entity, and to
 the extent
authorized in a taxed interlocal entity's organization agreement or by a majority of the public
entities that are parties to a taxed interlocal entity's organization agreement , the governing
board of a taxed interlocal entity may by resolution 
adopted on or before November 10, 2021,
establish or provide for the establishment of one or more segments that have separate rights,
powers, privileges, authority or by a majority of the public entities that are parties to a taxed
interlocal entity's organization agreement , or duties with respect to, as specified in the
segment's organizing resolution, the taxed interlocal entity's:
[
(i)
] 
(A)
 property;
[
(ii)
] 
(B)
 assets;
[
(iii)
] 
(C)
 projects;
[
(iv)
] 
(D)
 undertakings;
[
(v)
] 
(E)
 opportunities;
[
(vi)
] 
(F)
 actions;
[
(vii)
] 
(G)
 debts;
[
(viii)
] 
(H)
 liabilities;
[
(ix)
] 
(I)
 obligations; or
[
(x)
] 
(J)
 any combination of the items listed in Subsections (1)(a)(i)
(A)
 through [
(viii)
]
(H)
.
(ii) If a taxed interlocal entity is not a project entity, and to the extent authorized in a
taxed interlocal entity's organization agreement, the governing board of a taxed interlocal entity
may by resolution establish or provide for the establishment of one or more segments that have
separate rights, powers, privileges, authority, or by a majority of the public entities that are
parties to a taxed interlocal entity's organization agreement, or duties with respect to, as
specified in the segment's organizing resolution, the taxed interlocal entity's:
(A) property;
(B) assets;
(C) projects;
(D) undertakings;
(E) opportunities;
(F) actions;
(G) debts;
(H) liabilities;
(I) obligations; or
(J) any combination of the items listed in Subsections (1)(b)(ii)(A) through (H).
(b) To the extent provided in the organization agreement of a segment's associated
entity, a segment may have a separate purpose from the associated entity.
(c) The name of a segment shall:
(i) contain the name of the segment's associated entity; and
(ii) be distinguishable from the name of any other segment established by the
associated entity.
(2) Notwithstanding any other provision of law, the debts, liabilities, and obligations
incurred, contracted for, arising out of the conduct of or otherwise existing with respect to a
particular segment are only enforceable or chargeable against the assets of that segment, and
not against the assets of the segment's associated entity generally or any other segment
established by the segment's associated entity if:
(a) the segment is established by or in accordance with an organizing resolution;
(b) separate records are maintained for the segment to the extent necessary to avoid the
segment's records constituting a fraud upon the segment's creditors;
(c) the assets associated with the segment are held and accounted for separately from
the assets of any other segment established by the associated entity to the extent necessary to
avoid the segment's accounting for the segment's assets constituting a fraud upon the segment's
creditors;
(d) the segment's organizing resolution provides for a limitation on liabilities of the
segment; and
(e) a notice of limitation on liabilities of the segment is recorded in accordance with
Section 
11-13-605
.
(3) Except as otherwise provided in the segment's organizing resolution, a segment that
satisfies the conditions described in Subsections (2)(a) through (e):
(a) is treated as a separate interlocal entity; and
(b) may:
(i) in its own name, contract, hold title to property, grant liens and security interests,
and sue and be sued;
(ii) exercise all or any part of the powers, privileges, rights, authority, and capacity of
the segment's associated entity; and
(iii) engage in any action in which the segment's associated entity may engage.
(4) Except as otherwise provided in the organization agreement of the segment's
associated entity or in the segment's organizing resolution, a segment is governed by the
organization agreement of the segment's associated entity.
(5) Subject to Subsection (4), a segment's organizing resolution:
(a) may address any matter relating to the segment, including the segment's governance
or operation, to the extent that the organization agreement of a segment's associated entity does
not address the matter; and
(b) to the extent not addressed in the organization agreement of the segment's
associated entity, shall address the following matters:
(i) the powers delegated to the segment;
(ii) the manner in which the segment is to be governed, including whether the
segment's governing body is the same as the governing board of the segment's associated
entity;
(iii) subject to Subsection (6), if the segment's governing body is different from the
governing board of the segment's associated entity, the manner in which the members of the
segment's governing body are appointed or selected;
(iv) the segment's purpose;
(v) the manner of financing the segment's actions;
(vi) how the segment will establish and maintain a budget;
(vii) how to partially or completely terminate the segment and, upon a partial or
complete termination, how to dispose of the segment's property;
(viii) the process, conditions, and terms for withdrawal of a participating public agency
from the segment; and
(ix) voting rights, including whether voting is weighted, and, if so, the basis upon
which the vote weight is determined.
(6) An organizing resolution shall provide that if a segment's governing body is
different from the governing board of the segment's associated entity, the Utah public agencies
that are parties to the organization agreement of the segment's associated entity may appoint or
select members of the segment's governing body with a majority of the voting power.
(7) A segment may not:
(a) transfer the segment's property or other assets to the segment's associated entity or
to another segment established by the segment's associated entity if the transfer impairs the
ability of the segment to pay the segment's debts that exist at the time of the transfer, unless the
segment's associated entity or the other segment gives fair value for the property or asset; or
(b) assign a tax or other liability imposed against the segment to the segment's
associated entity or to another segment established by the segment's associated entity if the
assignment impairs a creditor's ability to collect the amount due when owed.
(8) If a segment and a segment's associated entity or another segment established by the
segment's associated entity are involved in a joint action or have a common interest in a
facility, the segment's or the segment's associated entity's maintenance of records and accounts
related to the joint action or common interest does not constitute a violation of Subsection
(2)(b) or (c).
(9) Except as otherwise provided in this part or where clearly not applicable, the
provisions of law that apply to a segment's associated entity also apply to the segment,
including Subsection 
11-13-205
(5), as if the segment were a separate legal or administrative
entity.
(10) (a) To the extent an associated entity is a taxpayer as defined in Section 
59-8-103
,
the associated entity shall pay tax on the associated entity's gross receipts at the rate of tax that
would apply if all gross receipts of the associated entity and the associated entity's segments, in
the aggregate, were the gross receipts of a single taxpayer.
(b) Each segment of an associated entity that is a taxpayer as defined in Section
59-8-103
 shall pay tax on the segment's gross receipts each period described in Subsection
59-8-105
(1) at the same rate of tax as the rate of tax paid by the segment's associated entity for
the same period.
(c) Notwithstanding Subsections (10)(a) and (b):
(i) an associated entity is not liable for the tax imposed on a segment; and
(ii) a segment of an associated entity is not liable for the tax imposed on the segment's
associated entity or on another segment of the segment's associated entity.
[
(11) Notwithstanding any other provision of law, a segment is a project entity if the
segment's associated entity is a project entity.
]
Section 5. 
Effective date.
If approved by two-thirds of all the members elected to each house, this bill takes effect
upon approval by the governor, or the day following the constitutional time limit of Utah
Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
the date of veto override.