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S.B. 22
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WATER COMPANIES AND ASSOCIATIONS -
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ASSESSMENT AND VOTING RIGHTS
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Mike Dmitrich
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AN ACT RELATING TO CORPORATIONS; DEFINING TERMS; AMENDING
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ASSESSMENT PROVISIONS FOR CERTAIN COMPANIES AND ASSOCIATIONS;
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ADDRESSING VOTING RIGHTS; AND MAKING TECHNICAL CHANGES.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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16-4-7, as last amended by Chapter 29, Laws of Utah 1961
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16-4-24, Utah Code Annotated 1953
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16-6-19, as last amended by Chapter 108, Laws of Utah 1990
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16-6-30, as enacted by Chapter 17, Laws of Utah 1963
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31A-5-101, as last amended by Chapter 6, Laws of Utah 1992, Third Special Session
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31A-9-101, as last amended by Chapter 108, Laws of Utah 1990
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ENACTS:
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16-4-1.5, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
16-4-1.5
is enacted to read:
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16-4-1.5. Definitions.
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For purposes of this chapter:
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(1) "Articles of incorporation" is as defined in Section
16-6-19
.
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(2) "Bylaws" is as defined in Section
16-6-19
.
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Section 2.
Section
16-4-7
is amended to read:
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16-4-7. Equal assessments required.
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[In the case of full-paid stock,] Except as provided in Section
16-4-24
, all fully-paid stock
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subject to assessment [must] shall be assessed equally.
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Section 3.
Section
16-4-24
is amended to read:
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16-4-24. Certain water companies and associations -- Assessments -- Other than pro
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rata basis.
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[Any] (1) If the conditions of Subsection (2) are met, an irrigation company, canal
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company, ditch company, reservoir company, or water users' association [hereafter] organized
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under the laws of this state [shall have the power to] may make assessments against its shares of
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stock on other than a pro rata basis:
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(a) for the purpose of raising funds to accomplish the [purpose or] one or more purposes
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for which the company or association is organized; or
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(b) to pay [its] the company's or association's debts or obligations [when].
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(2) A company or association described in Subsection (1) may make assessments against
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its shares of stock on other than a pro rata basis if:
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(a) at the time of the assessments, the articles of incorporation [so] permit[.] assessments
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on other than a pro rata basis;
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(b) [The provisions of this section shall also apply to any irrigation company, canal
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company, ditch company, reservoir company or water users' association heretofore organized the
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articles of incorporation of which now expressly so permit assessments to be made on other than
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a pro rata basis or to any irrigation company, canal company, ditch company, reservoir company,
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or water users' association heretofore or hereafter organized when] the company or association is
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required to make assessments on other than a pro rata basis under [existing or future] a contract
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[or contracts] between:
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(i) (A) the United States; and [any such]
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(B) the company or [water users'] association [or between];
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(ii) (A) the United States; and
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(B) the stockholders of [any such] the company or [water users'] association; or [between
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any such]
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(iii) (A) the company or [water users'] association; and [its]
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(B) the stockholders [or when] of the company or association;
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(c) required by [any] a contract of subscription for shares of stock to [any such] the
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company or [water users'] association [so] contracting with the United States; or [under present
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or future]
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(d) required by the laws or regulations of the United States.
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Section 4.
Section
16-6-19
is amended to read:
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16-6-19. Definitions.
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As used in this chapter:
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(1) "Articles of incorporation" means the original articles of incorporation and all
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amendments to them, including any articles of merger.
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(2) "Bylaws" means the rules adopted for the regulation or management of the affairs of
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the corporation irrespective of the names by which the rules are designated.
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(3) "Cooperative association" means a corporation organized or existing under this chapter
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subject to Section
16-6-108
.
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(4) "Corporation" or "domestic corporation" means a nonprofit corporation subject to the
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provisions of this chapter, except a foreign corporation.
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(5) "Division" means the Division of Corporations and Commercial Code.
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(6) "Filed" means the division has received and approved as to form a document submitted
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under the provisions of this chapter, and has marked on the face of the document a stamp or seal
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indicating the time of day and date of approval, the name of the division, the division director's
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signature and division seal, or facsimiles of the signature or seal.
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(7) "Foreign corporation" means a nonprofit corporation organized under the laws of a
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state, territory, or country other than Utah.
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(8) "Governing board" means the group of persons vested with the management of the
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affairs of the corporation irrespective of the name by which the group is designated.
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(9) "Insolvent" means inability of a corporation to pay its debts as they become due in the
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usual course of its affairs.
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(10) "Member" means one having membership rights in a corporation in accordance with
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its articles of incorporation or bylaws.
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(11) "Nonprofit corporation" means a corporation which does not distribute any part of its
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income to its members, trustees, or officers, and includes a nonprofit cooperative association.
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(12) "State agency" means any of the following of the state:
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(a) a department;
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(b) a commission;
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(c) a board;
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(d) a council;
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(e) an agency;
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(f) an institution;
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(g) an officer;
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(h) a corporation;
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(i) a fund;
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(j) a division;
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(k) an office;
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(l) a committee;
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(m) an authority;
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(n) a laboratory;
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(o) a library;
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(p) a unit;
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(q) a bureau;
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(r) a panel; or
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(s) an administrative unit.
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[(12)] (13) "Trustee" means one of the group of persons on the governing board
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irrespective of the name by which the person is designated.
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Section 5.
Section
16-6-30
is amended to read:
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16-6-30. Voting -- Rights of members.
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(1) (a) The right of the members, or any class or classes of members, to vote may be
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limited, enlarged or denied to the extent specified in the articles of incorporation or the bylaws.
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(b) Unless [so] limited, enlarged, or denied in accordance with Subsection (1)(a), each
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member, regardless of class, shall be entitled to one vote on each matter submitted to a vote of
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members.
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(c) Notwithstanding Subsection (1)(a) or (b), if a state agency is a member of a nonprofit
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corporation that has as one of its primary purposes the delivery of water to its members, the state
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agency shall have no voting rights unless the articles of incorporation or the bylaws of the
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nonprofit corporation specifically provide that the state agency has voting rights.
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(2) (a) A member may vote:
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(i) in person; or[,]
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(ii) unless the articles of incorporation or the bylaws otherwise provide, [may vote] by
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proxy executed in writing by the member or by [his] the member's duly authorized attorney in fact.
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[Where]
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(b) If trustees or officers are to be elected by members, the governing board by resolution
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or the bylaws may provide that such elections may be conducted by mail.
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Section 6.
Section
31A-5-101
is amended to read:
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31A-5-101. Definitions.
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In this chapter, unless the context requires otherwise:
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(1) The definitions applicable to the Utah Revised Business Corporation Act in
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Subsections
16-10a-102
(2), (22), and (23) apply to stock corporations.
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(2) The definitions applicable to nonprofit corporations in Subsections
16-6-19
(1), (2), (8),
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(10), and [(12)] (13) apply to mutuals.
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(3) "Promoter securities" are securities issued by a stock insurer to the incorporators,
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directors, officers, or their families or nominees at any time prior to, and up to one year following,
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the issuance of a certificate of authority to the stock insurer.
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Section 7.
Section
31A-9-101
is amended to read:
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31A-9-101. Definitions.
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(1) As used in this chapter:
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(a) "Fraternal" or "fraternal benefit society" means a corporation organized or operating
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under this chapter that:
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(i) has no capital stock;
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(ii) exists solely for:
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(A) the benefit of its members and their beneficiaries; and
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(B) any lawful social, intellectual, educational, charitable, benevolent, moral, fraternal,
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patriotic, or religious purpose for the benefit of its members or the public, carried on through
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voluntary activity of its members in their local lodges or through institutional programs of the
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fraternal or its local lodges;
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(iii) has a lodge system;
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(iv) has a representative form of government; and
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(v) provides insurance benefits authorized under this chapter.
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(b) "Laws of a fraternal" include its articles of incorporation and bylaws, however
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designated.
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(c) "Lodge system" means one in which:
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(i) there is a supreme governing body;
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(ii) subordinate to the supreme governing body are local lodges, however designated, into
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which natural persons are admitted as members in accordance with the laws of the fraternal;
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(iii) the local lodges are required by the laws of the fraternal to hold regular meetings at
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least monthly; and
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(iv) the local lodges regularly engage in programs involving member participation to
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implement the purposes of Subsection (1)(a)(ii).
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(d) "Representative form of government" means the fraternal complies with Section
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31A-9-403
.
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(2) In any provisions of law made applicable to fraternals by this chapter, the technical
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terms used in those provisions are applicable to fraternals despite the use of other parallel terms
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by fraternals.
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(3) The definitions provided in Subsections
16-6-19
(1), (2), (8), (10), and [(12)] (13), and
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Section
31A-1-301
apply to fraternals.
Legislative Review Note
as of 1-3-00 2:05 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.