11-13a - Governmental Nonprofit Corporations Act

Title 11 > 11-13a

Sections (6)

11-13a-101 - Title.

This chapter is known as the “Governmental Nonprofit Corporations Act.”

11-13a-102 - Definitions.

As used in this chapter: 11-13a-102(1) “Controlling interest” means that one or more governmental entities collectively represent a majority of the board’s voting power as outlined in the nonprofit corporation’s governing documents. 11-13a-102(2) “Governing board” means the body that governs a governmental nonprofit corporation.”Governing board” includes a board of directors. 11-13a-102(3) “Governmental entity” means the state, a county, a municipality, a special district, a special service district, a school district, an institution of higher education, as defined in Section 53H-1-101, or any other political subdivision or administrative unit of the state. 11-13a-102(4) “Governmental nonprofit corporation” means:a nonprofit corporation that is wholly owned or wholly controlled by one or more governmental entities, unless the nonprofit corporation receives no operating funding or other financial support from any governmental entity; ora nonprofit corporation in which one or more governmental entities exercise a controlling interest and:that exercises taxing authority;that imposes a mandatory fee for association or participation with the nonprofit corporation where that association or participation is mandated by law; orthat receives a majority of the nonprofit corporation’s operating funding from one or more governmental entities under the nonprofit corporation’s governing documents, except where voluntary membership fees, dues, or assessments compose the operating funding.”Governmental nonprofit corporation” does not include:a water company, as that term is defined in Section 16-4-102, unless the water company is wholly owned by one or more governmental entities; orthe Utah Association of Special Districts. 11-13a-102(5) “Municipality” means a city or town.

11-13a-103 - Governance — Powers of governing body.

11-13a-103(1) A governing board shall manage and direct the business and affairs of a governmental nonprofit corporation. 11-13a-103(2) Each member of a governing board has and owes a fiduciary duty to the governmental nonprofit corporation. 11-13a-103(3) A governing board:

shall elect a chair from the members of the board; and subject to Subsection (4), may elect other officers as the board considers appropriate. 11-13a-103(4) One person may not hold, at the same time, the offices of chair and treasurer, chair and clerk, or treasurer and clerk. An officer serves at the pleasure of the governing board. The governing board may designate a set term for each office.

11-13a-104 - Quorum of the governing board — Meetings of the governing board.

11-13a-104(1) A majority of the governing board constitutes a quorum for the transaction of governing board business. Action by a majority of a quorum constitutes action of the governing board. 11-13a-104(2) The governing board shall hold regular and special meetings as the governing board determines at a location that the governing board determines. 11-13a-104(3) The governing board shall ensure that each meeting of the governing board complies with Title 52, Chapter 4, Open and Public Meetings Act. Subject to Title 52, Chapter 4, Open and Public Meetings Act, a governing board shall: adopt rules of order and procedure to govern a public meeting of the governing board; conduct a public meeting in accordance with the governing board’s rules of order and procedure; and make the governing board’s rules of order and procedure available to the public:

at each meeting of the governing board; and on the governmental nonprofit corporation’s public website, if available. 11-13a-104(4) The governing board shall comply with: Title 11, Chapter 13, Part 5, Fiscal Procedures for Interlocal Entities; andTitle 63G, Chapter 2, Government Records Access and Management Act.

11-13a-105 - Registration as a limited purpose entity.

11-13a-105(1) Each governmental nonprofit corporation shall register and maintain the governmental nonprofit corporation’s registration as a limited purpose entity, in accordance with Section 67-1a-15. 11-13a-105(2) A governmental nonprofit corporation that fails to comply with Subsection (1) or Section 67-1a-15 is subject to enforcement by the state auditor, in accordance with Section 67-3-1.

11-13a-106 - Training for board members.

11-13a-106(1) Each member of a board of directors of a governmental nonprofit corporation shall complete the training described in Subsection (2)(a):

within six months after the day on which the member becomes a board member; or for a member already in the position of board member on May 14, 2019, before November 14, 2019. If a board member fails to complete the training described in Subsection (2)(a) within the time period specified in Subsection (1)(a)(i):

the state auditor shall issue a notice of noncompliance to the board member and the relevant board of directors; and if the board member fails to complete the training described in Subsection (2)(a) within 30 calendar days after the date of the auditor’s notice of noncompliance, the board member is disqualified and may not act as a board member. For the purposes of Subsection (1)(a), a member of a board of directors of a governmental nonprofit corporation takes office each time the member is elected or appointed to a new term. 11-13a-106(2) The state auditor shall:

develop a training or other informational resource to aid a governmental nonprofit corporation in implementing best practices for financial controls and board governance; provide the training or other informational resource described in Subsection (2)(a) to each of the following entities that provides any required budgeting, expenditure, or financial report to the state auditor: a governmental nonprofit corporation; and a state agency or political subdivision of the state that wholly controls or has a controlling interest in a governmental nonprofit corporation, as described in Section 11-13a-102; ensure that the training described in Subsection (2)(a) complies with Title 63G, Chapter 22, State Training and Certification Requirements; and issue a certificate of completion to each board member that completes the training described in Subsection (2)(a).