19-3-318 - No limitation of liability regarding businesses involved in high level radioactive waste.
19-3-318. No limitation of liability regarding businesses involved in high levelradioactive waste.
(1) As used in this section:
(a) "Controlling interest" means:
(i) the direct or indirect possession of the power to direct or cause the direction of themanagement and policies of an organization, whether through the ownership of voting interests,by contract, or otherwise; or
(ii) the direct or indirect possession of a 10% or greater equity interest in an organization.
(b) "Equity interest holder" means a shareholder, member, partner, limited partner, trustbeneficiary, or other person whose interest in an organization:
(i) is in the nature of an ownership interest;
(ii) entitles the person to participate in the profits and losses of the organization; or
(iii) is otherwise of a type generally considered to be an equity interest.
(c) "Organization" means a corporation, limited liability company, partnership, limitedpartnership, limited liability partnership, joint venture, consortium, association, trust, or otherentity formed to undertake an enterprise or activity, whether or not for profit.
(d) "Parent organization" means an organization with a controlling interest in anotherorganization.
(e) (i) "Subject activity" means:
(A) to arrange for or engage in the transportation or transfer of high level nuclear waste orgreater than class C radioactive waste to or from a storage facility in the state; or
(B) to arrange for or engage in the operation or maintenance of a storage facility or atransfer facility for that waste.
(ii) "Subject activity" does not include the transportation of high level nuclear waste orgreater than class C radioactive waste by a class I railroad that was doing business in the state asa common or contract carrier by rail prior to January 1, 1999.
(f) "Subsidiary organization" means an organization in which a parent organization has acontrolling interest.
(2) (a) The Legislature enacts this section because of the state's compelling interest in thetransportation, transfer, and storage of high level nuclear waste and greater than class Cradioactive waste in this state. Legislative intent supporting this section is further described inSection 19-3-302.
(b) Limited liability for equity interest holders is a privilege, not a right, under the lawand is meant to benefit the state and its citizens. An organization engaging in subject activitieshas significant potential to affect the health, welfare, or best interests of the state and should nothave limited liability for its equity interest holders. To shield equity interest holders from thedebts and obligations of an organization engaged in subject activities would have the effect ofattracting capital to enterprises whose goals are contrary to the state's interests.
(c) This section has the intent of revoking any and all statutory and common law grants oflimited liability for an equity interest holder of an organization that chooses to engage in a subjectactivity in this state.
(d) This section shall be interpreted liberally to allow the greatest possible lawfulrecourse against an equity interest holder of an organization engaged in a subject activity in thisstate for the debts and liabilities of that organization.
(e) This section does not reduce or affect any liability limitation otherwise granted to an
organization by Utah law if that organization is not engaged in a subject activity in this state.
(3) Notwithstanding any law to the contrary, if a domestic or foreign organizationengages in a subject activity in this state, no equity interest holder of that organization enjoys anyshield or limitation of liability for the acts, omissions, debts, and obligations of the organizationincurred in this state. Each equity interest holder of the organization is strictly and jointly andseverally liable for all these obligations.
(4) Notwithstanding any law to the contrary, each officer and director of an organizationengaged in a subject activity in this state is individually liable for the acts, omissions, debts, andobligations of the organization incurred in this state.
(5) (a) Notwithstanding any law to the contrary, if a subsidiary organization is engaged ina subject activity in this state, then each parent organization of the subsidiary is also considered tobe engaged in a subject activity in this state. Each parent organization's equity interest holdersand officers and directors are subject to this section to the same degree as the subsidiary's equityinterest holders and officers and directors.
(b) Subsection (5)(a) applies regardless of the number of parent organizations throughwhich the controlling interest passes in the relationship between the subsidiary and the ultimateparent organization that controls the subsidiary.
(6) This section does not excuse or modify the requirements imposed upon an applicantfor a license by Subsection 19-3-306(9).
Enacted by Chapter 190, 1999 General Session