11-13-607. Limitations of liability for directors and officers.
(1)
A director or an officer of a taxed interlocal entity or a segment is not liable to the taxed interlocal entity, the segment, a member of the taxed interlocal entity, a member of the segment, a conservator, receiver, or successor-in-interest of the taxed interlocal entity, or a conservator, receiver, or successor-in-interest of the segment for any action or failure to act as a director or an officer, unless:
Terms Used In Utah Code 11-13-607
Associated entity: means a taxed interlocal entity that adopts a segment's organizing resolution. See Utah Code 11-13-602
Contract: A legal written agreement that becomes binding when signed.
Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
Fiduciary: A trustee, executor, or administrator.
Fiduciary duty: means a duty expressly designated as a fiduciary duty of:
(a)
a director or an officer of a taxed interlocal entity in:
(i)
the organization agreement of the taxed interlocal entity; or
(ii)
an agreement executed by the director or the officer and the taxed interlocal entity; or
(b)
a director or an officer of a segment in:
(i)
the organizing resolution of the segment; or
(ii)
an agreement executed by the director or the officer and the segment. See Utah Code 11-13-602
Interlocal entity: means :
(a)
a Utah interlocal entity, an electric interlocal entity, or an energy services interlocal entity; or
is not exempt from a tax or fee in lieu of taxes imposed in accordance with 3;
(ii)
does not receive a payment of funds from a federal agency or office, state agency or office, political subdivision, or other public agency or office other than:
(A)
a payment that does not materially exceed the greater of the fair market value and the cost of a service provided or property conveyed by the project entity; or
(B)
a grant that is subject to accountability requirements and that the project entity receives for purposes related to a Utah interlocal energy hub, including research and development of technology, financing, construction, installation, operation, and other actions that the project entity may take with respect to a project; and
(iii)
does not receive, expend, or have the authority to compel payment from tax revenue; or
(b)
an interlocal entity that:
(i)
was created before 1981 for the purpose of providing power supply at wholesale to its members;
(ii)
does not receive a payment of funds from a federal agency or office, state agency or office, political subdivision, or other public agency or office other than:
(A)
a payment that does not materially exceed the greater of the fair market value and the cost of a service provided or property conveyed by the interlocal entity; or
(B)
a loan, grant, guaranty, transferable tax credit, cost-sharing arrangement, or other funding arrangement for an advanced nuclear power facility, as defined in 26 U. See Utah Code 11-13-602
(a)
the director or the officer breaches a fiduciary duty that the director or the officer owes to the taxed interlocal entity, the segment, a member of the taxed interlocal entity, or a member of the segment; and
(b)
the breach described in Subsection (1)(a) constitutes gross negligence, willful misconduct, or intentional infliction of harm on the taxed interlocal entity, the segment, a member of the taxed interlocal entity, or a member of the segment.
(2)
(a)
Except as provided in Subsection (2)(b), a taxed interlocal entity or a segment may limit or eliminate the liability of a director or an officer described in Subsection (1) for monetary damages.
(b)
A taxed interlocal entity or a segment may not limit or eliminate liability of a director or an officer in accordance with Subsection (2)(a) for monetary damages arising out of:
(i)
a breach of a fiduciary duty;
(ii)
an intentional infliction of harm on the taxed interlocal entity, the segment, a member of the taxed interlocal entity, or a member of the segment;
(iii)
improper financial benefit; or
(iv)
willful misconduct that constitutes an intentional violation of criminal law.
(3)
The provisions of this section do not affect the liability of a director or an officer for an act or omission that occurred before May 10, 2016.
(4)
(a)
The duties owed by a director or an officer of a taxed interlocal entity or a segment consist of the following:
(i)
any fiduciary duty;
(ii)
any other duty specified in:
(A)
the organization agreement or bylaws of the taxed interlocal entity;
(B)
the organizing resolution or bylaws of the segment; or
(C)
any contract between the director or the officer and the taxed interlocal entity or the segment; and
Each fiduciary duty of a director or an officer of a segment shall be consistent with the fiduciary duties of a director or an officer of the segment’s associated entity.
(5)
(a)
Nothing in this section nor any action taken by a taxed interlocal entity, a segment, a director or an officer of a taxed interlocal entity, or a director or an officer of a segment constitutes a waiver of any immunity or defense available under Title 63G, Chapter 7, Governmental Immunity Act of Utah.
(b)
Subsections (1)(a) and (b) and (2)(b) apply only to the extent that the taxed interlocal entity, the segment, the director or the officer of the taxed interlocal entity, or the director or the officer of the segment is subject to liability under Title 63G, Chapter 7, Governmental Immunity Act of Utah.
