Perhaps not surprisingly in the political environment now existing, the Utah Legislature’s general session that came to its end on March 6 saw 1,051 bills filed for consideration. By the time the final gavels pounded, only 541 of them passed. Several involved issues related to business, so here’s a recap of those.
GOEO vs. GOED
The Governor’s Office of Economic Opportunity will revert to its old name, the Governor’s Office of Economic Development, under provisions of HB475. Sponsored by Rep. Calvin Roberts, R-Draper, the legislation also will create the Economic Development Council to coordinate economic development efforts in the state.
The GOEO name change will align Utah with other states, most of which incorporate “economic development” in their respective agency names. The Utah office was known as GOED between 2005 to 2021.
The Economic Development Council aims to unify and coordinate economic development projects that have regional or statewide impact and will provide a written report annually to the Legislature’s Economic Development and Workforce Services Interim Committee.
NONCOMPETES
HB203, a bill that would have altered the use of noncompete agreements between companies and employees, did not make it through the legislative process. Testimony indicated that the bill would have affected 95 percent of Utah workers. It was advanced by a House committee and its sponsor, Rep. Tyler Clancy, R-Provo, had vowed to work with stakeholders to refine the bill. But no vote was taken by the full House, which sent it to the House Rules Committee.
The matter could be discussed in the legislative interim period. Representatives of BioUtah and the Utah Chamber were among those at the committee hearing to call for interim-period study of the bill.
HB203 would have prohibited employers from enforcing a noncompete agreement (NCA) for employees earning less than $155,000, independent contractors, students, interns, workers under age 18, nonexempt (low-income workers) and workers laid off by their company without getting severance. It would have required upfront disclosure of NCAs during a job offer, and it provided a right of action for unlawful NCAs. The bill would not have affected non-solicitation, nondisclosure, confidentiality or training repayment agreements.
The sponsor and other proponents contended that NCA use had become too broad and, in some cases, harmful to employees. Some said it unnecessarily limited employee mobility or their ability to start their own companies.
DATA CENTERS
Data centers over 10,000 square feet in size will be required to annually report to the state their water usage, projected future water use and their efforts to reduce water consumption. The state Division of Water Rights will report nonproprietary information at its public website.
HB76, sponsored by Rep. Jill Koford, R-Ogden, passed through both chambers during the session. Koford said Utah needed to be “smart” about water and that some data centers used millions of gallons each month. Koford and others also noted that many data centers are incorporating technologies to reduce their water use.
TAXES
For the sixth straight year, lawmakers cut the state’s income tax rate from 4.5 percent to 4.45 percent by SB60. The difference in ongoing funding is about $110 million for the state’s $31.6 billion budget. But HB337 raises taxes on tobacco products, including nicotine pouches, and raised taxes on social media companies that use targeted advertising. Those two additional taxes are projected to bring a little over $32 million. The social media tax revenues are meant to be used on child literacy and youth recreation programs, as well as an ad campaign discussing the adverse effects of social media advertising targeting individuals and families.
Of course, there were many other issues addressed by lawmakers that could inadvertently affect businesses, including regulating new industries, particularly those involving artificial intelligence. Actor Joseph Gordon-Levitt even appeared before one committee to discuss the need for stronger protection plans for children. Lawmakers ultimately failed to approve it, citing fear that overregulation could slow innovation for businesses.