Utah Department of Commerce

Utah Department of Commerce

2018 Annual Report

Administration ? Office of Consumer Services ? Consumer Protection Corporations & Commercial Code ? Occupational & Professional Licensing Office of the Property Rights Ombudsman ? Public Utilities ? Real Estate ? Securities

Utah Department of Commerce

OUR MISSION

To protect the public interest by ensuring fair commercial and professional practices.

Message from Governor Gary R. Herbert

OUR VISION

The Department of Commerce contributes to the success of Utah businesses, professionals and consumers by creating a favorable economic environment.

TABLE OF CONTENTS

1 Governor's Statement /

Executive Director's Statement

2Department of Commerce

Cornerstones | 2018

Division Reports

4 Administration

7 Office of Consumer

Services

10 Consumer Protection

14 Corporations &

Commercial Code

20 Occupational &

Professional Licensing

26 Office of the Property

Rights Ombudsman

28 Public Utilities

32 Real Estate

38 Securities

42 Web Trends

47 Financial Summary

Dear Reader,

It is my plDeaesaurreRteoaidnetrro,duce the 2018 annual report for the Utah Department of Commerce. The regulation and licensing services, provided by tIhteiseimghyt pdilveiassiounrsewtoithinintrtohdeuDceeptahrtem2e0n1t 8 of Commerce, actaivnenluyasleerkepthoertbfeostritnhteerUesttaohf UDteaphanrst.mByent of providing users frCieonmdlmy seerrcveic. eTshbeortheginulpaetrisoonn anddolincleinnes,ing issuing licenses toseprrvoifceesssi,opnraolsvaidcreodssbhyunthdereedisgohftidndivuisstiroienss, and by protectingwthiethriinghtthseofDceopnasurtmmeersn,tthoef dCeodmicamteedrce, employees at the aUcttaihveDlyepsaeretmketnhteobf eCsotminmteerrceesthoavf eUetaarhnneds. tmheosttrutrsutsotefdoustrarteeBssiydfoeprnrtcsoovbnydiduhicentligpnigungbseutrossinmferasikseenindUtlthyaehsneoarntvieoiocnef. sthbeoth

in person and online, issuing licenses to Utah remapinroedfetshseio#n1aBlsesatcSrtoastse hfournEdmrpeldosymofeinntdinu2st0r1ie8s, by U.S. News andaWndorbldy Rperpootertcatinndgrothsee troigthhets#2ofspcootnisnuBmeesrt s, State for Businessthbey dFeodrbiceas.teTdheemeffpolrotsyeaneds aintitihaetivUetsaohf Utah's DepartmenDteopfaCrotmmmenetrcoefhCeolpmtommerackee hUatavhe aeatrrunseteddthe state for conductitnrgubsut soifneosus.r residents by helping to make

Utah one of the most trusted states for conducting business in the nation. As Utah's economic climate continues to evolve, I am confident in our Department of Commerce, which striUvetsahforeinmnaoivnaetidvethwea#y1s tBoeasdtaSpttaatnedfomreEetmthpelonyeemdsenotf ionur2c0h1a8nbgyingU.S. News population. and World Report and rose to the #2 spot in Best State for Business by Forbes.

The efforts and initiatives of Utah's Department of Commerce help to make Utah a trusted state for conducting buSsiinnceesrse.ly,

As Utah's economic climate continues to evolve, I am confident in our Department of Commerce, which strives for innovative ways to adapt and meet the needs of our changing populGataiorynR. . Herbert

Governor Sincerely,

Gary R. Herbert Governor

2018 Annual Report

Message from Francine A. Giani, Executive Director

Utah Department of Commerce

SDteaptearotmfSDUteeantptateahorotfmfCUeontmathomfeCrcoemmerce GARY R. HERBESRTtate of Utah

GARY R. HERBERTGovernor

Department of Commerce LGSieAPuERteNYGnCoaRvnE.etRHrGnEJoo.RvrCBeLOrSEinePXRouETrteNnCanEtRGJo.vCeOrnFEXoRxreAcuNtCivIeNDEirAec. tGFEoRxrIAeAcNuNtICivIeNDEirAec. tGoDTrIHAepONuMItyADSirAec.toBrRDTAHeDpOuYMtyADSirAec.toBrRADY Governor

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2018 Annual Report 1

UTAH DEPARTMENT OF COMMERCE

Cornerstones 2018

ADMINISTRATION

Education: Commerce supports ongoing goals to educate the public and licensees on agency services to support a positive and robust business environment in Utah. Energy: The Department of Commerce replaced three fleet fuel midsize vehicles with hybrid vehicles in concert with directives from the Governor's office to improve Utah air quality. Jobs: The Department of Commerce aims to control business costs through fiscal responsibility by keeping license fees stable to encourage business growth across all licensing Divisions.

OFFICE OF CONSUMER SERVICES 2018

Energy: The OCS actively participated in negotiations that resulted in a widely supported settlement of the net metering issues, approved by the Public Service Commission in early FY 2018. As part of this settlement implementation, the OCS hosted a series of meetings evaluating solar options for low-income customers and spearheaded the development of a website designed to provide customers unbiased information about net metering rate changes and resources to evaluate investing in rooftop solar. (rooftopsolar.)

DIVISION OF CONSUMER PROTECTION

Jobs: By continuing to monitor business compliance with the Consumer Sales Practices Act and other statutes, the Division helps achieve a more level playing field for companies that deal fairly with consumers.

Education: As described previously, the Division presents in various settings to educate consumers and businesses. The Division also issues media releases about issues impacting Utah consumers.

Energy: The Division uses hybrid vehicles, which supports the Governor's efforts to improve air quality. The Division also administers the new Residential Solar Energy Disclosure Act.

Self-Determination: The Division continues to regulate immigration consultants to ensure that immigration consultants lawfully assist consumers.

DIVISION OF CORPORATIONS

Jobs: The Division of Corporations and Commercial Code encourages entrepreneurs, business owners, and commerce by educating the public through accurate, courteous, and timely customer service and through the efficient processing of business filings.

Education: The Division's Help Center and Service Center staff work diligently to educate the public by answering questions regarding business registration through fielding thousands of telephone calls, and responding to live online chats as well as assisting walk-in customers.

Energy: The Division's electronic filing resources including Online UCC filing, One Stop Business Registration, Online Annual Business Renewal, and Online DBA Registration, reduce the dependence on paper filings by customers and the amount of paper the Division uses.

DIVISION OF OCCUPATIONAL AND PROFESSIONAL LICENSING (DOPL)

Education: With the passage of House Bill 127, DOPL has hired an Academic Detailing Specialist to provide education to opioid prescribers. Education will be offered to all prescribers who have a pattern of prescribing opioids not in accordance with CDC Clinical Guidelines for Prescribing Opioids for Chronic Pain or the Utah Clinical Guidelines on Prescribing Opioids for Treatment of Pain. The education will also be available to all interested controlled substance prescribers.

Jobs: Continuing the Governor's charge to empower the private sector by implementing regulation that encourages stability while minimizing interference, the Division has focused on several changes to enhance commerce while promoting the health, safety and welfare of the citizens of Utah.

2 2018 Annual Report

Cornerstones

License portability has been a major focus for the Division over the last year, with major changes being implemented. The Division's existing military resources were expanded to make the transition for the members of our armed forces even more user friendly. In addition to the existing exemption granted to military spouses, the ability for our active duty troops to apply for fee waivers at both initial licensure and renewal was implemented. Division staff has also joined forces with Utah Department of Veterans and Military Affairs to help connect our military families with additional services. Additionally, a change was made to the Division's endorsement requirements that opens additional pathways for residents of the state to obtain licensure when they have been licensed in other recognized jurisdictions. Each of these changes have increased license portability, which helps get Utahn's working faster in their chosen career paths.

DOPL focused on sending out email reminder notices for renewal prior to the 60 day requirement. This has helped all licensees by allowing them to renew and continue to work without worry of the status of their license. It has had a larger impact on some of the medical professions where the employers may require the licensees to be renewed prior to the expiration of their license for scheduling purposes.

Self-Determination: The Division has focused on reducing unnecessary regulation where possible. Several licensing regulations were modified to reduce arbitrary requirements:

? an automatic 5 year ban on nurses with certain criminal

offenses was eliminated;

? mental health intern licenses were modified to allow for an

extension when clinical hours could not be completed within the standard three years;

? requirement that practitioners complete a burdensome and

redundant CSD quiz at each renewal was eliminated.

In an effort to enhance our customer's experience, the Division has also focused heavily on its online services. This summer, the Division launched a new website, making our online presence more user friendly. The Division also continued its quest to make many services available online by continuing to add new applications to our web portal, as well as making smaller services such as duplicate license requests available as an online transaction.

OFFICE OF PROPERTY RIGHTS OMBUDSMAN

Education: The attorneys in the Office provide numerous training sessions for various local agencies and associations throughout Utah. One of many is the co-creation and implementation of the Land Use Academy of Utah, which provides internet-accessible training for local government officials in urban and rural areas.

Energy: The Office helps ensure that energy and infrastructure costs stay low by providing dispute resolution services to citizens when they have disputes with public

facilities. Entities that provide public services such as UDOT, Rocky Mountain Power, Dominion Energy, and various local and state government departments frequently benefit by avoiding litigation, saving customer dollars.

Jobs: The Office assists local governments and developers to manage and encourage thoughtful and healthy growth in our state, helping ensure that economic development throughout Utah remains steady and robust.

Self-Determination: The Attorneys at the Office worked closely with legislators, lobbyists, and other stakeholders to ensure laws passed will protect the property rights of citizens.

DIVISION OF PUBLIC UTILITIES

Energy: The Division of Public Utilities helps ensure Utahns' access to safe, adequate, and reliable energy at reasonable rates. In Fiscal Year 2018, the Division worked with Rocky Mountain Power and Questar Gas and interested parties on numerous matters to preserve Utah's advantageous utility rates and reliable service. The Division continues work to establish better solar generation rates. Furthermore, Division activities helped ensure the safety of Utah's intrastate natural gas infrastructure, including an aggressive replacement program for aging or vulnerable pipelines.

DIVISION OF REAL ESTATE

Education: The Division publishes a quarterly newsletter educating licensees on current issues and trends. In addition, Division representatives spoke at nineteen different events in an effort to educate licensees on trends and changes to regulation as well as answer specific questions practitioners have about their respective industries.

Jobs: The Division continues to maintain quicker license processing times helping new applicants begin their careers in the real estate, mortgage, and appraisal industries.

Energy: The Division accepts new applications online and over 95% of all licensees renew their license online. All license renewal reminders are sent via email. These systems make it easier to apply for and renew a license as well as reduce the amount of paper the Division uses.

DIVISION OF SECURITIES

Education: Division representatives spoke at seventy different events in an effort to educate the public on financial literacy, answer specific questions about financial planning, and how to protect their nest egg from scams.

Jobs: The Division of Securities actively seeks to identify investment offerings that are fraudulent or otherwise fail to comply with the law's requirements. Enforcement is a key component in promoting legitimate capital markets and promoting business and job growth in Utah by preventing the loss of investor monies to fraudulent schemes.

2018 Annual Report 3

Utah Department of Commerce

UTAH DEPARTMENT OF COMMERCE

Administration

INTERNAL EFFICIENCIES

The Department of Commerce is continually looking for ways to increase operating efficiency and has implemented new programs to lower costs. The following are measures taken during the fiscal year 20172018. Additional cost savings are included in each Division's report.

UTAH DEPARTMENT OF COMMERCE AGENCY BUDGET HIGHLIGHTS FY 2018

? Retrofitted the entire department telephony system with Voice

Over IP to minimize ongoing phone service expenses.

? Replaced three fleet fuel midsize vehicles with hybrid vehicles in concert with directives

from the governor's office to improve air quality.

? Through efficiency in success initiative process improvement reached the 59%

benchmark during 2018 since its inception.

? General Travel expenditures for FY 2018 totaled less than .5% of the Commerce Service

Budget, due to ongoing heightened scrutiny of travel authorizations.

Annual Operating Expences by Category 2018

2

1 n Personal Wages/Benefits . . . . $ 18,808,189

79%

3

2 n IT Systems/Support . . . . . . . . .

1,620,645

7

1

4

3 n Office Current Expenses . . . . .

3,232,157

14

4 n Travel . . . . . . . . . . . . . . . . . . . . . .

115,032

>1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,776,023 100%

SERVING THE PUBLIC

Commerce Administration oversees the following programs and procedures:

? ? Office of the Property Rights Ombudsman

Powersport Vehicle Franchise Act

? New Automobile Franchise Act

? Agency Review of Administrative Actions

NEW AUTOMOBILE FRANCHISE ACT AND POWERSPORT VEHICLE FRANCHISE ACT

Registrations: NAFA: 129 PVFA: 48

The New Automobile Franchise Act (NAFA) and the Powersport Vehicle Franchise Act (PVFA) protect the public interest by helping ensure fair business practices between vehicle franchisors and franchisees. The Acts establish a standard of conduct and clarify

4 2018 Annual Report

MISSION STATEMENT:

Administration's mission is to provide administrative

support (financial, human resources, information

technology, public relations, and adjudicative)

to the following Divisions within the Department of Commerce:

Office of Consumer Services (OCS) Division of Consumer Protection (DCP) Division of Corporations and Uniform Commercial Code (CORP) Division of Occupational and Professional Licensing (DOPL)

Division of Public Utilities (DPU) Division of Real Estate (DRE) Division of Securities (DS)

Filed Closed Filed Closed Filed Closed

the duties of a franchisor (generally a manufacturer) and a franchisee (a dealer). In addition, they establish a right to notice and hearing for franchisees with regards to a franchisor's intent to terminate, relocate, or establish a new franchised dealership. Franchisors and franchisees must pay an annual registration fee to cover the cost of adjudication.

Franchise Cases Adjudicated

FY 2016

Motor Vehicle . . . . . . . . 1 1

Powersport Vehicle . . . . . . . . 1 1

FY 2017

1 1 0 0

FY 2018

1 1 0 0

ADMINISTRATIVE ACTIONS

A business registrant or licensee, having been adversely impacted by a Department of Commerce Division action, may request agency review by the Executive Director. Upon review, the decision could be upheld, reversed, modified, or remanded to the Division for further consideration.

2018 Agency Review Statistics Total

DCP

CORP

DOPL

DRE

DS

Filed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

6

0

26

2

2

Closed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

5

0

26

1

3

Affirmed . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

2

0

10

0

2

Remanded . . . . . . . . . . . . . . . . . . . . . . . . . 6

0

0

5

0

1

Dismissed . . . . . . . . . . . . . . . . . . . . . . . . . . 14

2

0

11

1

0

Reversed . . . . . . . . . . . . . . . . . . . . . . . . . . . 0

0

0

0

0

0

Modified . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1

0

0

0

0

PUBLIC OUTREACH

Administration participated in media interviews, created and aired public service announcements throughout the state through local television as well as presenting at several Utah events to educate the public about consumer fraud awareness topics.

2018 Annual Report 5

Utah Department of Commerce

Administration

UTAH CONSUMER FRAUD AND BUSINESS SYMPOSIUM

The Federal Trade Commission and the Utah Department of Commerce hosted a Utah Consumer Fraud and Business Symposium on September 20, 2018. The partnership conference provided participants with the opportunity to share experiences and challenges, make professional connections, and discuss how groups can better collaborate in protecting consumers against fraud. The Symposium's keynote speaker was Ted Stewart, Senior United States District Court Judge, United States District Court for the District of Utah, who was joined by fellow presenters; Lois Greisman. Associate Director, Division of Marketing Practices, Federal Trade Commission, Todd Weiler, Utah State Senator, James Dunnigan, Utah State Representative and Mike Headrick, KSL TV Anchor/Reporter.

The Symposium included panel discussions highlighting topics such as; Combating Frauds Affecting Utah Consumers and Businesses, Streamlining Government Regulations, and Keeping Utah Safe / Consumer Protection. Panel members included speakers from the Utah Department of Commerce, Federal Trade Commission, Federal Bureau of Investigation, Utah Attorney General's Office, United States Attorney's Office for the District of Utah, Utah Division of Consumer Protection, Utah Division of Occupational and Professional Licensing, Utah Division of Securities, Institute for Justice, and AARP, among others. The free Salt Lake City event saw 400 attendees and provided Continuing Legal Education (CLE) training as well as targeted investigator sessions.

6 2018 Annual Report

DECLUTTER DAY 2018

On April 27, 2018 the Utah Department of Commerce hosted its fifth annual "Declutter Day" free public event. Commerce employees partnered with Big Brothers Big Sisters of Utah, MeTech electronic recycling, Columbus Secure Shred and the University of Utah Police Department for the daylong community program. The public was invited to drop off documents for secure shredding, recycle old electronics/computers, recycle expired medication, and donate clothing to charitable causes. Declutter Day 2018 resulted in shredding 9.3 tons of documents, 11.5 tons of electronic waste, 1 tons of clothing and 170 pounds of expired medications were collected for safe disposal. This collaborative effort between state and local organizations provided an overwhelming benefit to members of the Utah public who were able to dispose of clutter without the risk of being exposed to fraud or other deceptive practices. At the same time, the citizens were able to turn in prescription drugs and support a "Green" effort to recycle household clutter.

QUESTIONS specific to the Department of Commerce Administration may be directed to:

Francine A. Giani, Executive Director 801.530.6431 ? fgiani@

2018 Annual Report 7

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