"When we do heavy lifting, when we consider important policy, there's a process here. It might feel like drinking out of a fire hydrant, but it certainly is a deliberative one," he said. "Having a bill that is filed and brought to the (Senate) floor on the Friday before the end of the session and having a bill land on our laps on Day 43 has put many on an uphill battle in terms of trying to get their heads around this bill and this policy."

Rep. Michael Noel, R-Kanab, said the Legislature may have acted too quickly in passing the special session bill. "And I'm wondering if we're not acting hastily now. That concerns me. ... I just wonder if we're not just moving too rapidly on this," Noel said.

But Urquhart said the state is in "grave danger" of having a permanent injunction filed against it.

"If that were to happen, that could limit our ability as a legislative body to go back and deal with this in a comprehensive way, in any kind of way," he said. "We need to repeal this law. We need to go back to scratch. I agree, this was hastily passed, but the writing is on the wall. ... This is something from a legal standpoint, we have a law that is not defensible, and if we go forward, we could find ourselves in a very bad way on this."

Last year's bill was prompted by Salt Lake-based online closeout retailer Overstock.com, which has said it has been a target of persistent naked short selling. Overstock officials this week were reported saying they believe Utah would prevail in the lawsuit and that SB277 was a mistake.

Without referring to Overstock, Urquhart told the House that "one of our great Utah companies" did not want the special-session law repealed. "In no way do I intend this to be a poke at them. ... The bill we passed (in May) just goes too far. ... By pursuing with the lawsuit, we could get ourselves in really big trouble."

Bramble said Friday that if the SEC does not address the issue of illegal naked short selling, the Legislature could be back with another bill next year.

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E-mail: bwallace@desnews.com