Gov. Mike Leavitt's veto pen has killed a bill that was intended to protect the public from shady business practices.
But even the bill's sponsor, Rep. Beverly Evans, R-Altamont, said the measure could have caused significant problems for legitimate businesses and needs further study.Scott Reed of the state attorney general's office said HB325 would have affected anyone who wanted to start a business and call it by something other than his or her own name.
It would make that person publish an ad three times in a newspaper listing his name and address, the new business name, the purpose of the business and his involvement in other businesses during the previous five years. Reed said proof of that publication would have been required before a business license would be granted.
Reed said the bill would have helped the AG's office track down criminals who try to use legitimate businesses to launder money. It also would protect consumers from people who close a troubled business, leaving no way for creditors or wronged customers to track them down, then start up a similar operation under a different name.
"Consumers were getting stuck, and creditors especially were getting stuck, by businesses that failed," he said.
Reed said home- and Internet-based businesses, in particular, have been problematic in this way.
"You have absolutely no idea who you are doing business with and no way of checking unless there's some data pool that you can refer to," he said. "That's what this would clear up."
But Ken Allen, legal counsel for the Utah Division of Corporations, said the new rules were un-nec-es-sary.
"You can find that information right now in the databases that we have," Allen said. "(HB325) would just increase the cost of getting into business, and the idea is to promote business, not hinder it."
Allen said he thinks the attorney general's office and Evans have some legitimate concerns, but HB325 was not the way to address them.
Keith Pope, a corporate attorney with Kruse, Landa and May-cock in Salt Lake City, agreed.
Cautious consumers already could gain the same information by calling the Division of Corporations or the Better Business Bureau, he said. And the bill's "inexact" drafting would have caused headaches for people trying to start or buy companies.
"I think that there ought to be some laws about these direct marketers and high-pressure sales tactics," Pope said. "I just don't see how this does it. And the problems it creates more than offset what small benefits might (result)."
But Kevin Ashby, president of the Utah Press Association, which supported the bill, said he was surprised at the governor's action.
Ashby said the bill had overwhelming support - passing 69-0 in the House and 27-0 in the Senate - and he wishes Leavitt would have explained his veto more thoroughly.
"I can't figure out why the governor would think this is a bad piece of legislation," he said.
Evans said she worked the bill through the Legislature after she was erroneously informed that the Utah State Bar Association and Division of Corporations were comfortable with it. She later dis-cov-ered the miscommunication, she said, so she did not have a problem with the governor's Tuesday veto.
"It could create some uncomfortable business climates the way it is drafted," Evans said. "I don't want to pose any kind of extra burden on any business. . . . We're going to put it into interim and try to work out where we're at."
Leavitt's letter said he has committed to considering the bill again in a different form "that addresses the true concern to protect the pub-lic while not creating problems for legitimate businesses."