Although Utah's thrift crisis is on the special session agenda, it's unlikely that lawmakers will come up with a final resolution to the problem Tuesday.
One indicator that no action will be taken is that as of late Friday, no bills had been filed regarding the thrift issue and lawmakers have no final settlement with depositors to work with.A state-appointed task force has recommended a way for thrift depositors to recover their lost savings, but neither Gov. Norm Bangerter nor depositors like it, and negotiations between both sides are continuing.
Furthermore, even if the Legislature passes a bill to return money to depositors, several additional approvals by the courts must take place in order for the law to take effect.
"That doesn't mean the Legislature can't act. But these things must be taken care of or else their action won't be final," said Gary Doxey of the state's office of Legislative Research and General Counsel.
So what can lawmakers accomplish Tuesday with regard to returning almost $70 million in lost savings to 15,000 Utahns?
"Very little," said Rep. Olene Walker, R-Salt Lake.
"We have empathy for the situation and recognize the frustration of depositors. But there is no way the Legislature can negotiate a settlement in a court case that is pending.
"It's my opinion that we'll just have to wait until a settlement is reached," she said.
Walker, other lawmakers and sources close to the situation believe Bangerter will recommend lawmakers hold off on taking any action until a settlement is in hand.
Negotiations are continuing between the state and attorneys for Depositors of Insured Thrifts (DOIT). Both sides report progress but decline to discuss details of their discussions.
"We are pleased with how (negotiations) are going, but we have not received another formal offer from the state," DOIT attorney George Haley said.
DOIT has filed a class action lawsuit against the state and several hundred other defendants allegedly involved in the collapse of Utah's thrift industry.
Two years ago this month, state regulators shut down the ailing institutions after declaring the Industrial Loan Guaranty Corp., which insured thrift deposits, was insolvent.
Five thrift and loans with more than $100 million in deposits are now under court-ordered liquidation, and depositors stand to lose a substantial portion of their savings as a result. The lawsuit, accusing the state of fraud, negligence and racketeering in handling the thrift failures, is intended to recover those anticipated losses.
Bangerter appointed a task force last spring to recommend a settlement to depositor claims. But the recommendation to return 100 percent of depositors' principal through a $67 million bond issue didn't win the favor of either Bangerter or DOIT.
Bangerter said the proposal put too much of the burden on taxpayers to finance the bond, and DOIT doesn't like it because it doesn't include interest or attorneys' fees, which range between $10 million and $20 million, taking a healthy chunk out of the principal reimbursement.
DOIT has been demanding the state put pressure on state insurance liability carriers to pick up more of the settlement tab, and to let DOIT go after defendants other than the state in their lawsuit to recover attorneys' fees. Those areas may be key points of negotiation right now, although neither party will discuss details. If a settlement is reached, it may have to be approved by the judges presiding over the class-action suit and thrift liquidations before lawmakers can complete it, Doxey said.
The state's Board of Examiners, composed of Bangerter, the attorney general and the state auditor, may also have to approve it if it requires an appropriation.
Once those hoops have been jumped through, Bangerter could call the Legislature back into session to consider the thrift issue.
Another option is not adjourning Tuesday's special session, but calling a recess to return within 30 days to consider the settlement with thrift depositors.
But Walker said adjourning would be the preferred choice because a recess would delay enactment of other bills passed Tuesday and inflate the agenda of the future meeting.
"We are fully expecting a settlement to be reached, and we are willing to come back when it happens," Walker said.
"You never know what's going to happen with the Legislature, but there is a strong feeling that most people would be pleased to have this resolved."