DAR File No. 40414

Commerce, Consumer Protection

Section R152-15-3

Compensated Employees and Independent Contractors

Notice of Proposed Rule

(Amendment)

DAR File No.: 40414
Filed: 05/11/2016 10:32:08 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

Certain support, advice, or training activities to compensated employees or independent contractors do not constitute a "sales program" or "marketing program" for purposes of defining an "assisted marketing plan" under the Business Opportunity Disclosure Act (BODA). The purpose of this change is to clarify when such support, advice, or training to employees or independent contractors is not a sales or marketing program.

Summary of the rule or change:

This change provides clarification of the definition of "assisted marketing plan" under BODA. It explains that certain support, advice, or training to compensated employees and independent contractors, unrelated to sales or marketing, does not constitute a sales or marketing plan.

State statutory or constitutional authorization for this rule:

• Subsection 13-15-2(1)(a)

Anticipated cost or savings to:

the state budget:

This rule change is not anticipated to result in individuals or businesses changing their BODA filing status with the Division of Consumer Protection, is not anticipated to result in a reduction of the volume of filing fees, and thus is not anticipated to result in a cost or savings to the Utah state budget. If the rule change were to result in some individuals or businesses choosing not to file with the Division of Consumer Protection, the costs would be low at $200 per business choosing not to file, would be recouped by decreased administrative costs in managing the filings, and would be absorbed by the Division of Consumer Protection�s current budget.

local governments:

BODA and its applicable rules do not regulate local government. Therefore, this change will not result in cost or savings to local government.

small businesses:

This rule change is not anticipated to result in individuals or businesses changing their BODA filing status with the Division of Consumer Protection, is not anticipated to result in a reduction of the volume of filing fees, and thus, is not anticipated to result in a cost or savings to small businesses. If the rule change were to result in some businesses choosing not to file with the Division of Consumer Protection, the savings would be low at $200 per small business choosing not to file.

persons other than small businesses, businesses, or local governmental entities:

This rule change is not anticipated to result in individuals or businesses changing their BODA filing status with the Division of Consumer Protection, is not anticipated to result in a reduction of the volume of filing fees, and thus, is not anticipated to result in a cost or savings to persons other than small businesses or local government entities. If the rule change were to result in some persons choosing not to file with the Division of Consumer Protection, the savings would be low at $200 per person choosing not to file.

Compliance costs for affected persons:

This rule change is not anticipated to result in individuals or businesses changing their BODA filing status with the Division of Consumer Protection, is not anticipated to result in a reduction of the volume of filing fees, and thus, is not anticipated to result in a cost or savings to any person. If the rule were to result in some persons choosing not to file, the savings would be low at $200 per person choosing not to file.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule change clarifies the Business Opportunity Disclosure Act's definition of an "assisted marketing plan". The new rule excludes from the definition of "assisted marketing plan", support, advice, or training that is unrelated to sales and marketing and that is given by a company to its compensated employees. No fiscal impact to businesses is anticipated.

Francine A. Giani, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Commerce
Consumer Protection
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Jacob Hart at the above address, by phone at 801-530-6636, by FAX at , or by Internet E-mail at jfhart@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

07/01/2016

This rule may become effective on:

07/08/2016

Authorized by:

Daniel O'Bannon, Director

R152. Commerce, Consumer Protection.

R152-15. Business Opportunity Disclosure Act Rules.

R152-15-3. Compensated Employees and Independent Contractors.

(1) As used in Utah Code Section 13-15-2(1)(a)(iv), "sales program" or "marketing program" shall not include support, advice, or training that is:

(a) provided by a business to its compensated employee or independent contractor;

(b) unrelated to sales or marketing; and

(c) regarding work performed for the business providing the support, advice, or training.

 

KEY: franchises, marketing, consumer protection

Date of Enactment or Last Substantive Amendment: [August 13, 2002]2016

Notice of Continuation: March 22, 2012

Authorizing, and Implemented or Interpreted Law: 13-15-3; 13-2-5