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H.B. 342 Enrolled

             1     

DISPROPORTIONATE RENTAL FEE
             2      AMENDMENTS
             3      2009 GENERAL SESSION
             4      STATE OF UTAH
             5      Chief Sponsor: Gage Froerer
             6      Senate Sponsor: Curtis S. Bramble
             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies a provision of the Utah Municipal Code relating to disproportionate
             11      rental fees imposed by municipalities.
             12      Highlighted Provisions:
             13          This bill:
             14          .    clarifies that a municipality that has not already imposed a disproportionate rental
             15      fee is authorized to impose the fee after meeting specified requirements and
             16      conditions;
             17          .    requires municipalities imposing a disproportionate rental fee for the first time to
             18      establish a good landlord program allowing the landlord to qualify for a reduction
             19      in the disproportionate rental fee if complying with certain requirements;
             20          .    removes the requirement to update the municipal services study every six years for
             21      municipalities with a good landlord program;
             22          .    clarifies and rewrites provisions that grandfather certain municipalities from certain
             23      requirements and restrictions;
             24          .    establishes a deadline for completing a municipal services study for certain
             25      municipalities;
             26          .    changes the term "governing body" to "legislative body" in certain provisions;
             27          .    provides definitions; and
             28          .    makes technical changes.
             29      Monies Appropriated in this Bill:

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             30          None
             31      Other Special Clauses:
             32          None
             33      Utah Code Sections Affected:
             34      AMENDS:
             35          10-1-203, as last amended by Laws of Utah 2008, Chapter 207
             36     
             37      Be it enacted by the Legislature of the state of Utah:
             38          Section 1. Section 10-1-203 is amended to read:
             39           10-1-203. License fees and taxes -- Disproportionate rental fee -- Application
             40      information to be transmitted to the county assessor.
             41          (1) As used in this section:
             42          (a) "Business" means any enterprise carried on for the purpose of gain or economic
             43      profit, except that the acts of employees rendering services to employers are not included in
             44      this definition.
             45          (b) "Telecommunications provider" is as defined in Section 10-1-402 .
             46          (c) "Telecommunications tax or fee" is as defined in Section 10-1-402 .
             47          (2) Except as provided in Subsections (3) through (5), the [governing] legislative body
             48      of a municipality may license for the purpose of regulation and revenue any business within
             49      the limits of the municipality and may regulate that business by ordinance.
             50          (3) (a) The [governing] legislative body of a municipality may raise revenue by
             51      levying and collecting a municipal energy sales or use tax as provided in Part 3, Municipal
             52      Energy Sales and Use Tax Act, except a municipality may not levy or collect a franchise tax or
             53      fee on an energy supplier other than the municipal energy sales and use tax provided in Part 3,
             54      Municipal Energy Sales and Use Tax Act.
             55          (b) (i) Subsection (3)(a) does not affect the validity of a franchise agreement as
             56      defined in Subsection 10-1-303 (6), that is in effect on July 1, 1997, or a future franchise.
             57          (ii) A franchise agreement as defined in Subsection 10-1-303 (6) in effect on January

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             58      1, 1997, or a future franchise shall remain in full force and effect.
             59          (c) A municipality that collects a contractual franchise fee pursuant to a franchise
             60      agreement as defined in Subsection 10-1-303 (6) with an energy supplier that is in effect on
             61      July 1, 1997, may continue to collect that fee as provided in Subsection 10-1-310 (2).
             62          (d) (i) Subject to the requirements of Subsection (3)(d)(ii), a franchise agreement as
             63      defined in Subsection 10-1-303 (6) between a municipality and an energy supplier may contain
             64      a provision that:
             65          (A) requires the energy supplier by agreement to pay a contractual franchise fee that is
             66      otherwise prohibited under Part 3, Municipal Energy Sales and Use Tax Act; and
             67          (B) imposes the contractual franchise fee on or after the day on which Part 3,
             68      Municipal Energy Sales and Use Tax is:
             69          (I) repealed, invalidated, or the maximum allowable rate provided in Section 10-1-305
             70      is reduced; and
             71          (II) is not superseded by a law imposing a substantially equivalent tax.
             72          (ii) A municipality may not charge a contractual franchise fee under the provisions
             73      permitted by Subsection (3)(b)(i) unless the municipality charges an equal contractual
             74      franchise fee or a tax on all energy suppliers.
             75          (4) (a) Subject to Subsection (4)(b), beginning July 1, 2004, the [governing]
             76      legislative body of a municipality may raise revenue by levying and providing for the
             77      collection of a municipal telecommunications license tax as provided in Part 4, Municipal
             78      Telecommunications License Tax Act.
             79          (b) A municipality may not levy or collect a telecommunications tax or fee on a
             80      telecommunications provider except as provided in Part 4, Municipal Telecommunications
             81      License Tax Act.
             82          (5) (a) (i) The [governing] legislative body of a municipality may by ordinance raise
             83      revenue by levying and collecting a license fee or tax on:
             84          (A) a parking service business in an amount that is less than or equal to:
             85          (I) $1 per vehicle that parks at the parking service business; or

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             86          (II) 2% of the gross receipts of the parking service business;
             87          (B) a public assembly or other related facility in an amount that is less than or equal to
             88      $5 per ticket purchased from the public assembly or other related facility; and
             89          (C) subject to the limitations of Subsections (5)(c), (d), and (e), a business:
             90          (I) that causes disproportionate costs of municipal services; or
             91          (II) for which the municipality provides an enhanced level of municipal services [in an
             92      amount that is reasonably related to the costs of the municipal services provided by the
             93      municipality].
             94          (ii) Nothing in this Subsection (5)(a) may be construed to authorize a municipality to
             95      levy or collect a license fee or tax on a public assembly or other related facility owned and
             96      operated by another political subdivision other than a community development and renewal
             97      agency without the written consent of the other political subdivision.
             98          (b) As used in this Subsection (5):
             99          (i) "Municipal services" [include] includes:
             100          (A) public utilities; [or] and
             101          (B) services for:
             102          (I) police;
             103          (II) fire;
             104          (III) storm water runoff;
             105          (IV) traffic control;
             106          (V) parking;
             107          (VI) transportation;
             108          (VII) beautification; or
             109          (VIII) snow removal.
             110          (ii) "Parking service business" means a business:
             111          (A) that primarily provides off-street parking services for a public facility that is
             112      wholly or partially funded by public moneys;
             113          (B) that provides parking for one or more vehicles; and

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             114          (C) that charges a fee for parking.
             115          (iii) "Public assembly or other related facility" means an assembly facility that:
             116          (A) is wholly or partially funded by public moneys;
             117          (B) is operated by a business; and
             118          (C) requires a person attending an event at the assembly facility to purchase a ticket.
             119          (c) (i) Before the [governing] legislative body of a municipality imposes a license fee
             120      [or tax] on a business that causes disproportionate costs of municipal services under
             121      Subsection (5)(a)[(iii)](i)(C)(I), the [governing] legislative body of the municipality shall
             122      adopt an ordinance defining for purposes of the tax under Subsection (5)(a)[(iii)](i)(C)(I)
             123      [what constitutes]:
             124          (A) the costs that constitute disproportionate costs; and [what]
             125          (B) the amounts that are reasonably related to the costs of the municipal services
             126      provided by the municipality.
             127          (ii) The amount of a fee under Subsection (5)(a)(i)(C)(I) shall be reasonably related to
             128      the costs of the municipal services provided by the municipality.
             129          (d) (i) Before the [governing] legislative body of a municipality imposes a license fee
             130      [or tax] on a business for which it provides an enhanced level of municipal services under
             131      Subsection (5)(a)[(iii)](i)(C)(II), the [governing] legislative body of the municipality shall
             132      adopt an ordinance defining for purposes of the [tax] fee under Subsection
             133      (5)(a)[(iii)](i)(C)(II): [what]
             134          (A) the level of municipal services that constitutes the basic level of municipal
             135      services in the municipality; and [what]
             136          (B) the amounts that are reasonably related to the costs of providing an enhanced level
             137      of municipal services in the municipality.
             138          (ii) The amount of a fee under Subsection (5)(a)(i)(C)(II) shall be reasonably related to
             139      the costs of providing an enhanced level of the municipal services.
             140          (e) (i) As used in this Subsection (5)(e):
             141          (A) "Disproportionate rental fee" means a license fee [or tax] on rental housing based

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             142      on the disproportionate costs of municipal services caused by the rental housing or on an
             143      enhanced level of municipal services provided to the rental housing.
             144          (B) "Disproportionate rental fee reduction" means a reduction of a disproportionate
             145      rental fee as a condition of complying with the requirements of a good landlord program.
             146          (C) "Good landlord program" means a program established by a municipality that
             147      provides a reduction in a disproportionate rental fee for a landlord who:
             148          (I) completes a landlord training program approved by the municipality;
             149          (II) implements measures to reduce crime in rental housing as specified in municipal
             150      ordinances; and
             151          (III) operates and manages rental housing in accordance with applicable municipal
             152      ordinances.
             153          [(B)] (D) "Municipal services study" means a study, or an updated study, conducted
             154      by a municipality of the cost of all municipal services that the municipality provides to the
             155      applicable rental housing.
             156          [(C)] (E) "Rental housing cost" means the municipality's cost:
             157          (I) of providing municipal services to the rental housing;
             158          (II) that is reasonably attributable to the rental housing; and
             159          (III) that would not have occurred in the absence of the rental housing.
             160          (ii) A municipality may impose and collect a disproportionate rental fee if:
             161          (A) the municipality:
             162          (I) adopts the ordinances required under Subsections (5)(c) and (d), as applicable;
             163          (II) conducts a municipal services study;
             164          (III) updates the municipal services study:
             165          (Aa) before increasing the amount of the disproportionate rental fee; and
             166          (Bb) before decreasing the amount of the disproportionate rental fee reduction; and
             167          (IV) establishes a good landlord program; and
             168          (B) the disproportionate rental fee does not exceed the rental housing cost, as
             169      determined by the municipal services study.

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             170          [(ii)] (iii) (A) [Each] The requirement under Subsection (5)(e)(ii)(A)(IV) to establish a
             171      good landlord program does not apply to a municipality that [levies] imposed and [collects]
             172      collected a disproportionate rental fee [that exceeds $17 per unit per year or that intends to
             173      impose a disproportionate rental fee for the first time shall: (I) before] on January 1, [2007 and
             174      except as provided in Subsection (5)(e)(iv), conduct a municipal services study; and (II)]
             175      2009.     (B) A municipality claiming an exemption under Subsection (5)(e)(iii)(A) shall
             176      conduct an updated municipal services study[: (Aa) every six years after the first municipal
             177      services study, if the municipality has established a program that provides a reduction in the
             178      disproportionate rental fee for a landlord that participates in a landlord training program; and
             179      (Bb)] at least every four years [after the first municipal services study, for each other
             180      municipality].
             181          [(B) Each] (iv) The requirement under Subsection (5)(e)(ii)(A)(II) to conduct a
             182      municipal services study does not apply to a municipality that [levies]:
             183          (A) imposed and [collects] collected a disproportionate rental fee [that is] on May 2,
             184      2005 of $17 or less per unit per year [and that intends to]:
             185          (B) does not increase the amount of its disproportionate rental fee [shall conduct a
             186      municipal services study before increasing]; and
             187          (C) does not decrease the amount of its disproportionate rental fee reduction.
             188          [(iii) (A) Beginning January 1, 2007, a disproportionate rental fee may not exceed the
             189      rental housing cost, as determined in a municipal services study. (B)]
             190          (v) The fee limitation under Subsection (5)(e)[(iii)(A)](ii)(B) does not apply to a
             191      municipality [whose] that:
             192          (A) imposed and collected a disproportionate rental fee [is] on May 2, 2005 that was
             193      $17 or less [and that] per unit per year;
             194          (B) does not increase the amount of its disproportionate rental fee[.]; and
             195          (C) does not decrease the amount of its disproportionate rental fee reduction.
             196          [(iv) The] (vi) Until May 2, 2012, the requirement under Subsection
             197      (5)(e)(ii)(A)[(I)](II) to conduct a municipal services study before [January 1, 2007] imposing

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             198      and collecting a disproportionate rental fee, does not apply to a municipality that [levies]:
             199          (A) on May 2, 2005, imposed and [collects] collected a disproportionate rental fee that
             200      exceeds $17 per unit per year [if the municipality:];
             201          [(A) has] (B) had implemented, before January 1, 2005, a good landlord program
             202      [that provides a reduction in the disproportionate rental fee for each landlord that implements
             203      measures to reduce crime in the rental housing];
             204          [(B)] (C) does not decrease the amount of the disproportionate rental fee reduction
             205      [provided in a program described in Subsection (5)(e)(iv)(A)]; and
             206          [(C)] (D) does not increase the amount of its disproportionate rental fee.
             207          (6) All license fees and taxes shall be uniform in respect to the class upon which they
             208      are imposed.
             209          (7) The [governing body] municipality shall transmit the information from each
             210      approved business license application to the county assessor within 60 days following the
             211      approval of the application.
             212          (8) If challenged in court, an ordinance enacted by a municipality before January 1,
             213      1994, imposing a business license fee [or tax] on rental dwellings under this section shall be
             214      upheld unless the business license fee [or tax] is found to impose an unreasonable burden on
             215      the fee [or tax] payer.

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