H.B. 220

1

DISPROPORTIONATE RENTAL FEE
2 AMENDMENTS
3 2010 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Gage Froerer
6 Senate Sponsor: ____________
7
8 LONG TITLE
9 General Description:
10 This bill modifies provisions relating to municipal disproportionate rental fees.
11 Highlighted Provisions:
12 This bill:
13 . prohibits municipalities from excluding landlords from participation in a good
14 landlord program, under which the landlord qualifies for a disproportionate rental
15 fee reduction, based on the landlord's accepting tenants with no more than one
16 felony conviction.
17 Monies Appropriated in this Bill:
18 None
19 Other Special Clauses:
20 None
21 Utah Code Sections Affected:
22 AMENDS:
23 10-1-203, as last amended by Laws of Utah 2009, Chapter 189
24
25 Be it enacted by the Legislature of the state of Utah:
26 Section 1. Section 10-1-203 is amended to read:
27 10-1-203. License fees and taxes -- Disproportionate rental fee -- Application

28 information to be transmitted to the county assessor.
29 (1) As used in this section:
30 (a) "Business" means any enterprise carried on for the purpose of gain or economic
31 profit, except that the acts of employees rendering services to employers are not included in
32 this definition.
33 (b) "Telecommunications provider" is as defined in Section 10-1-402 .
34 (c) "Telecommunications tax or fee" is as defined in Section 10-1-402 .
35 (2) Except as provided in Subsections (3) through (5), the legislative body of a
36 municipality may license for the purpose of regulation and revenue any business within the
37 limits of the municipality and may regulate that business by ordinance.
38 (3) (a) The legislative body of a municipality may raise revenue by levying and
39 collecting a municipal energy sales or use tax as provided in Part 3, Municipal Energy Sales
40 and Use Tax Act, except a municipality may not levy or collect a franchise tax or fee on an
41 energy supplier other than the municipal energy sales and use tax provided in Part 3, Municipal
42 Energy Sales and Use Tax Act.
43 (b) (i) Subsection (3)(a) does not affect the validity of a franchise agreement as defined
44 in Subsection 10-1-303 (6), that is in effect on July 1, 1997, or a future franchise.
45 (ii) A franchise agreement as defined in Subsection 10-1-303 (6) in effect on January 1,
46 1997, or a future franchise shall remain in full force and effect.
47 (c) A municipality that collects a contractual franchise fee pursuant to a franchise
48 agreement as defined in Subsection 10-1-303 (6) with an energy supplier that is in effect on July
49 1, 1997, may continue to collect that fee as provided in Subsection 10-1-310 (2).
50 (d) (i) Subject to the requirements of Subsection (3)(d)(ii), a franchise agreement as
51 defined in Subsection 10-1-303 (6) between a municipality and an energy supplier may contain
52 a provision that:
53 (A) requires the energy supplier by agreement to pay a contractual franchise fee that is
54 otherwise prohibited under Part 3, Municipal Energy Sales and Use Tax Act; and
55 (B) imposes the contractual franchise fee on or after the day on which Part 3,
56 Municipal Energy Sales and Use Tax is:
57 (I) repealed, invalidated, or the maximum allowable rate provided in Section 10-1-305
58 is reduced; and

59 (II) is not superseded by a law imposing a substantially equivalent tax.
60 (ii) A municipality may not charge a contractual franchise fee under the provisions
61 permitted by Subsection (3)(b)(i) unless the municipality charges an equal contractual franchise
62 fee or a tax on all energy suppliers.
63 (4) (a) Subject to Subsection (4)(b), beginning July 1, 2004, the legislative body of a
64 municipality may raise revenue by levying and providing for the collection of a municipal
65 telecommunications license tax as provided in Part 4, Municipal Telecommunications License
66 Tax Act.
67 (b) A municipality may not levy or collect a telecommunications tax or fee on a
68 telecommunications provider except as provided in Part 4, Municipal Telecommunications
69 License Tax Act.
70 (5) (a) (i) The legislative body of a municipality may by ordinance raise revenue by
71 levying and collecting a license fee or tax on:
72 (A) a parking service business in an amount that is less than or equal to:
73 (I) $1 per vehicle that parks at the parking service business; or
74 (II) 2% of the gross receipts of the parking service business;
75 (B) a public assembly or other related facility in an amount that is less than or equal to
76 $5 per ticket purchased from the public assembly or other related facility; and
77 (C) subject to the limitations of Subsections (5)(c), (d), and (e), a business:
78 (I) that causes disproportionate costs of municipal services; or
79 (II) for which the municipality provides an enhanced level of municipal services.
80 (ii) Nothing in this Subsection (5)(a) may be construed to authorize a municipality to
81 levy or collect a license fee or tax on a public assembly or other related facility owned and
82 operated by another political subdivision other than a community development and renewal
83 agency without the written consent of the other political subdivision.
84 (b) As used in this Subsection (5):
85 (i) "Municipal services" includes:
86 (A) public utilities; and
87 (B) services for:
88 (I) police;
89 (II) fire;

90 (III) storm water runoff;
91 (IV) traffic control;
92 (V) parking;
93 (VI) transportation;
94 (VII) beautification; or
95 (VIII) snow removal.
96 (ii) "Parking service business" means a business:
97 (A) that primarily provides off-street parking services for a public facility that is
98 wholly or partially funded by public moneys;
99 (B) that provides parking for one or more vehicles; and
100 (C) that charges a fee for parking.
101 (iii) "Public assembly or other related facility" means an assembly facility that:
102 (A) is wholly or partially funded by public moneys;
103 (B) is operated by a business; and
104 (C) requires a person attending an event at the assembly facility to purchase a ticket.
105 (c) (i) Before the legislative body of a municipality imposes a license fee on a business
106 that causes disproportionate costs of municipal services under Subsection (5)(a)(i)(C)(I), the
107 legislative body of the municipality shall adopt an ordinance defining for purposes of the tax
108 under Subsection (5)(a)(i)(C)(I):
109 (A) the costs that constitute disproportionate costs; and
110 (B) the amounts that are reasonably related to the costs of the municipal services
111 provided by the municipality.
112 (ii) The amount of a fee under Subsection (5)(a)(i)(C)(I) shall be reasonably related to
113 the costs of the municipal services provided by the municipality.
114 (d) (i) Before the legislative body of a municipality imposes a license fee on a business
115 for which it provides an enhanced level of municipal services under Subsection (5)(a)(i)(C)(II),
116 the legislative body of the municipality shall adopt an ordinance defining for purposes of the
117 fee under Subsection (5)(a)(i)(C)(II):
118 (A) the level of municipal services that constitutes the basic level of municipal services
119 in the municipality; and
120 (B) the amounts that are reasonably related to the costs of providing an enhanced level

121 of municipal services in the municipality.
122 (ii) The amount of a fee under Subsection (5)(a)(i)(C)(II) shall be reasonably related to
123 the costs of providing an enhanced level of the municipal services.
124 (e) (i) As used in this Subsection (5)(e):
125 (A) "Disproportionate rental fee" means a license fee on rental housing based on the
126 disproportionate costs of municipal services caused by the rental housing or on an enhanced
127 level of municipal services provided to the rental housing.
128 (B) "Disproportionate rental fee reduction" means a reduction of a disproportionate
129 rental fee as a condition of complying with the requirements of a good landlord program.
130 (C) "Good landlord program" means a program established by a municipality that
131 provides a reduction in a disproportionate rental fee for a landlord who:
132 (I) completes a landlord training program approved by the municipality;
133 (II) implements measures to reduce crime in rental housing as specified in municipal
134 ordinances; and
135 (III) operates and manages rental housing in accordance with applicable municipal
136 ordinances, subject to Subsection (5)(e)(vii).
137 (D) "Municipal services study" means a study, or an updated study, conducted by a
138 municipality of the cost of all municipal services that the municipality provides to the
139 applicable rental housing.
140 (E) "Rental housing cost" means the municipality's cost:
141 (I) of providing municipal services to the rental housing;
142 (II) that is reasonably attributable to the rental housing; and
143 (III) that would not have occurred in the absence of the rental housing.
144 (ii) A municipality may impose and collect a disproportionate rental fee if:
145 (A) the municipality:
146 (I) adopts the ordinances required under Subsections (5)(c) and (d), as applicable;
147 (II) conducts a municipal services study;
148 (III) updates the municipal services study:
149 (Aa) before increasing the amount of the disproportionate rental fee; and
150 (Bb) before decreasing the amount of the disproportionate rental fee reduction; and
151 (IV) establishes a good landlord program; and

152 (B) the disproportionate rental fee does not exceed the rental housing cost, as
153 determined by the municipal services study.
154 (iii) (A) The requirement under Subsection (5)(e)(ii)(A)(IV) to establish a good
155 landlord program does not apply to a municipality that imposed and collected a
156 disproportionate rental fee on January 1, 2009.
157 (B) A municipality claiming an exemption under Subsection (5)(e)(iii)(A) shall
158 conduct an updated municipal services study at least every four years.
159 (iv) The requirement under Subsection (5)(e)(ii)(A)(II) to conduct a municipal services
160 study does not apply to a municipality that:
161 (A) imposed and collected a disproportionate rental fee on May 2, 2005 of $17 or less
162 per unit per year:
163 (B) does not increase the amount of its disproportionate rental fee; and
164 (C) does not decrease the amount of its disproportionate rental fee reduction.
165 (v) The fee limitation under Subsection (5)(e)(ii)(B) does not apply to a municipality
166 that:
167 (A) imposed and collected a disproportionate rental fee on May 2, 2005 that was $17 or
168 less per unit per year;
169 (B) does not increase the amount of its disproportionate rental fee; and
170 (C) does not decrease the amount of its disproportionate rental fee reduction.
171 (vi) Until May 2, 2012, the requirement under Subsection (5)(e)(ii)(A)(II) to conduct a
172 municipal services study before imposing and collecting a disproportionate rental fee, does not
173 apply to a municipality that:
174 (A) on May 2, 2005, imposed and collected a disproportionate rental fee that exceeds
175 $17 per unit per year;
176 (B) had implemented, before January 1, 2005, a good landlord program;
177 (C) does not decrease the amount of the disproportionate rental fee reduction; and
178 (D) does not increase the amount of its disproportionate rental fee.
179 (vii) A municipality may not exclude a landlord from participation in a good landlord
180 program on the basis that the landlord accepts tenants with no more than one felony conviction.
181 (6) All license fees and taxes shall be uniform in respect to the class upon which they
182 are imposed.

183 (7) The municipality shall transmit the information from each approved business
184 license application to the county assessor within 60 days following the approval of the
185 application.
186 (8) If challenged in court, an ordinance enacted by a municipality before January 1,
187 1994, imposing a business license fee on rental dwellings under this section shall be upheld
188 unless the business license fee is found to impose an unreasonable burden on the fee payer.




Legislative Review Note
as of 9-1-09 6:58 AM

Office of Legislative Research and General Counsel