H.B. 216

1

POLITICAL SUBDIVISION RESIDENTIAL RENTAL
2 AMENDMENTS
3 2012 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Kenneth W. Sumsion
6 Senate Sponsor: ____________
7
8 LONG TITLE
9 General Description:
10 This bill amends language related to municipal or county regulation of a residential
11 rental dwelling.
12 Highlighted Provisions:
13 This bill:
14 . amends the definition of "good landlord program";
15 . defines terms;
16 . prohibits a municipality or county from:
17 . in certain circumstances, requiring an owner of a rental dwelling from obtaining
18 a business license;
19 . conducting an inspection of a rental dwelling;
20 . requiring an owner to attend an owner training program;
21 . requiring an owner to meet with a renter; and
22 . requiring an owner to include certain conditions in a rental agreement; and
23 . makes technical corrections.
24 Money Appropriated in this Bill:
25 None
26 Other Special Clauses:
27 None

28 Utah Code Sections Affected:
29 AMENDS:
30 10-1-203, as last amended by Laws of Utah 2011, Chapter 391
31 10-8-85.5, as last amended by Laws of Utah 2011, Chapter 14
32 ENACTS:
33 17-50-503, Utah Code Annotated 1953
34
35 Be it enacted by the Legislature of the state of Utah:
36 Section 1. Section 10-1-203 is amended to read:
37 10-1-203. License fees and taxes -- Disproportionate rental fee -- Application
38 information to be transmitted to the county assessor.
39 (1) As used in this section:
40 (a) "Business" means any enterprise carried on for the purpose of gain or economic
41 profit, except that the acts of employees rendering services to employers are not included in
42 this definition.
43 (b) "Telecommunications provider" is as defined in Section 10-1-402 .
44 (c) "Telecommunications tax or fee" is as defined in Section 10-1-402 .
45 (2) Except as provided in Subsections (3) through (5), the legislative body of a
46 municipality may license for the purpose of regulation and revenue any business within the
47 limits of the municipality and may regulate that business by ordinance.
48 (3) (a) The legislative body of a municipality may raise revenue by levying and
49 collecting a municipal energy sales or use tax as provided in Part 3, Municipal Energy Sales
50 and Use Tax Act, except a municipality may not levy or collect a franchise tax or fee on an
51 energy supplier other than the municipal energy sales and use tax provided in Part 3, Municipal
52 Energy Sales and Use Tax Act.
53 (b) (i) Subsection (3)(a) does not affect the validity of a franchise agreement as defined
54 in Subsection 10-1-303 (6), that is in effect on July 1, 1997, or a future franchise.
55 (ii) A franchise agreement as defined in Subsection 10-1-303 (6) in effect on January 1,
56 1997, or a future franchise shall remain in full force and effect.
57 (c) A municipality that collects a contractual franchise fee pursuant to a franchise
58 agreement as defined in Subsection 10-1-303 (6) with an energy supplier that is in effect on July

59 1, 1997, may continue to collect that fee as provided in Subsection 10-1-310 (2).
60 (d) (i) Subject to the requirements of Subsection (3)(d)(ii), a franchise agreement as
61 defined in Subsection 10-1-303 (6) between a municipality and an energy supplier may contain
62 a provision that:
63 (A) requires the energy supplier by agreement to pay a contractual franchise fee that is
64 otherwise prohibited under Part 3, Municipal Energy Sales and Use Tax Act; and
65 (B) imposes the contractual franchise fee on or after the day on which Part 3,
66 Municipal Energy Sales and Use Tax is:
67 (I) repealed, invalidated, or the maximum allowable rate provided in Section 10-1-305
68 is reduced; and
69 (II) is not superseded by a law imposing a substantially equivalent tax.
70 (ii) A municipality may not charge a contractual franchise fee under the provisions
71 permitted by Subsection (3)(b)(i) unless the municipality charges an equal contractual franchise
72 fee or a tax on all energy suppliers.
73 (4) (a) Subject to Subsection (4)(b), beginning July 1, 2004, the legislative body of a
74 municipality may raise revenue by levying and providing for the collection of a municipal
75 telecommunications license tax as provided in Part 4, Municipal Telecommunications License
76 Tax Act.
77 (b) A municipality may not levy or collect a telecommunications tax or fee on a
78 telecommunications provider except as provided in Part 4, Municipal Telecommunications
79 License Tax Act.
80 (5) (a) (i) The legislative body of a municipality may by ordinance raise revenue by
81 levying and collecting a license fee or tax on:
82 (A) a parking service business in an amount that is less than or equal to:
83 (I) $1 per vehicle that parks at the parking service business; or
84 (II) 2% of the gross receipts of the parking service business;
85 (B) a public assembly or other related facility in an amount that is less than or equal to
86 $5 per ticket purchased from the public assembly or other related facility; and
87 (C) subject to the limitations of Subsections (5)(c), (d), and (e):
88 (I) a business that causes disproportionate costs of municipal services; or
89 (II) a purchaser from a business for which the municipality provides an enhanced level

90 of municipal services.
91 (ii) Nothing in this Subsection (5)(a) may be construed to authorize a municipality to
92 levy or collect a license fee or tax on a public assembly or other related facility owned and
93 operated by another political subdivision other than a community development and renewal
94 agency without the written consent of the other political subdivision.
95 (b) As used in this Subsection (5):
96 (i) "Municipal services" includes:
97 (A) public utilities; and
98 (B) services for:
99 (I) police;
100 (II) fire;
101 (III) storm water runoff;
102 (IV) traffic control;
103 (V) parking;
104 (VI) transportation;
105 (VII) beautification; or
106 (VIII) snow removal.
107 (ii) "Parking service business" means a business:
108 (A) that primarily provides off-street parking services for a public facility that is
109 wholly or partially funded by public money;
110 (B) that provides parking for one or more vehicles; and
111 (C) that charges a fee for parking.
112 (iii) "Public assembly or other related facility" means an assembly facility that:
113 (A) is wholly or partially funded by public money;
114 (B) is operated by a business; and
115 (C) requires a person attending an event at the assembly facility to purchase a ticket.
116 (c) (i) Before the legislative body of a municipality imposes a license fee on a business
117 that causes disproportionate costs of municipal services under Subsection (5)(a)(i)(C)(I), the
118 legislative body of the municipality shall adopt an ordinance defining for purposes of the tax
119 under Subsection (5)(a)(i)(C)(I):
120 (A) the costs that constitute disproportionate costs; and

121 (B) the amounts that are reasonably related to the costs of the municipal services
122 provided by the municipality.
123 (ii) The amount of a fee under Subsection (5)(a)(i)(C)(I) shall be reasonably related to
124 the costs of the municipal services provided by the municipality.
125 (d) (i) Before the legislative body of a municipality imposes a license fee on a
126 purchaser from a business for which it provides an enhanced level of municipal services under
127 Subsection (5)(a)(i)(C)(II), the legislative body of the municipality shall adopt an ordinance
128 defining for purposes of the fee under Subsection (5)(a)(i)(C)(II):
129 (A) the level of municipal services that constitutes the basic level of municipal services
130 in the municipality; and
131 (B) the amounts that are reasonably related to the costs of providing an enhanced level
132 of municipal services in the municipality.
133 (ii) The amount of a fee under Subsection (5)(a)(i)(C)(II) shall be reasonably related to
134 the costs of providing an enhanced level of the municipal services.
135 (e) (i) As used in this Subsection (5)(e):
136 (A) "Disproportionate rental fee" means a license fee on rental housing based on the
137 disproportionate costs of municipal services caused by the rental housing or on an enhanced
138 level of municipal services provided to the rental housing.
139 (B) "Disproportionate rental fee reduction" means a reduction of a disproportionate
140 rental fee as a condition of complying with the requirements of a good landlord program.
141 (C) "Good landlord program" means a program established by a municipality that
142 provides a reduction in a disproportionate rental fee for a landlord who:
143 [(I) completes a landlord training program approved by the municipality;]
144 [(II)] (I) implements measures to reduce crime in rental housing as specified in
145 municipal ordinances; and
146 [(III)] (II) operates and manages rental housing in accordance with applicable
147 municipal ordinances.
148 (D) "Municipal services study" means a study, or an updated study, conducted by a
149 municipality of the cost of all municipal services that the municipality provides to the
150 applicable rental housing.
151 (E) "Rental housing cost" means the municipality's cost:

152 (I) of providing municipal services to the rental housing;
153 (II) that is reasonably attributable to the rental housing; and
154 (III) that would not have occurred in the absence of the rental housing.
155 (ii) A municipality may impose and collect a disproportionate rental fee if:
156 (A) the municipality:
157 (I) adopts the ordinances required under Subsections (5)(c) and (d), as applicable;
158 (II) conducts a municipal services study;
159 (III) updates the municipal services study:
160 (Aa) before increasing the amount of the disproportionate rental fee; and
161 (Bb) before decreasing the amount of the disproportionate rental fee reduction; and
162 (IV) establishes a good landlord program; and
163 (B) the disproportionate rental fee does not exceed the rental housing cost, as
164 determined by the municipal services study.
165 (iii) (A) The requirement under Subsection (5)(e)(ii)(A)(IV) to establish a good
166 landlord program does not apply to a municipality that imposed and collected a
167 disproportionate rental fee on January 1, 2009.
168 (B) A municipality claiming an exemption under Subsection (5)(e)(iii)(A) shall
169 conduct an updated municipal services study at least every four years.
170 (iv) The requirement under Subsection (5)(e)(ii)(A)(II) to conduct a municipal services
171 study does not apply to a municipality that:
172 (A) imposed and collected a disproportionate rental fee on May 2, 2005, of $17 or less
173 per unit per year;
174 (B) does not increase the amount of its disproportionate rental fee; and
175 (C) does not decrease the amount of its disproportionate rental fee reduction.
176 (v) The fee limitation under Subsection (5)(e)(ii)(B) does not apply to a municipality
177 that:
178 (A) imposed and collected a disproportionate rental fee on May 2, 2005, that was $17
179 or less per unit per year;
180 (B) does not increase the amount of its disproportionate rental fee; and
181 (C) does not decrease the amount of its disproportionate rental fee reduction.
182 (vi) Until May 2, 2012, the requirement under Subsection (5)(e)(ii)(A)(II) to conduct a

183 municipal services study before imposing and collecting a disproportionate rental fee, does not
184 apply to a municipality that:
185 (A) on May 2, 2005, imposed and collected a disproportionate rental fee that exceeds
186 $17 per unit per year;
187 (B) had implemented, before January 1, 2005, a good landlord program;
188 (C) does not decrease the amount of the disproportionate rental fee reduction; and
189 (D) does not increase the amount of its disproportionate rental fee.
190 (6) All license fees and taxes shall be uniform in respect to the class upon which they
191 are imposed.
192 (7) The municipality shall transmit the information from each approved business
193 license application to the county assessor within 60 days following the approval of the
194 application.
195 (8) If challenged in court, an ordinance enacted by a municipality before January 1,
196 1994, imposing a business license fee on rental dwellings under this section shall be upheld
197 unless the business license fee is found to impose an unreasonable burden on the fee payer.
198 Section 2. Section 10-8-85.5 is amended to read:
199 10-8-85.5. Rental terms defined -- Municipality may require a business license or
200 a regulatory business license -- Exception.
201 (1) As used in this section[, "rental dwelling"]:
202 (a) (i) "Owner" means the owner, lessor, or sublessor of a rental dwelling.
203 (ii) A managing agent, leasing agent, or resident manager is considered an owner for
204 purposes of:
205 (A) notice and other communication required or allowed under this section unless the
206 agent or manager specifies otherwise in writing in the rental agreement; and
207 (B) an owner training program.
208 (b) "Rental agreement" means an agreement, written or oral, which establishes or
209 modifies the terms, conditions, rules, or any other provisions regarding the use and occupancy
210 of a rental dwelling.
211 (c) "Rental dwelling means a building or portion of a building that is:
212 [(a)] (i) used or designated for use as a residence by one or more [persons] renters; and
213 [(b) (i)] (ii) (A) available to be rented, loaned, leased, or hired out for a period of one

214 month or longer; or
215 [(ii)] (B) arranged, designed, or built to be rented, loaned, leased, or hired out for a
216 period of one month or longer.
217 (d) "Renter" means a person entitled under a rental agreement to occupy a rental
218 dwelling to the exclusion of others.
219 (2) (a) [The] Except as provided in Subsection (2)(b), a legislative body of a
220 municipality may by ordinance require the owner of a rental dwelling located within the
221 municipality:
222 (i) to obtain a business license pursuant to Section 10-1-203 ; or
223 (ii) [(A)] to obtain a regulatory business license to operate and maintain the rental
224 dwelling[; and].
225 [(B) to allow inspections of the rental dwelling as a condition of obtaining a regulatory
226 business license.]
227 (b) A municipality may not:
228 (i) require the owner of a rental dwelling of five units or less to obtain a business
229 license in accordance with Subsection (2)(a)(i) or a regulatory business license in accordance
230 with Subsection (2)(a)(ii); or
231 (ii) require an owner of multiple rental dwellings or multiple buildings containing
232 rental dwellings other than an owner described in Subsection (2)(b)(i) to obtain more than one
233 regulatory business license for the operation and maintenance of those rental dwellings.
234 [(c) (i) Notwithstanding Subsection (2)(b), a municipality may, until August 31, 2008,
235 impose upon an owner subject to Subsection (2)(a) a reasonable inspection fee for the
236 inspection of each rental dwelling owned by that owner.]
237 [(ii) Beginning September 1, 2008, a municipality may not charge a fee for the
238 inspection of a rental dwelling.]
239 [(d) If a municipality's inspection of a rental dwelling, allowed under Subsection
240 (2)(a)(ii)(B), approves the rental dwelling for purposes of a regulatory business license, a
241 municipality may not inspect that rental dwelling during the next 36 months, unless the
242 municipality has reasonable cause to believe that a condition in the rental dwelling is in
243 violation of an applicable law or ordinance.]
244 (c) (i) A municipality may not:

245 (A) require the inspection of a rental dwelling as a condition of obtaining a business
246 license or a regulatory business license; or
247 (B) except as provided in Subsection (2)(c)(ii), inspect a rental dwelling without the
248 permission of the owner and, if the rental dwelling is occupied, the renter.
249 (ii) Subsection (2)(c)(i)(B) does not apply to an inspection of rental dwelling grounds
250 in accordance with Section 10-11-2 .
251 (3) A municipality may not:
252 (a) interfere with the ability of an owner of a rental dwelling to contract with a tenant
253 concerning the payment of the cost of a utility or municipal service provided to the rental
254 dwelling; [or]
255 (b) except as required under the State Construction Code or an approved code under
256 Title 15A, State Construction and Fire Codes Act, for a structural change to the rental dwelling,
257 or as required in an ordinance adopted before January 1, 2008, require the owner of a rental
258 dwelling to retrofit the rental dwelling with or install in the rental dwelling a safety feature that
259 was not required when the rental dwelling was constructed[.]; or
260 (c) require an owner to:
261 (i) attend an owner training program;
262 (ii) meet with a renter; or
263 (iii) include a condition in a rental agreement unless the condition is require by state
264 law.
265 (4) Nothing in this section shall be construed to affect the rights and duties established
266 under Title 57, Chapter 22, Utah Fit Premises Act, or to restrict a municipality's ability to
267 enforce its generally applicable health ordinances or building code, a local health department's
268 authority under Title 26A, Chapter 1, Local Health Departments, or the Utah Department of
269 Health's authority under Title 26, Utah Health Code.
270 Section 3. Section 17-50-503 is enacted to read:
271 17-50-503. "Rental dwelling" defined -- County prohibited from making certain
272 requirements of owner.
273 (1) As used in this section:
274 (a) (i) "Owner" means the owner, lessor, or sublessor of a rental dwelling.
275 (ii) A managing agent, leasing agent, or resident manager is considered an owner for

276 purposes of:
277 (A) notice and other communication required or allowed under this section unless the
278 agent or manager specifies otherwise in writing in the rental agreement; and
279 (B) an owner training program.
280 (b) "Rental agreement" means an agreement, written or oral, which establishes or
281 modifies the terms, conditions, rules, or any other provisions regarding the use and occupancy
282 of a rental dwelling.
283 (c) "Rental dwelling" means a building or portion of a building that is:
284 (i) used or designated for use as a residence by one or more persons; and
285 (ii) (A) available to be rented, loaned, leased, or hired out for a period of one month or
286 longer; or
287 (B) arranged, designed, or built to be rented, loaned, leased, or hired out for a period of
288 one month or longer.
289 (d) "Renter" means a person entitled under a rental agreement to occupy a rental
290 dwelling to the exclusion of others.
291 (2) A county may not:
292 (a) require the owner of a rental dwelling of five units or less to obtain a business
293 license described in Section 17-36-216 ;
294 (b) (i) require the inspection of a rental dwelling as a condition of obtaining a business
295 license; or
296 (ii) subject to Subsection (3), inspect a rental dwelling without the permission of the
297 owner and, if the rental dwelling is occupied, the renter; or
298 (c) require an owner to:
299 (i) attend an owner training program;
300 (ii) meet with a renter; or
301 (iii) include a condition in a rental agreement unless the condition is required by state
302 law.
303 (3) Subsection (2)(b)(ii) does not apply to an inspection of rental dwelling grounds.
304 (4) Nothing in this section shall be construed to affect the rights and duties established
305 under Title 57, Chapter 22, Utah Fit Premises Act, or to restrict a county's ability to enforce its
306 generally applicable health ordinances or building code, a local health department's authority

307 under Title 26A, Chapter 1, Local Health Departments, or the Utah Department of Health's
308 authority under Title 26, Utah Health Code.




Legislative Review Note
as of 12-15-11 10:46 AM

Office of Legislative Research and General Counsel