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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


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