HB 295: Municipal Services Fees and Political Subdivision Lien Amendments - Utah

Amended 2/19/2025 11:02:391 → Substitute #1 · 6 edits

MODERATE

This bill amends Utah's municipal services fee laws to allow cities to place political subdivision liens on property for unpaid water, sewer, and utility-related service fees. It also updates definitions related to municipal accounting and modifies how special districts can charge interest and penalties on past-due fees. The changes streamline the lien process and clarify billing procedures for municipalities providing utility services.

Scope change

The bill expands the scope to explicitly authorize municipalities to place liens on property for past-due utility-related service fees, including those provided by third-party contractors, and clarifies the process for charging interest and administrative costs on these fees.

REQUIREMENT

New sections establish that municipalities can charge fees for water, sewer, and utility-related services provided directly or through third-party contractors, and can bill customers directly or through third-party billing programs.

Municipalities must provide billing notices detailing fees due and payment due dates, and may combine service billing notices with other municipal billing notices.

ENFORCEMENT

Municipalities are now authorized to hold a political subdivision lien on property for past-due service fees, with specific notice requirements and a minimum 30-day waiting period before filing the lien.

Special districts can now charge interest calculated based on the federal short-term rate plus 18 percentage points, and may charge either a one-time penalty up to 8% or administrative costs, but not both.

TIMELINE

The notice period before a lien can be filed was changed from 60 days to 30 days, and the certification period before recording the lien was changed from 10 days to 10 days after notice of intent to file.

DEFINITION

Updated definitions to include 'utility-adjacent service' for storm water infrastructure maintenance and clarified the definition of 'utility' to include electricity, gas, water, or sewer services.

Amended Excerpts 2/19/2025 11:02:391 → Amended 2/19/2025 11:02:391 · 4 edits

MODERATE

This bill replaces a fragmented excerpt of legislative text with a complete substitute bill that defines municipal accounting terms and authorizes cities to place liens on property for unpaid water, sewer, and utility fees. The changes establish clear definitions for budgeting and financial management in Utah cities while expanding enforcement options for municipalities to collect past due service fees through property liens.

Scope change

The bill now applies to all Utah municipalities (cities of all classes and charter cities) regarding municipal services fees, water, sewer, and utility-related services, including those provided by third parties contracted by the municipality.

SCOPE

Added authority for municipalities to place political subdivision liens on property for past due water, sewer, or utility-related service fees.

DEFINITION

Added comprehensive definitions for municipal accounting terms including account group, appropriation, budget, budget officer, budget period, budgetary fund, check, city general fund, current period, department, encumbrance system, enterprise fund, estimated revenue, financial officer, fiscal period, fund, fund balance, general fund, governing body, interfund loan, last completed fiscal period, public funds, and retained earnings.

Modified the definition of 'encumbrance system' to clarify when obligations cease to be encumbrances, changing from '[Such obligations cease]' to 'An obligation described in Subsection (11)(a) ceases to be an encumbrance when paid or when the actual liability is entered on the city's books of account.'

TECHNICAL

Removed fragmented House Committee Amendments text and replaced with complete bill structure including title, sponsors, long title, general description, highlighted provisions, and Utah Code sections affected.

Introduced → Amended Excerpts 2/19/2025 11:02:391 · 1 edit

MINOR

This bill amendment modifies the timeline for municipalities to place political subdivision liens on property for unpaid service fees. The most significant change extends the notice period from 30 days to 60 days before a lien can be filed, giving customers more time to resolve unpaid bills before their property is encumbered.

Scope change

The bill's scope remains focused on municipal services fees and political subdivision liens, but the enforcement timeline for lien filing has been adjusted to provide a longer grace period for customers.

TIMELINE

Extended the required notice period before a political subdivision lien can be filed from 30 days to 60 days after notifying a customer of past due fees.

Substitute #2 → Substitute #3 · 4 edits

MODERATE

This bill expands the ability of Utah municipalities and special districts to place liens on property for unpaid water, sewer, and utility fees. It clarifies how interest and penalties can be charged on these debts and updates definitions related to municipal services and utility services.

Scope change

The bill now explicitly includes utility-adjacent services (storm water infrastructure maintenance) and clarifies that municipalities can bill customers directly or through third-party contractors for these services.

ENFORCEMENT

Municipalities can now place a political subdivision lien on property for past due water, sewer, or utility-related service fees, with specific notice requirements before filing.

DEFINITION

Added definition for 'utility-adjacent service' to include maintenance, construction, and improvement of storm water infrastructure performed by a city.

REQUIREMENT

Clarified that municipalities can charge interest on past due fees calculated the same way as property tax liens, and may charge either a one-time penalty (up to 8%) or administrative costs, but not both.

TECHNICAL

Corrected formatting and numbering errors in the definitions section, particularly fixing the encumbrance system definition and renumbering utility-related definitions.

Substitute #1 → Substitute #2 · 6 edits

MODERATE

This bill adds new sections authorizing municipalities to place political subdivision liens on property for unpaid water, sewer, and utility-related service fees, and modifies interest and penalty rules for special districts. The changes expand municipal enforcement options for collecting past due utility fees while standardizing how interest and administrative costs are calculated.

Scope change

The bill expands scope by adding new sections (10-6-161 and 10-6-162) that specifically authorize political subdivision liens for utility-related services, which were not explicitly covered in the original version.

ENFORCEMENT

New Section 10-6-161 authorizes municipalities to place political subdivision liens on property for unpaid water, sewer, or utility-related service fees, with specific notice requirements (30 days before lien filing, 10 days before certification to county treasurer).

New Section 10-6-162 allows municipalities to charge interest on past due utility fees calculated the same way as property tax liens, plus either a one-time penalty up to 8% or administrative costs including attorney fees.

DEFINITION

Section 10-6-106 was modified to add definitions for 'Utility' and 'Utility-adjacent service' to clarify what services can be subject to liens.

REQUIREMENT

Section 10-8-22 was modified to add requirements for advisory boards when more than 10% of retail water customers are located outside municipal boundaries, with specific representation requirements based on percentage thresholds.

Section 17B-1-902.1 was modified to clarify how special districts calculate interest rates (based on federal short-term rate plus 18 percentage points) and added provisions for administrative cost collection.

TECHNICAL

Minor formatting changes including removal of timestamp information and adjustment of line breaks in the bill text.

Municipal Services Fees and Political Subdivision Lien Amendments

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