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S.B. 126
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BUSINESS LICENSE FEE AMENDMENTS
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: John L. Valentine
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AN ACT RELATING TO THE MUNICIPAL CODE; MODIFYING THE BUSINESS LICENSE
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REQUIREMENTS A MUNICIPALITY MAY IMPOSE ON THE OWNER OF A RENTAL
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DWELLING; h
ESTABLISHING A STANDARD OF REVIEW FOR CERTAIN ORDINANCES;
h AND
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MAKING TECHNICAL CHANGES.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS: h
10-1-203, as last amended by Chapter 305, Laws of Utah 1997
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10-8-85.5, as enacted by Chapter 267, Laws of Utah 1997
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Be it enacted by the Legislature of the state of Utah:
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h
Section 1. Section 10-1-203 is amended to read:
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10-1-203. License fees and taxes -- Application information to be transmitted to the county
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auditor.
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(1) For the purpose of this section, "business" means any enterprise carried on for the
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purpose of gain or economic profit, except that the acts of employees rendering services to
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employers are not included in this definition.
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(2) Except as provided in Subsections (3) through (5), the governing body of a municipality
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may license for the purpose of regulation and revenue any business within the limits of the
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municipality and may regulate that business by ordinance.
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(3) (a) The governing body of a municipality may raise revenue by levying and collecting a
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municipal energy sales or use tax as provided in Part 3, Municipal Energy Sales and Use Tax Act,
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except a municipality may not levy or collect a franchise tax or fee as defined in Subsection
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10-1-303(7) on an energy supplier other than the municipal energy sales and use tax provided in Part
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3, Municipal Energy Sales and Use Tax Act.
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(b) (i) Subsection (3)(a) does not affect the validity of a franchise agreement as defined in
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Subsection 10-1-303(6), that is in effect on July 1, 1997, or a future franchise.
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(ii) A franchise agreement as defined in Subsection 10-1-303(6) in effect on January 1, 1997, or
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a future franchise shall remain in full force and effect.
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(c) A municipality that collects a contractual franchise fee pursuant to a franchise
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agreement as defined in Subsection 10-1-303(6) with an energy supplier that is in effect on July 1,
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1997, may continue to collect that fee as provided in Subsection 10-1-310(2).
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(d) (i) Subject to the requirements of Subsection (3)(d)(ii), a franchise agreement as defined in
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Subsection 10-1-303(6) between a municipality and an energy supplier may contain a provision that:
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(A) requires the energy supplier by agreement to pay a contractual franchise fee that is
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otherwise prohibited under Part 3, Municipal Energy Sales and Use Tax Act; and
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(B) imposes the contractual franchise fee on or after the day on which Part 3, Municipal
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Energy Sales and Use Tax is:
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(I) repealed, invalidated, or the maximum allowable rate provided in Section 10-1-305 is
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reduced; and
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(II) is not superseded by a law imposing a substantially equivalent tax.
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(ii) A municipality may not charge a contractual franchise fee under the provisions permitted
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by Subsection (3)(b)(i) unless the municipality charges an equal contractual franchise fee or a tax on
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all energy suppliers.
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(4) Subject to the provisions of Title 11, Chapter 26, Local Taxation of Utilities Limitation, a
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municipality may impose upon, charge, or collect from a public utility engaged in the business of
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supplying telephone service or other person or entity engaged in the business of supplying telephone
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service any tax, license, fee, license fee, license tax, or similar charge, or any combination of any of
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these, based upon the gross revenues of the utility, person, or entity derived from sales or use or both
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sales and use of the telephone service within the municipality.
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(5) (a) The governing body of a municipality may by ordinance raise revenue by levying and
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collecting a license fee or tax on [the following]:
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(i) a parking service business in an amount that is less than or equal to:
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(A) $1 per vehicle that parks at the parking service business; or
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(B) 2% of the gross receipts of the parking service business;
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(ii) a public assembly facility in an amount that is less than or equal to $1 per ticket purchased
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from the public assembly facility; and
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(iii) subject to the limitations of Subsections (5)(c) and (d), a business that causes
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disproportionate costs of municipal services or for which the municipality provides an enhanced level
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of municipal services in an amount that is reasonably related to the costs of the municipal services
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provided by the municipality.
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(b) For purposes of this Subsection (5):
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[(iii)] (i) "Municipal services" include:
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(A) public utilities; or
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(B) services for:
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(I) police;
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(II) fire;
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(III) storm water runoff;
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(IV) traffic control;
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(V) parking;
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(VI) transportation;
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(VII) beautification; or
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(VIII) snow removal.
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[(i)] (ii) "Parking service business" means a business:
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(A) that primarily provides off-street parking services for a public facility that is wholly or
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partially funded by public moneys;
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(B) that provides parking for one or more vehicles; and
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(C) that charges a fee for parking.
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[(ii)] (iii) "Public assembly facility" means a business operating an assembly facility that:
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(A) is wholly or partially funded by public moneys; and
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(B) requires a person attending an event at the assembly facility to purchase a ticket.
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(c) Before the governing body of a municipality imposes a license fee or tax on a business
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that causes disproportionate costs of municipal services under Subsection (5)(a)(iii), the governing
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body of the municipality shall adopt an ordinance defining for purposes of the tax under Subsection
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(5)(a)(iii) what constitutes disproportionate costs and what amounts are reasonably related to the
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costs of the municipal services provided by the municipality.
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(d) Before the governing body of a municipality imposes a license fee or tax on a business for
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which it provides an enhanced level of municipal services under Subsection (5)(a)(iii), the governing
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body of the municipality shall adopt an ordinance defining for purposes of the tax under Subsection
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(5)(a)(iii) what constitutes the basic level of municipal services in the municipality and what amounts
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are reasonably related to the costs of providing an enhanced level of municipal services in the
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municipality.
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(6) All license fees and taxes shall be uniform in respect to the class upon which they are
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imposed.
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(7) The governing body shall transmit the information from each approved business license
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application to the county assessor within 60 days following the approval of the application.
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(8) IF CHALLENGED IN COURT, AN ORDINANCE ENACTED BY A MUNICIPALITY BEFORE
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JANUARY 1, 1994 IMPOSING A BUSINESS LICENSE FEE OR TAX ON RENTAL DWELLINGS UNDER
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THIS SECTION SHALL BE UPHELD UNLESS THE BUSINESS LICENSE FEE OR TAX IS FOUND TO
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IMPOSE AN UNREASONABLE BURDEN ON THE FEE OR TAX PAYER.
h
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Section h [
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]
2.
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Section
10-8-85.5
is amended to read:
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10-8-85.5. "Rental dwelling" defined -- Municipality may require a business license
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or a regulatory business license and inspections -- Exception.
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(1) As used in this section, "rental dwelling" means a building or portion of a building that
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is:
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(a) used or designated for use as a residence by one or more persons; and
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(b) (i) available to be rented, loaned, leased, or hired out for a period of one month or
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longer; or
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(ii) arranged, designed, or built to be rented, loaned, leased, or hired out for a period of one
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month or longer.
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(2) (a) [Except as provided in Subsection (3), the] The legislative body of a municipality
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may by ordinance require the owner of a rental dwelling located within the municipality:
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(i) to obtain a business license pursuant to Section
10-1-203
; or[:]
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(ii) except as provided in Subsection (3):
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[(i)] (A) to obtain a regulatory business license to operate and maintain the rental dwelling;
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and
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[(ii)] (B) to allow inspections of the rental dwelling as a condition of obtaining a regulatory
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business license.
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(b) A municipality may not require an owner of multiple rental dwellings or multiple
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buildings containing rental dwellings to obtain more than one regulatory business license for the
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operation and maintenance of those rental dwellings.
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(c) Notwithstanding Subsection (2)(b), a municipality may impose upon an owner subject
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to Subsection (2)(a) a reasonable inspection fee for the inspection of each rental dwelling owned
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by that owner.
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(d) If a municipality's inspection of a rental dwelling, allowed under Subsection
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(2)(a)(ii)(B), approves the rental dwelling for purposes of a regulatory business license, a
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municipality may not inspect that rental dwelling during the next 36 months, unless the
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municipality has reasonable cause to believe that a condition in the rental dwelling is in violation
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of an applicable law or ordinance.
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(3) A municipality may not impose the requirements of Subsection (2)(a)(ii) on the owner
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of a building containing two or fewer rental dwellings.
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(4) Nothing in this section shall be construed to affect the rights and duties established
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under Title 57, Chapter 22, Utah Fit Premises Act, or to restrict a municipality's ability to enforce
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its generally applicable health ordinances or building code, a local health department's authority
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under Title 26A, Chapter 1, Local Health Departments, or the Utah Department of Health's
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authority under Title 26, Utah Health Code.
Legislative Review Note
as of 1-13-00 11:44 AM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.