H.B. 425 Local Government Fees Amendments: transcript

house bill 4 25. Thank, Thank you. This on? Okay. Yeah. Um, so you've heard this bill before, so I can be brief. Um, so this is a bill related to, um, transportation utility fees. So you may feel like we have, uh, you know, been, been here before. We are, we have a good agreement at this point with this bill moving forward. So let me just give you a really brief, uh, reminder about what this bill is and why we have it. So for over a decade, we've had cities, um, in our state charging transportation utility fees, and there have not been any rules around those fees. So, um, what this bill does is it sets up a framework, um, for how we, uh, as determine that a fee is reasonable, um, and then, um, how we can make sure that the public has some transparency around that fee. So, um, the first thing it does is it precludes, um, charging general fees for broadband and public safety. That came from conversations during the interim about not wanting to proliferate fees. The second thing it does, um, is it creates a process for the fees to be adopted, um, including making sure we have a good study to show the nexus between the user and what the fee is. Then after that study is completed, they have to go through a very public process, um, create a restricted account, decide what predetermined uses are gonna happen with that fee. And then, um, the city, um, has to, um, go through, uh, every 10 years this fee expires, which is, will be the first fee we have in code that will expire. Um, and then, um, after, if they wanna do it again in 10 years, they'll have to go through the whole process again. So that was a very sporadic presentation, but you have heard this bill a couple of times, so I don't want to take too much time. So I'll just be open to any questions at this point. Say, we haven't heard this exact bill, but we've heard very close. So pretty close, 95%, you've heard this Bill that last 5% compromise from last year, right? Yep. Mm-hmm. Okay. Appreciate that.

Good morning, Mr. Chair and the committee, Billy Hesterman with the Utah Taxpayers Association. We support the bill. We think it's a good compromise on the many issues that we've worked on over the years for this, and hope you'll move it forward. Thank you.

Chair Cameron, deal, executive director of the Utah Good Cities and towns. And I wanna thank Representative Peterson, but also all the other stakeholders. It's been a collaborative effort and the bill before you has our support. Thank you.

Thank you, Mr. Chair. Miranda Jones. Cox Wasatch Front Regional Council. WFRC is also very supportive of this bill because it sets good process in place, but also because providing transportation funding choices for local governments is very important, particularly as Utah continues to grow. Thank You. Thank you.

Checking to make sure we don't have any subs or anything like that. We're good? Nope, it's good to go. Okay.

I would move that we recommend favorably HB 4 25. Okay. Just like to speak to that. Yeah. Just real quick, I've, I've seen, uh, Representative Peterson worked through this for three years. Um, you know, I've been, uh, silently in the room when she's been negotiating through some things that are very difficult. And I've been on the other side of this, on the Senate side to change some, some leverage points on it. And I'm happy to see where it's landed. I think that it's brought, it's been a very difficult process and her ability to negotiate that has been, uh, really remarkable. And, um, and so I'm happy to be the floor sponsor of this one on the Senate side. And so I would recommend favorably this bill, uh, just, it, it's good policy and it's found a good place, so thank you.

Uh, I, I just really appreciate everyone has really, um, leaned in on this bell. Um, and, and so we are to the point now where it is supported by everyone you heard, and also our non-profit religious entities. So thanks. Okay. Thank you very much. Well, this policy started out as a straight ban like three or four years ago and has come a long way. Unfortunately, we got very permissive and the reason we got permissive is 'cause the Supreme Court gave a bunch of permission to do this. I'm not a hundred percent convinced that this is a constitutional method, but at the end of the day, uh, here we are. Uh, but I appreciate, I appreciate the long effort to, to get this done. And thank you for working with Senator Brammer. Someone needs to, okay. Uh, I'm just kidding.

go ahead. Thank You so much. So, um, it's on closer. It is on. I Don't know how close I can get this. Let me, Hmm. You are on. And How about now? Okay. I had to push the button. Okay. Okay. Alright. Um, how's Bill 4 25? This may feel familiar to you if you've been here for a minute. Um, so this is a bill I ran. Um, actually this is round three, but we have a good agreement at this point. Um, the first year we thought we had an agreement right until the end, and then time ran out. And then last year we were still negotiating. So this year we have a great agreement on this bill. So let me just talk you through why I started working on this issue. And probably in March of 2023, probably, um, the Utah Supreme Court ruled that cities that were charging transportation utility fees, those fees were challenged. Um, and it went clear to the Utah Supreme Court for them to discuss, um, is it transportation utility fee, a fee, or is it really a tax that cities are charging a fee? And when clear to the Utah Supreme Court, the Utah Supreme Court said these fees are fees, the question that they remanded back to the lower court was, how do you come up with a reasonable fee? And that question, um, was never answered by the course because, um, the people dropped their suit. And so that question kind of came to us as legislators to think about what is the process we need to create? So when a community decides to charge a transportation utility fee, that that process is reasonable, that there's a close nexus to the, to the use, um, the user, and how much they're impacting the system. And also, um, to how much the fee, um, that is charged. So this, uh, bill has been the work of a, a lot of groups. The League of Cities and Towns, the Utah Taxpayers Associations, Libertas Wasatch for Regional Council. Uh, many others have helped me come up with this process. Also, I've presented a couple times in interim committees and taken feedback from legislators on trying to put this bill together. So let me first walk through, um, what the bill does. So first, um, the bill precludes charging general fees for broadband and public safety. So as we were having these conversations about transportation utility fees, there was a concern like, how many things are that cities do should be fees? And as we talked through that, there was general consensus that things like broadband and public safety are not things that you can set a reasonable fee on, that they have just broad use. Um, and so, um, they're a little trickier. For example, we benefit from the fact that there's a police department even if we never call them. Right? Um, there's just kind of a general benefit. So one of the things that we talked about, um, was prohibiting some of these general fees specifically for public safety. Um, and for broadband. Um, I don't know, I, I get the question quite often. Does this impact utopia? It does not because you're still paying for your use. This is if someone just wanted to charge a general fee for broadband, which we're not aware of any actually doing that. Um, but some have been proposed. The second thing the bill does is if you decide to impose a transportation utility fee, you first have to conduct a study. So you have to do almost like an impact fee study. You have to, um, look at your system. You have to take traffic counts, you have to use, um, the standard manuals on how much transportation, you know, uh, transportation impact, all of those things. Um, and you have to conduct this study. You cannot supplant existing funding with your fee, and you have to create a differentiated fee schedule for different types of users. And all users have to pay in because it is a user fee. So, um, once the study is complete, then the city goes through a very public process. They have to have a public hearing, they have to, um, make their decision in, in, um, a public meeting. Um, they have to take a separate vote for this. They can't, uh, adopt this fee. And, and when they do their consolidated fee schedule, this is a standalone fee. Um, and they have to have a dedicated account for this fee, um, and with only predetermined allowable uses for that account. So they have to say, these are the kind of things we're funding in our transportation system with this fee, and then they can only fund those things. Um, so that also is part of the thing. Um, the third is after the fee is implemented, they have to do an annual review to keep demonstrating that there's a reasonable relationship between this fee and the service provided. Um, this fee is subject to referendum. So if, uh, a com a community imposed a fee and, and the, um, community didn't agree, it's still subject to referendum and it is part of the city's annual audit. Um, and finally, this is the first fee we'll have in code that expires. Um, that was one of the concerns that actual legislators raised the first time we ever talked about this bill, is once you have a fee, it never goes away. And, um, as we talked about the importance, especially for this fee, to have that nexus between the user and their impact, if you're using a study that's over 10 years old and you're in a community, um, that, especially a community that is growing, like you can't reasonably use that study for that long and still justify your fee. So, um, this says that, um, the fee expires every 10 years and, um, they would have to go through the process, including doing the study again to set the fee. So, um, that's what the bill does. Um, and I'm happy to take any questions.

Thank you, Mr. Chair. Um, thank you for your presentation. I just have a question on lines 2 55 to 2 57, the governing body vote on the imposition or, um, increase of a transportation utility fee shall be separate from the governing body vote on the city budget, or any other item. Can you explain what that means? Can you please?

Yes. So, um, you know, when you're on the city council, um, or you're, um, on the city council, you have to take to two kind of important votes. Uh, each year, you know, the, the vote to set your budget right and the vote to do your consolidated fee schedule. So that's like, how much am I gonna charge to rent the Bowery at the park? How much are what, what are all my other fees that not everyone pays? But if you did certain things, you'd have to pay. How much is our garbage rate, for example? That's all in your consolidated fee schedule. What we're saying is you can't just tuck this fee in on that list. You have to vote on it separately. You have to tell your public you're doing this and you have to vote on it separately, uh, in a standalone vote.

Thank you so much. Mm-hmm.

Good afternoon, Mr. Chair and members of the committee. Cameron Dale, executive director of the Utah League of Cities and Towns. First, I wanna applaud Representative Peterson. Uh, this has been a three year effort of significant deliberation, uh, and I'm pleased to sit before you and say the league is supportive of this bill. I also want to thank the different stakeholders. She mentioned some of them, um, and then there are others as well, who, uh, we all came together and we, uh, collaborated and co-labor together, uh, to come up with a solution that addressed all of our principles. Ultimately, from a local government perspective, what we were trying to accomplish was to preserve that legal authority for city councils, to have those communications with their public, and ultimately, when appropriate, impose a transportation utility fee and follow a process that was transparent, that was difficult, but doable, um, and do so in a way that would help local governments, uh, maintain and preserve their transportation system, uh, but do so in a way that respected the positions of the other stakeholders. And I thank Representative Peterson for her efforts, bringing everyone together. We support the bill. Thank you.

Allen Dayton, Intermountain Health. It's a pleasure to be here. We support this bill. We think a lot of great work's gone into it. Uh, our fees for business licensing are generally from zero to $800, but one of them crept up to $22,000, and it was as a result of this Pleasant Grove case. But now it sounds like we're getting this under control. So we appreciate this effort and this bill. So thank you.

Hi. Thank you. Uh, Miranda Jones, Cox, uh, Wasatch Front Regional Council Government Affairs. Uh, just want to express our support for this bill and thank Representative Peterson for her diligence, uh, in, in working on this over the past several years. Um, WFRC is supportive of this legislation for two main reasons. One of those reasons is because we believe that investing in Utah's transportation system is critical. It's important for our mobility, it's important for our air quality and for our quality of life. Uh, and we think that providing or maintaining local government's ability to continue to invest in their transportation system is key. And then second, and as, uh, you know, Cameron mentioned, and as Representative Peterson mentioned, we believe that this bill provides good process around the implementation of these fees, and then ensuring that there's trans, uh, that there is, um, sorry, we're, we're, we're appreciative of the good process and that the fee is tied to reason reasonability. So thank you, Representative Peterson. Thank you very

Thank you, Mr. Chair. Uh, I move that we, uh, favorably recommend House Bill 4 25.

I would, um, thank you, Mr. Chair and, and want to thank Representative Peterson. I remember, gosh, probably three years ago in interim meetings, uh, when you first brought this forward. And I was still a little skeptical about, you know, where, where these guardrails were set and whether we were really, um, opening up a door kind of Pandora's box that we didn't necessarily want to, to open that maybe it would be better leaving it a little more, uh, nebulous, uh, so that cities weren't going out and charging more of these fees. But as I've seen her do this work over the last three years, I've just been thoroughly impressed with, um, where we've gotten to. I think this is really good legislation, uh, provides a great framework and is very thoughtful in the way that has been presented. And I have to say, it, it, you know, probably more than any other bill, I've, I've, uh, seen this session. I've gotten text messages from city leaders, um, that have reached out and just almost gushed over, uh, the work that Representative Peterson has done here. And being able to bring all of these stakeholders to the table, listen to their concerns, and come up with a compromise that everyone can live with. And that, that is very unique. Um, especially knowing that she probably didn't need to do that, that she probably could have just moved this forward in the last couple of years and got it passed. So, appreciate the great work on this, and happy to, to see it move to the floor.

Thank you, Mr. Chair. I too agree with, um, a representative from South Jordan, South Jordan, who, um, who, who, uh, expressed this in such a better way than I ever could have. I reached out to my city council member and he says he probably would not use it, but he's so grateful to have that tool available. So thank you.

Uh, I appreciate, um, the comments. You know, the interesting thing about this is, you know, this fee's out there, cities are charging in, and, and I think that helping them have these guardrails is good for everyone. It's good for them, it's good for their, their constituents. And so I appreciate the support. Thank you.

Representative. I'm Corinne Peterson. Thank you, speaker. Um, so this bill, you may feel familiar because we have seen it before. Um, we've been negotiating for a bit of time and we have an agreement on this bill, so we're gonna be moving it forward now. Um, so for over a decade, we've had about a dozen communities in our state that have charged what's called a transportation utility fee. Uh, it's a fee that appears on your utility, um, bill, and it covers impact on roads. That fee was challenged and that challenge went clear to the Utah Supreme Court, where the Utah Supreme Court did rule that cities do have the ability to charge these fees so long as they're differentiated. Um, but they remanded the question back to the lower court on how do you determine what a reasonable fee should be? What should that process be like? So we, we brought a group together to have that conversation and set some guardrails around these fees. Right now it's a little bit the wild west on these fees. Um, so this bill sets up some guardrails and some protections for taxpayers, um, related to these fees. So the, the first thing that this bill does is it says some fees really are going to be precluded specifically around, um, broadband. This does not impact utopia models, but if a, a city specifically was charging a general fee for broadband, it would preclude that from happening. And general fees around public safety. So, um, just charging a fee because you have a police department is not allowed. This still allows 9 1 1 fees. Um, some of our volunteer firemen, uh, they have a fee for that. Those, those are still allowable, but that's the first thing that, uh, that this does. The second thing is that it creates, um, and this is the bulk of the bill, it creates a process whereby cities have to go through if they're going to consider this a very public process, um, where they have to do a study to actually show the impact, they have to differentiate the fees between different user types. So think about, um, that a Costco gets a lot more impact than a residential user. There has to be differentiation between those fees and they have to have kind of a predetermined, allowable use list to be able to tie that impact to how they anticipate spending the money. This fee will, um, be, um, available to be referendum if the community doesn't agree, they can file a referendum. Um, part of the annual audit, and this is actually the first fee we've ever put in code that expires. One of the concerns I heard, um, is once a city starts charging a fee, the fee never goes away. And so, um, this bill puts in that the fee, um, does go away. Uh, it, the, the fee is only good for about 10 years after you go through this process. And then if the city wants to continue to charge that fee, they have to start at the beginning and go through the whole process with the study and their public again. So the idea is to make this difficult enough that, um, it doesn't happen in every city. It happens where this specific instance makes sense. Um, but also, um, in those cities where they are highly impacted because of the amount of property owned by people who do not pay property tax, um, it can be considered. So that's the bill. Um, and with that I'm open to any questions.

Thank you Mr. Speaker. I rise in support of this bill. When I, um, when I learned about it and read about it, I was so impressed with how much work she had done on the bill and I hope that we all support it.

Um, thank you colleagues. I'd appreciate your support. I appreciated the people that have worked with me on this issue for, uh, a number of years. Um, so this bill at this point is supported by the League of Cities and Towns. It's also supported by the Taxpayers Association. Bertus who brought the original suit has, uh, is neutral on the bill and, um, our religious, um, nonprofit communities are also comfortable with the bell. So I'd ask for your support.

has its own issues. However, this is the reality before us at this point. Um, this bill removes the charge of general fees for things like broadband and public safety, which need to be charged through taxes and not through a fee. Um, and then it also creates a process for adoption and implementation of those fees. And it includes a 10 year expiration date for these fees. Like our current wrap tax model. Um, it changes the fee schedule and will not change surcharges for 9 1 1 or emergency type of calls. And it does not have an impact on the current utopia or connect models. Um, this bill has come forward with the support of the Utah Taxpayers Association, the Wasatch Front Regional Council and the League of Cities and Towns. Uh, there has been a good compromised reach with the LDS church with regards to these transportation utility fees, um, specifically as how, how the, the transportation studies are done when they're done so that it's accurately capturing the actual, uh, the actual issues with, uh, transportation burden, uh, related to church use and things like that. And so with that, I'm open to any questions.

Uh, I think the sponsor has, uh,

Thank you. Uh, so what this does, this re this revol resolves a lot of the issues with transportation utility fees. Uh, it does remove the general fees for broadband and public safety, which makes a lot of sense because it's hard to charge a fee for, uh, that's, that's based on usage of public safety. Um, that's just not a doable thing. And so this makes a lot of sense in that way. Uh, it also, uh, changes the fee schedule and will not charge surcharges for 9 1 1 or emergency type calls. Uh, it's come forward with the support of the Utah Taxpayers Association, the Wasatch Front Regional Council, the League of Cities and Towns. And they've found a good compromise with, uh, the LDS church as to how these transportation utility fees will impact, uh, nonprofit properties. And with that, I'm open to any questions. Senator Brammer open for questions on the bill. Again, a lot of work's been done on this bill. Yep.

Uh, thank you. This is three years in the making. We're hoping to, to land it and, and be done with it. So, uh, I'll move that this bill pass. Thank you. Thank