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House adopts third-substitute bill allowing cities and counties to provide limited services to nonprofits
Summary
The Utah House on Feb. 8 approved a third substitute to Senate Bill 39 to allow counties, as well as cities, to provide noncash services or fee waivers to qualifying 403(c) nonprofit organizations, subject to safeguards including a 1% budget cap, public hearing and governing-body vote.
The Utah House of Representatives on Feb. 8 approved a third substitute to Senate Bill 39 to permit counties, in addition to cities, to provide certain services and fee waivers to 403(c) nonprofit organizations.
Sponsor Representative Holliday said the substitute corrects an omission in prior drafts and codifies a common practice. He told colleagues: "First of all, no cash is allowed. Only services or waivers." The bill sets three explicit safeguards: nonprofits may receive only services or fee waivers (no cash transfers); the total value of services or waivers may not exceed 1% of a county's or city's budget; and any use must be approved after public hearing and a vote by the governing body.
The change was presented as restoring statutory authority for actions that had been done informally in the past. Representative Philpott and others asked whether the provision would include churches; Holliday replied it would apply to nonprofits organized as 403(c) entities. Representative Philpott also said the amendment seeks to reverse ambiguity created by prior county-attorney precedent; Holliday said it codifies the customary practice while adding clearer statutory limits and public-process requirements.
Representative Snow later moved to reconsider the House’s prior quick action on the substitute so that fuller floor debate could occur. Members debated whether additional public scrutiny was necessary; proponents of reconsideration said the substitute had been circulated rapidly and merited more thorough discussion. After subsequent floor procedure the House returned to the measure and the third substitute passed on final tally.
The bill’s sponsor emphasized checks on potential abuse, noting the three-part limit and the requirement for public hearings. Third substitute SB 39 passed the House with the recorded tally of 52 yes and 16 no votes and was sent back to the Senate for further action.
The House record shows the bill restricts recipients to 403(c) nonprofits, bars cash transfers and requires both public notice and a governing-body vote before services or waivers are provided. It also caps the allowable assistance at 1% of the jurisdiction’s budget, a detail members discussed as beneficial for transparency and to limit potential fiscal impact.
What happens next: the bill will return to the Senate for concurrence or further floor action.
