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House adopts changes to special service district collection rules, bars passing old water/sewer arrearages to new owners
Summary
House passes third substitute House Bill 56 to prevent special service districts from refusing water or sewer to a new owner because of a prior owner's arrearage (absent a valid lien); an amendment to raise a $200 collection cap to $500 failed.
The Utah House passed the third substitute of House Bill 56 on Friday to correct unintended consequences in local collection and utility practices and to protect new homeowners from being denied water or sewer service because of prior owners' unpaid bills.
Representative Mascaro told colleagues the bill "prohibits the special districts and local districts from refusing to furnish water or sewer services to properties based on an arrearage from a previous owner, absent a valid lien." The sponsor said the change protects purchasers who completed closing and paid required fees but then found utility turn‑on withheld due to earlier arrearages.
Representative Murray offered an amendment to increase a statutory maximum collection cost from $200 to $500, arguing some arrearages can exceed $500 over a two‑month period; Representative Clark opposed that amendment, contending the $200 cap was adequate for the special lien certification process. The House rejected Murray's amendment by roll call. The third substitute then passed the House 52‑19 and will be forwarded to the Senate.
The bill's sponsors said stakeholders including title companies, the mortgage industry, special service districts, and real estate representatives participated in drafting corrections intended to prevent unintended harms to buyers and local governments.
