Sponsor: new crime would target landlords who divert tenant utility payments

Representative Shonda Yates told the committee that House Bill 1404 would create the crime of "fraudulent utility conversion" for persons or entities that collect tenant payments designated for utilities and fail to remit those funds to the utility provider. "We have some I mean, $400,000 past due water bills in some instances," she said.

Senator Simmons and other members raised concerns about mens rea and the severity of penalties, noting the bill as drafted could expose property owners or corporate entities to prison terms up to 20 years for large amounts. Senator Simmons proposed adding standard criminal intent language — "knowingly, willfully, and unlawfully" — so the statute would require intentional conduct. The sponsor said she was open to a friendly amendment to add intentional-conduct language rather than a reverse repealer but also acknowledged the bill is property of the Senate.

Committee members also discussed practical scenarios: master-metered complexes, meter errors, large delayed bills, and whether landlords who legitimately hold funds but are later hit by a bill would be criminally liable. The sponsor said the bill targets money actually collected from tenants that is not held to pay utilities and not broader disputes about meter accuracy or utility billing failures. A reverse-repealer motion to allow additional work on the bill carried on a voice/show-of-hands vote; the committee later moved the bill forward after that procedural action.