SB 517

Under current law, if a municipal utility provides utility service to a property

and payment for the service is in arrears, the utility has a lien on the property and

may have arrearages inserted as a tax on the property if the following procedure is

followed. On October 15, the utility or county treasurer must provide the owner or

occupant of the property with a written notice of payment due. The notice must

specify the amount of the arrearage and any penalty and must state that: 1) if

payment is not received by November 1, an additional penalty will be assessed; and

2) if payment is not received by November 15, the arrearage amount and any

penalties will become a lien on the property that will be collected as a tax on the

property. On November 16, the utility or treasurer must certify and file with the

county clerk a list of all properties for which a notice of arrears was given and for

which arrears remain unpaid. The delinquent amount then becomes a lien upon the

property and the clerk must insert the delinquent amount and any penalties as a tax

against the property.

This bill provides that, if the municipal utility uses the arrearage collection

procedure for a rental dwelling unit and provides a notice of arrearage to the owner,

the municipality has a lien on the property of a tenant who is responsible for the

arrearage. The utility or treasurer must then certify and file with the clerk of courts

a list of those tenants. Also under this bill, if the owner pays the arrearage, the

municipality must transfer the lien to the owner.

Also under current law, if a municipal utility provides electric or water service

to a rental dwelling unit and the owner of the rental property provides the utility

with certain information, including the name and address of the tenant who is

responsible for paying for utility service, the utility may use the arrearage collection

procedure described above only if the utility follows certain additional procedures for

notifying both the owner and the tenant about any payments that are past due.

This bill allows an owner of a rental unit to request that a municipal utility

terminate electric service to a rental dwelling unit if the tenant's utility charges are

past due and the tenant has received certain notices.

This bill also permits or requires certain actions of a municipal utility, including

the following:

1) A municipal utility must refuse to establish electric utility service at a rental

dwelling unit rented by a tenant if the tenant has outstanding past-due charges for

utility service from the municipal utility, and must inform the owner of the rental

unit of the past-due charges upon the owner's request.

2) A municipal utility is not required to offer a customer who is a tenant at a

rental dwelling unit a deferred payment agreement.

3) A municipal utility may adopt application, deposit, disconnection, or

collection rules and practices that distinguish between customers based upon

whether the customer is an owner or a lessee of the property receiving utility service