SB 258

Under current law, a municipal utility may collect arrearages for utility service

provided to lots or parcels of real estate by providing, on October 15, a written notice

to the owner or occupant of the amount owing and in arrears. If payment is not

received by November 15, the arrearage amount and late penalties become a lien on

the property that is collected as a tax on the property. Additional requirements apply

to a municipal utility that provides water or electric service to a tenant in a rental

dwelling unit. If the owner of the unit notifies the municipal utility that the tenant

has assumed responsibility for payment for the service, the municipal utility must

provide additional notices regarding past due amounts to both the tenant and the

owner in order to collect the arrearages through a lien. Also, current law gives the

municipality a lien on the assets of each tenant who is responsible for arrears in

payments for the water or electric service. If the owner pays off the arrearage, the

municipality's lien on the assets transfers to the owner. Under the bill, an owner who

pays off an arrearage on behalf of a tenant may deduct that amount when calculating

income for state tax purposes. However, if the tenant pays the owner for all or part

of the arrearage in a subsequent taxable year, the owner must add that amount to

the owner's taxable income for that year.