Strengthening and preserving home rule through advocacy, education and collaboration. Local decisions locally made!

Troubling Bills

With two of the bills filed for 2022, SB280/HB403 and SB620/HB569, the legislature is seemingly placing business interests above quality of life for residents and visitors by forcing local governments to consider how businesses will be impacted by all proposed ordinances.

Another set of bills, SB512/HB325 would limit the fee a local government could charge for a vacation rental registration to $50. Vacation rental registration fees are not intended to generate income for a local municipality, but rather to cover the cost associated with the various required inspections and regulations intended to ensure the vacation rental property meets safety standards.

A look at SB512/HB325

SB512 and HB325 would preempt cities from licensing short-term rentals, imposing a fine for failure to register a vacation rental, and limit a municipalities vacation rental registration process including a maximum vacation rental registration fee of $50.

What’s so bad about that?

  • A property safety inspection costs more than $50, and that is just one of many components and associated costs necessary in the vacation rental registration process.
  • The vacation rental registration fees charged by a municipality are NOT profit, but simply cover the costs associated with ensuring the safety and compliance with local laws of a vacation rental property. Issues that directly impact you as a resident, business owner, or visitor.
  • If municipalities are limited to charging no more than $50 for vacation rental registration, the funds to cover the other associated costs would require tax increases.

A look at SB280/HB403

SB280 and HB403 would require local governments to publish – at their own expense – a business impact statement for ANY ordinance to be passed.

What’s so bad about that?

  • It would allow a business to go to court to challenge any proposed ordinance.
  • The challenge would immediately stop the ordinance so the business could begin work that would otherwise be adversely impacted by the ordinance if passed.
  • SB280/HB403 would require a judge to award attorney’s fees, costs, and damages to the business if they win.
  • There is no parity, so the same fees would not be awarded to a local government that wins.

How does this bill impact residents?

Let’s say, for example, to address numerous complaints from residents, the ordinance being considered by the local government would limit the hours during which professional landscaping companies could operate. If a landscaping business wanted to work during the hours that would be prohibited if the ordinance was passed, the owner of the company need only file a challenge in court which would stay the enactment of the ordinance but not limit the landscapers. As a result, residents’ quality of life would continue to be negatively impacted so the landscaping business could maximize the number of customers it could service in a day. And the local government, whether it prevails or not, would still have to at least pay costs and fees associated with defending the legitimacy of the ordinance. The added expense from conducting a business impact study for each proposed ordinance and defending against challenges will result in increases to your ad valorem taxes.

A look at SB620/HB569

SB620/HB569 would allow a business to sue a local government for profit loss due to an ordinance.

What’s so bad about that?

  • The mandate allows a business claiming a profit loss of 15% or more to sue a local government if the business owner claims the loss of profit is due to an ordinance.
  • It provides a lot of detail regarding how a court would have to award damages to the business as well as how to award attorney’s fees and costs, if the business wins the lawsuit.
  • It doesn’t provide any detail about how the business would be required to prove the profit loss was entirely the result of the ordinance.

How does this bill impact residents?

Because, like SB280/HB403, local governments would have to increase your ad valorem taxes to pay to defend against lawsuits. Those costs to the local government will go up if a judge rules in favor of the business suing your local government.

Why are legislators doing this?

Legislators claim a purpose of the mandates is to force local governments to be more cautious in passing ordinances. In reality, they are attempts by state lawmakers to preempt local governments in favor of business interests.

And none of the costs can be budgeted, since it’s impossible to predict how many ordinances would be considered each year or how many businesses would challenge an ordinance.

Added costs leading to increased ad valorem taxes isn’t the only way a municipality would suffer. The need to take these costly extra measures to enact ordinances could have a “chilling” effect on some municipalities where added costs and increased taxes are not realistic or possible so instead local elected officials would not enact ordinances, which would negatively impact the municipality’s residents, businesses, and visitors.