Bill requiring franchise fee public hearing advances

April 23, 2015

A House subcommittee on Wednesday passed House Study Bill 245, which requires cities to hold a public hearing before instituting a new franchise fee. No opposition was raised and the bill moved forward. The bill is expected to move through the full Ways and Means Committee. The franchise fees collected by cities on natural gas and electric utilities has received scrutiny in the last few years due to a court case in Des Moines arguing the use of franchise fees were unlawful. Following property tax reforms implemented two years ago many cities turned to franchise fees to raise additional revenue to offset revenue lost from reduced property taxes.