Senator Lincoln Fillmore proposes the following substitute bill:


1     
AUTOMATIC LOCAL DISTRICT WITHDRAWAL

2     
AMENDMENTS

3     
2019 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Lincoln Fillmore

6     
House Sponsor: Robert M. Spendlove

7     

8     LONG TITLE
9     General Description:
10          This bill addresses the automatic withdrawal of an area from a local district in the case
11     of certain annexations.
12     Highlighted Provisions:
13          This bill:
14          ▸     provides for the automatic withdrawal of an area from a local district in the case of
15     certain annexations; and
16          ▸     makes technical and conforming changes.
17     Money Appropriated in this Bill:
18          None
19     Other Special Clauses:
20          None
21     Utah Code Sections Affected:
22     AMENDS:
23          17B-1-503, as last amended by Laws of Utah 2014, Chapter 156
24     

25     Be it enacted by the Legislature of the state of Utah:

26          Section 1. Section 17B-1-503 is amended to read:
27          17B-1-503. Withdrawal or boundary adjustment with municipal approval.
28          (1) A municipality and a local district whose boundaries adjoin or overlap may adjust
29     the boundary of the local district to include more or less of the municipality, including the
30     expansion area identified in the annexation policy plan adopted by the municipality under
31     Section 10-2-401.5, in the local district by following the same procedural requirements as set
32     forth in Section 17B-1-417 for boundary adjustments between adjoining local districts.
33          (2) (a) Notwithstanding any other provision of this title, a municipality annexing all or
34     part of an unincorporated island or peninsula under Title 10, Chapter 2, Classification,
35     Boundaries, Consolidation, and Dissolution of Municipalities, that overlaps a municipal
36     services district organized under Title 17B, Chapter 2a, Part 11, Municipal Services District
37     Act, may petition to withdraw the area from the municipal services district in accordance with
38     this Subsection (2).
39          (b) For a valid withdrawal described in Subsection (2)(a):
40          (i) the annexation petition under Section 10-2-403 or a separate consent, signed by
41     owners of at least 60% of the total private land area, shall state that the signers request the area
42     to be withdrawn from the municipal services district; and
43          (ii) the legislative body of the municipality shall adopt a resolution, which may be the
44     resolution adopted in accordance with Subsection 10-2-418(5)(a), stating the municipal
45     legislative body's intent to withdraw the area from the municipal services district.
46          (c) The board of trustees of the municipal services district shall consider the
47     municipality's petition to withdraw the area from the municipal services district within 90 days
48     after the day on which the municipal services district receives the petition.
49          (d) The board of trustees of the municipal services district:
50          (i) may hold a public hearing in accordance with the notice and public hearing
51     provisions of Section 17B-1-508;
52          (ii) shall consider information that includes any factual data presented by the
53     municipality and any owner of private real property who signed a petition or other form of
54     consent described in Subsection (2)(b)(i); and
55          (iii) identify in writing the information upon which the board of trustees relies in
56     approving or rejecting the withdrawal.

57          (e) The board of trustees of the municipal services district shall approve the
58     withdrawal, effective upon the annexation of the area into the municipality or, if the area
59     municipality has already annexed the area, as soon as possible in the reasonable course of
60     events, if the board of trustees makes a finding that:
61          (i) (A) the loss of revenue to the municipal services district due to a withdrawal of the
62     area will be offset by savings associated with no longer providing municipal-type services to
63     the area; or
64          (B) if the loss of revenue will not be offset by savings resulting from no longer
65     providing municipal-type services to the area, the municipality agreeing to terms and
66     conditions, which may include terms and conditions described in Subsection 17B-1-510(5), can
67     mitigate or eliminate the loss of revenue;
68          (ii) the annexation petition under Section 10-2-403, or a separate petition meeting the
69     same signature requirements, states that the signers request the area to be withdrawn from the
70     municipal services district; or
71          (iii) the following have consented in writing to the withdrawal:
72          (A) owners of more than 60% of the total private land area; or
73          (B) owners of private land equal in assessed value to more than 60% of the assessed
74     value of all private real property within the area proposed for withdrawal have consented in
75     writing to the withdrawal.
76          (f) If the board of trustees of the municipal services district does not make any of the
77     findings described in Subsection (2)(e), the board of trustees may approve or reject the
78     withdrawal based upon information upon which the board of trustees relies and that the board
79     of trustees identifies in writing.
80          (g) (i) If a municipality annexes an island or a part of an island before May 14, 2019,
81     the legislative body of the municipality may initiate the withdrawal of the area from the
82     municipal services district by adopting a resolution that:
83          (A) requests that the area be withdrawn from the municipal services district; and
84          (B) a final local entity plat accompanies, identifying the area proposed to be withdrawn
85     from the municipal services district;
86          (ii) (A) Upon receipt of the resolution and except as provided in Subsection
87     (2)(g)(ii)(B), the board of trustees of the municipal services district shall approve the

88     withdrawal.
89          (B) The board of trustees of the municipal services district may reject the withdrawal if
90     the rejection is based upon a good faith finding that lost revenues due to the withdrawal will
91     exceed expected cost savings resulting from no longer serving the area.
92          (h) (i) Based upon a finding described in Subsection (e) or (f):
93          (A) the board of trustees of the municipal services district shall adopt a resolution
94     approving the withdrawal; and
95          (B) the chair of the board shall sign a notice of impending boundary action, as defined
96     in Section 67-1a-6.5, that meets the requirements of Subsection 67-1a-6.5(3).
97          (ii) The annexing municipality shall deliver the following to the lieutenant governor:
98          (A) the resolution and notice of impending boundary action described in Subsection
99     (2)(g)(i);
100          (B) a copy of an approved final local entity plat, as defined in Section 67-1a-6.5; and
101          (C) any other documentation required by law.
102          (i) (i) Once the Lieutenant Governor has issued an applicable certificate, as defined in
103     Section 67-1a-6.5, the municipality shall deliver the certificate, the resolution and notice of
104     impending boundary action described in Subsection (2)(h)(i), the final local entity plat, as
105     defined in Section 67-1a-6.5, and any other document required by law, to the recorder of the
106     county in which the area is located.
107          (ii) After the municipality makes the delivery described in Subsection (2)(i)(i), the
108     area, for all purposes, is no longer part of the municipal services district.
109          (j) The annexing municipality and the municipal services district may enter into an
110     interlocal agreement under Title 11, Chapter 13, Interlocal Cooperation Act, stating:
111          (i) the municipality's and the district's duties and responsibilities in conducting a
112     withdrawal under this subsection (2); and
113          (ii) any other matter respecting an unincorporated island that the municipality
114     surrounds on all sides.
115          [(2)] (3) After a boundary adjustment under Subsection (1) or a withdrawal under
116     Subsection (2) is complete:
117          (a) the local district shall, without interruption, provide the same service to any area
118     added to the local district as provided to other areas within the local district; and

119          (b) the municipality shall, without interruption, provide the same service that the local
120     district previously provided to any area withdrawn from the local district.
121          [(3)] (4) No area within a municipality may be added to the area of a local district
122     under this section if the area is part of a local district that provides the same wholesale or retail
123     service as the first local district.