H.B. 453

1

ASSESSMENT AREA AMENDMENTS
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Fred R. Hunsaker
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill modifies provisions relating to assessment areas.
10 Highlighted Provisions:
11 This bill:
12 . modifies definitions;
13 . clarifies which improvements a notice of a proposed designation resolution or
14 ordinance may make provision for;
15 . modifies which owners of property may file a protest to a proposed assessment area
16 or assessment;
17 . modifies the conditions under which a local entity may designate an assessment
18 area;
19 . modifies the conditions under which a local entity may add to a designated
20 assessment area;
21 . modifies items that can be included in the levy of an assessment;
22 . modifies the possible makeup of a board of equalization for assessment purposes;
23 . specifies a time within which a board of equalization must mail a copy of the
24 board's final report;
25 . allows local entity to publish a summary of an adopted assessment resolution or
26 ordinance rather than the resolution or ordinance itself;
27 . modifies a provision relating to an amendment of an assessment resolution or

28 ordinance that results in an increase of an assessment;
29 . includes capitalized interest in the items for which proceeds of bond anticipation
30 notes may be used;
31 . authorizes a local entity to include interest accruing on bond anticipation notes in
32 the cost of improvements;
33 . includes assessments in the list of items from which warrants or bond anticipation
34 notes are to be paid;
35 . modifies a provision relating to how assessment bonds are to be issued;
36 . includes interim warrants in a provision requiring the local entity to provide for the
37 retirement of the obligation; and
38 . makes technical changes.
39 Monies Appropriated in this Bill:
40 None
41 Other Special Clauses:
42 None
43 Utah Code Sections Affected:
44 AMENDS:
45 11-42-102, as enacted by Laws of Utah 2007, Chapter 329
46 11-42-202, as enacted by Laws of Utah 2007, Chapter 329
47 11-42-203, as enacted by Laws of Utah 2007, Chapter 329
48 11-42-205, as enacted by Laws of Utah 2007, Chapter 329
49 11-42-207, as enacted by Laws of Utah 2007, Chapter 329
50 11-42-301, as enacted by Laws of Utah 2007, Chapter 329
51 11-42-401, as enacted by Laws of Utah 2007, Chapter 329
52 11-42-403, as enacted by Laws of Utah 2007, Chapter 329
53 11-42-404, as enacted by Laws of Utah 2007, Chapter 329
54 11-42-410, as enacted by Laws of Utah 2007, Chapter 329
55 11-42-602, as enacted by Laws of Utah 2007, Chapter 329
56 11-42-603, as enacted by Laws of Utah 2007, Chapter 329
57 11-42-605, as enacted by Laws of Utah 2007, Chapter 329
58 11-42-702, as enacted by Laws of Utah 2007, Chapter 329

59
60 Be it enacted by the Legislature of the state of Utah:
61 Section 1. Section 11-42-102 is amended to read:
62 11-42-102. Definitions.
63 (1) "Adequate protests" means timely filed, written protests under Section 11-42-203
64 that represent at least 50% of the frontage, area, taxable value, fair market value, lots, number
65 of connections, or equivalent residential units of the property proposed to be assessed,
66 according to the same assessment method by which the assessment is proposed to be levied,
67 after eliminating:
68 (a) protests relating to:
69 (i) property that has been deleted from a proposed assessment area; or
70 (ii) an improvement that has been deleted from the proposed improvements to be
71 provided to property within the proposed assessment area; and
72 (b) protests that have been withdrawn under Subsection 11-42-203 (3).
73 (2) "Assessment area" means an area, or, if more than one area is designated, the
74 aggregate of all areas within a local entity's jurisdictional boundaries that is designated by a
75 local entity under Part 2, Designating an Assessment Area, for the purpose of financing the
76 costs of improvements, operation and maintenance, or economic promotion activities that
77 benefit property within the area.
78 (3) "Assessment bonds" means bonds that are:
79 (a) issued under Section 11-42-605 ; and
80 (b) payable in part or in whole from assessments levied in an assessment area,
81 improvement revenues, and a guaranty fund or reserve fund.
82 (4) "Assessment fund" means a special fund that a local entity establishes under
83 Section 11-42-412 .
84 (5) "Assessment lien" means a lien on property within an assessment area that arises
85 from the levy of an assessment, as provided in Section 11-42-501 .
86 (6) "Assessment method" means the method by which an assessment is levied against
87 property, whether by frontage, area, taxable value, fair market value, lot, number of
88 connections, equivalent residential unit, or any combination of these methods.
89 (7) "Assessment ordinance" means an ordinance adopted by a local entity under

90 Section 11-42-404 that levies an assessment on benefitted property within an assessment area.
91 (8) "Assessment resolution" means a resolution adopted by a local entity under Section
92 11-42-404 that levies an assessment on benefitted property within an assessment area.
93 (9) "Benefitted property" means property within an assessment area that directly or
94 indirectly benefits from improvements, operation and maintenance, or economic promotion
95 activities.
96 (10) "Bond anticipation notes" means notes issued under Section 11-42-602 in
97 anticipation of the issuance of assessment bonds.
98 (11) "Bonds" means assessment bonds and refunding assessment bonds.
99 (12) "Commercial area" means an area in which at least 75% of the property is devoted
100 to the interchange of goods or commodities.
101 (13) "Connection fee" means a fee charged by a local entity to pay for the costs of
102 connecting property to a publicly owned sewer, storm drainage, water, gas,
103 [telecommunications] communications, or electrical system, whether or not improvements are
104 installed on the property.
105 (14) "Contract price" means:
106 (a) the cost of acquiring an improvement, if the improvement is acquired; or
107 (b) the amount payable to one or more contractors for the design, engineering,
108 inspection, and construction of an improvement.
109 (15) "Designation ordinance" means an ordinance adopted by a local entity under
110 Section 11-42-206 designating an assessment area.
111 (16) "Designation resolution" means a resolution adopted by a local entity under
112 Section 11-42-206 designating an assessment area.
113 (17) "Economic promotion activities" means activities that promote economic growth
114 in a commercial area of a local entity, including:
115 (a) sponsoring festivals and markets;
116 (b) promoting business investment;
117 (c) helping to coordinate public and private actions; and
118 (d) developing and issuing publications designed to improve the economic well-being
119 of the commercial area.
120 (18) "Equivalent residential unit" means a dwelling, unit, or development that is equal

121 to a single-family residence in terms of the nature of its use or impact on an improvement to be
122 provided in the assessment area.
123 (19) "Governing body" means:
124 (a) for a county, city, or town, the legislative body of the county, city, or town;
125 (b) for a local district, the board of trustees of the local district; and
126 (c) for a special service district:
127 (i) the legislative body of the county, city, or town that established the special service
128 district, if no administrative control board has been appointed under Section 17A-2-1326 ; or
129 (ii) the administrative control board of the special service district, if an administrative
130 control board has been appointed under Section 17A-2-1326 .
131 (20) "Guaranty fund" means the fund established by a local entity under Section
132 11-42-701 .
133 (21) "Improved property" means property proposed to be assessed within an
134 assessment area upon which a residential, commercial, or other building has been built.
135 (22) "Improvement":
136 (a) means any publicly owned infrastructure, system, or other facility that:
137 [(a)] (i) a local entity is authorized to provide; or
138 [(b)] (ii) the governing body of a local entity determines is necessary or convenient to
139 enable the local entity to provide a service that the local entity is authorized to provide[.]; and
140 (b) includes facilities in an assessment area, including a private driveway, an irrigation
141 ditch, and a water turnout, that:
142 (i) can be conveniently installed at the same time as an infrastructure, system, or other
143 facility described in Subsection (22)(a); and
144 (ii) are requested by a property owner on whose property or for whose benefit the
145 infrastructure, system, or other facility is being installed.
146 (23) "Improvement revenues":
147 (a) means charges, fees, impact fees, or other revenues that a local entity receives from
148 improvements; and
149 (b) does not include revenue from assessments.
150 (24) "Incidental refunding costs" means any costs of issuing refunding assessment
151 bonds and calling, retiring, or paying prior bonds, including:

152 (a) legal and accounting fees;
153 (b) charges of [fiscal agents] financial advisors, escrow agents, certified public
154 accountant verification entities, and trustees;
155 (c) underwriting discount costs, printing costs, the costs of giving notice;
156 (d) any premium necessary in the calling or retiring of prior bonds;
157 (e) fees to be paid to the local entity to issue the refunding assessment bonds and to
158 refund the outstanding prior bonds;
159 (f) any other costs that the governing body determines are necessary or desirable to
160 incur in connection with the issuance of refunding assessment bonds; and
161 (g) any interest on the prior bonds that is required to be paid in connection with the
162 issuance of the refunding assessment bonds.
163 (25) "Installment payment date" means the date on which an installment payment of an
164 assessment is payable.
165 (26) "Interim warrant" means a warrant issued by a local entity under Section
166 11-42-601 .
167 (27) "Jurisdictional boundaries" means:
168 (a) for a county, the boundaries of the unincorporated area of the county; and
169 (b) for each other local entity, the boundaries of the local entity.
170 (28) "Local district" means a local district under Title 17B, Limited Purpose Local
171 Government Entities - Local Districts.
172 (29) "Local entity" means a county, city, town, special service district, [or] local
173 district, or other political subdivision of the state.
174 (30) "Local entity obligations" means assessment bonds, refunding assessment bonds,
175 interim warrants, and bond anticipation notes issued by a local entity.
176 (31) "Mailing address" means:
177 (a) a property owner's last-known address using the name and address appearing on the
178 last completed real property assessment roll of the county in which the property is located; and
179 (b) if the property is improved property:
180 (i) the property's street number; or
181 (ii) the post office box, rural route number, or other mailing address of the property, if
182 a street number has not been assigned.

183 (32) "Net improvement revenues" means all improvement revenues that a local entity
184 has received since the last installment payment date, less all amounts payable by the local entity
185 from those improvement revenues for operation and maintenance costs.
186 (33) "Operation and maintenance costs":
187 (a) means the costs that a local entity incurs in operating and maintaining
188 improvements in an assessment area, [including] whether or not those improvements have been
189 financed under this chapter; and
190 (b) includes service charges, administrative costs, ongoing maintenance charges, and
191 tariffs or other charges for electrical, water, gas, or other utility usage.
192 [(34) "Optional facilities":]
193 [(a) means facilities in an assessment area that:]
194 [(i) can be conveniently installed at the same time as improvements in the assessment
195 area; and]
196 [(ii) are requested by a property owner on whose property or for whose benefit the
197 improvements are being installed; and]
198 [(b) includes private driveways, irrigation ditches, and water turnouts.]
199 [(35)] (34) "Overhead costs" means the actual costs incurred or the estimated costs to
200 be incurred by a local entity in connection with an assessment area for appraisals, legal fees,
201 filing fees, financial advisory charges, underwriting fees, placement fees, escrow, trustee, and
202 paying agent fees, publishing and mailing costs, costs of levying an assessment, recording
203 costs, and all other incidental costs.
204 [(36)] (35) "Prior bonds" means the assessment bonds that are refunded in part or in
205 whole by refunding assessment bonds.
206 [(37)] (36) "Prior assessment ordinance" means the ordinance levying the assessments
207 from which the prior bonds are payable.
208 [(38)] (37) "Prior assessment resolution" means the resolution levying the assessments
209 from which the prior bonds are payable.
210 [(39)] (38) "Project engineer" means the surveyor or engineer employed by or private
211 consulting engineer engaged by a local entity to perform the necessary engineering services for
212 and to supervise the construction or installation of the improvements.
213 [(40)] (39) "Property" includes real property and any interest in real property, including

214 water rights, and leasehold rights[, and personal property related to the property].
215 [(41)] (40) "Property price" means the price at which a local entity purchases or
216 acquires by eminent domain property to make improvements in an assessment area.
217 [(42)] (41) "Provide" or "providing," with reference to an improvement, includes the
218 acquisition, construction, reconstruction, renovation, maintenance, repair, operation, and
219 expansion of an improvement.
220 [(43)] (42) "Public agency" means:
221 (a) the state or any agency, department, or division of the state; and
222 (b) a political subdivision of the state.
223 [(44)] (43) "Reduced payment obligation" means the full obligation of an owner of
224 property within an assessment area to pay an assessment levied on the property after the
225 assessment has been reduced because of the issuance of refunding assessment bonds, as
226 provided in Section 11-42-608 .
227 [(45)] (44) "Refunding assessment bonds" means assessment bonds that a local entity
228 issues under Section 11-42-607 to refund, in part or in whole, assessment bonds.
229 [(46)] (45) "Reserve fund" means a fund established by a local entity under Section
230 11-42-702 .
231 [(47)] (46) "Service" means water, sewer, storm drainage, garbage collection, library,
232 recreation, communications or electric service, economic promotion activities, or any other
233 service that a local entity is required or authorized to provide.
234 [(48)] (47) "Special service district" means a special service district under Title 17A,
235 Chapter 2, Part 13, Utah Special Service District Act.
236 [(49)] (48) "Unimproved property" means property upon which no residential,
237 commercial, or other building has been built.
238 [(50)] (49) "Voluntary assessment area" means an assessment area that contains only
239 property whose owners have voluntarily consented to an assessment.
240 Section 2. Section 11-42-202 is amended to read:
241 11-42-202. Requirements applicable to a notice of a proposed assessment area
242 designation.
243 (1) Each notice required under Subsection 11-42-201 (2)(a) shall:
244 (a) state that the local entity proposes to:

245 (i) designate one or more areas within the local entity's jurisdictional boundaries as an
246 assessment area;
247 (ii) provide an improvement to property within the proposed assessment area; and
248 (iii) finance some or all of the cost of improvements by an assessment on benefitted
249 property within the assessment area;
250 (b) describe the proposed assessment area by any reasonable method that allows an
251 owner of property in the proposed assessment area to determine that the owner's property is
252 within the proposed assessment area;
253 (c) describe, in a general way, the improvements to be provided to the assessment area,
254 including:
255 (i) the general nature of the improvements; and
256 (ii) the general location of the improvements, by reference to streets or portions or
257 extensions of streets or by any other means that the governing body chooses that reasonably
258 describes the general location of the improvements;
259 (d) a statement of the estimated cost of the improvements as determined by a project
260 engineer;
261 (e) a statement that the local entity proposes to levy an assessment on benefitted
262 property within the assessment area to pay some or all of the cost of the improvements
263 according to the estimated direct and indirect benefits to the property from the improvements;
264 (f) a statement of the assessment method by which the assessment is proposed to be
265 levied;
266 (g) a statement of the time within which and the location at which protests against
267 designation of the proposed assessment area or of the proposed improvements are required to
268 be filed and the method by which the number of protests required to defeat the designation of
269 the proposed assessment area or acquisition or construction of the proposed improvements are
270 to be determined;
271 (h) state the date, time, and place of the public hearing under Section 11-42-204 ;
272 (i) if the governing body elects to create and fund a reserve fund under Section
273 11-42-702 , a description of how the reserve fund will be funded and replenished and how
274 remaining money in the reserve fund is to be disbursed upon full payment of the bonds;
275 (j) if the governing body intends to designate a voluntary assessment area, a property

276 owner consent form that:
277 (i) estimates the total assessment to be levied against the particular parcel of property;
278 (ii) describes any additional benefits that the governing body expects the assessed
279 property to receive from the improvements; and
280 (iii) designates the date and time by which the fully executed consent form is required
281 to be submitted to the governing body;
282 (k) if the local entity intends to levy an assessment to pay operation and maintenance
283 costs or for economic promotion activities:
284 (i) a description of the operation and maintenance costs or economic promotion
285 activities to be paid by assessments and the initial estimated annual assessment to be levied;
286 (ii) a description of how the estimated assessment will be determined;
287 (iii) a description of how and when the governing body will adjust the assessment to
288 reflect current operation and maintenance costs or the costs of current economic promotion
289 activities;
290 (iv) a description of the method of assessment if different from the method of
291 assessment to be used for financing any improvement; and
292 (v) a statement of the maximum number of years over which the assessment for
293 operation and maintenance or economic promotion activities will be levied; and
294 (l) if the governing body intends to divide the proposed assessment area into zones
295 under Subsection 11-42-201 (1)(b), a description of the proposed zones.
296 (2) A notice required under Subsection 11-42-201 (2)(a) may contain other information
297 that the governing body considers to be appropriate, including:
298 (a) the amount or proportion of the cost of the improvement to be paid by the local
299 entity or from sources other than an assessment;
300 (b) the estimated amount of each type of assessment for the various improvements to
301 be financed according to the method of assessment that the governing body chooses; and
302 (c) provisions for any [optional] improvements described in Subsection
303 11-42-102 (22)(b).
304 (3) Each notice required under Subsection 11-42-201 (2)(a) shall:
305 (a) (i) be published in a newspaper of general circulation within the local entity's
306 jurisdictional boundaries, once a week for four consecutive weeks, with the last publication at

307 least five but not more than 20 days before the deadline [under Section 11-42-203 ] for filing
308 protests specified in the notice under Subsection (1)(g); or
309 (ii) if there is no newspaper of general circulation within the local entity's jurisdictional
310 boundaries, be posted in at least three public places within the local entity's jurisdictional
311 boundaries at least 20 but not more than 35 days before the deadline under Section 11-42-203
312 for filing protests; and
313 (b) be mailed, postage prepaid, within ten days after the first publication or posting of
314 the notice under Subsection (3)(a) to each owner of property to be assessed within the proposed
315 assessment area at the property owner's mailing address.
316 Section 3. Section 11-42-203 is amended to read:
317 11-42-203. Protests.
318 (1) An owner of property that is proposed to be [included] assessed within an
319 assessment area may, within the time specified in the notice under Section 11-42-202 , file a
320 written protest against:
321 (a) the designation of the assessment area;
322 (b) the inclusion of the owner's property in the proposed assessment area;
323 (c) the proposed improvements to be acquired or constructed; or
324 (d) any other aspect of the proposed designation of an assessment area.
325 (2) Each protest under Subsection (1)(a) shall describe or otherwise identify the
326 property owned by the person filing the protest.
327 (3) An owner may withdraw a protest at any time before the conclusion of the hearing
328 under Section 11-42-204 by filing a written withdrawal with the governing body.
329 (4) If the governing body intends to assess property within the proposed assessment
330 area by type of improvement or by zone, the governing body shall, in determining whether
331 adequate protests have been filed, aggregate the protests by the type of improvement or by
332 zone.
333 (5) The failure of an owner of property within the proposed assessment area to file a
334 timely written protest constitutes a waiver of any objection to:
335 (a) the designation of the assessment area;
336 (b) any improvement to be provided to property within the assessment area; and
337 (c) the inclusion of the owner's property within the assessment area.

338 Section 4. Section 11-42-205 is amended to read:
339 11-42-205. Unimproved property.
340 (1) [A] (a) Before a local entity may [not] designate an assessment area in which more
341 than 75% of the property proposed to be assessed consists of unimproved property [unless], the
342 local entity[:] shall obtain:
343 [(a) has obtained]
344 (i) an appraisal:
345 (A) of the unimproved property;
346 (B) from an appraiser who is a member of the Appraisal Institute[,];
347 (C) addressed to the local entity or a financial institution; and
348 (D) verifying that the market value of the property, after completion of the proposed
349 improvements, is at least three times the amount of the [assessment] assessments proposed to
350 be levied against the unimproved property; or
351 [(b) has obtained from each owner of unimproved property:]
352 (ii) the most recent taxable value of the unimproved property from the assessor of the
353 county in which the unimproved property is located, verifying that the taxable value of the
354 property, after completion of the proposed improvements, is at least three times the amount of
355 the assessments proposed to be levied against the unimproved property.
356 (b) If the owner of the unimproved property has entered into a construction loan
357 acceptable to the local entity to finance the facilities to be constructed or installed on the
358 unimproved property, the market value of the unimproved property, as determined under
359 Subsection (1)(a)(i), may include, at the local entity's option:
360 (i) the principal amount of the construction loan; or
361 (ii) the value of the unimproved property with the facilities to be financed by the
362 construction loan, as determined by an appraisal of:
363 (A) the unimproved property; and
364 (B) the facilities proposed to be constructed.
365 (2) With respect to the designation of an assessment area described in Subsection
366 (1)(a), the local entity may require:
367 [(i)] (a) financial information acceptable to the governing body [demonstrating] with
368 respect to the owner's ability to pay the proposed [assessment; or] assessments;

369 [(ii)] (b) a financial institution's commitment securing, to the governing body's
370 satisfaction, the [owner's] owners' obligation to pay the proposed [assessment; and]
371 assessments; or
372 (c) [has prepared] a development plan, approved by a qualified, independent third
373 party, describing the plan of development and the financial feasibility of the plan, taking into
374 account growth trends, absorption studies, and other demographic information applicable to the
375 unimproved property.
376 [(2)] (3) Information that an owner provides to a local entity under Subsection
377 [(1)(b)(i)] (2)(a) is not a record for purposes of Title 63, Chapter 2, Government Records
378 Access and Management Act.
379 Section 5. Section 11-42-207 is amended to read:
380 11-42-207. Adding property to an assessment area.
381 (1) A local entity may add to a designated assessment area property to be benefitted
382 and assessed if[: (a) construction of the improvements in the assessment area has not been
383 completed; and (b)] the governing body:
384 [(i)] (a) finds that the inclusion of the property will not adversely affect the owners of
385 property already in the assessment area;
386 [(ii)] (b) obtains from each owner of property to be added and benefitted a written
387 consent that contains:
388 [(A)] (i) the owner's consent to:
389 [(I)] (A) the owner's property being added to the assessment area; and
390 [(II)] (B) the making of the proposed improvements with respect to the owner's
391 property;
392 [(B)] (ii) the legal description and tax identification number of the property to be
393 added; and
394 [(C)] (iii) the owner's waiver of any right to protest the creation of the assessment area;
395 [(iii)] (c) amends the designation resolution or ordinance to include the added property;
396 and
397 [(iv)] (d) within 15 days after amending the designation resolution or ordinance:
398 [(A)] (i) records in the office of the recorder of the county in which the added property
399 is located the original or certified copy of the amended designation resolution or ordinance

400 containing the legal description and tax identification number of each additional parcel of
401 property added to the assessment area and proposed to be assessed; and
402 [(B)] (ii) gives written notice to the property owner of the inclusion of the owner's
403 property in the assessment area.
404 (2) The failure of a local entity's governing body to comply with the requirement of
405 Subsection (1)[(b)(iv)](d) does not affect the validity of the amended designation resolution or
406 ordinance.
407 (3) Except as provided in this section, a local entity may not add to an assessment area
408 [land] property not included in a notice under Section 11-42-202 , or provide for making
409 improvements that are not stated in the notice, unless the local entity gives notice as provided
410 in Section 11-42-202 and holds a hearing as required under Section 11-42-204 as to the added
411 [land] property or additional improvements.
412 Section 6. Section 11-42-301 is amended to read:
413 11-42-301. Improvements made only under contract let to lowest responsive,
414 responsible bidder -- Publishing notice -- Sealed bids -- Procedure -- Exceptions to
415 contract requirement.
416 (1) Except as otherwise provided in this section, a local entity may make improvements
417 in an assessment area only under contract let to the lowest responsive, responsible bidder for
418 the kind of service, material, or form of construction that the local entity's governing body
419 determines in compliance with any applicable local entity ordinances.
420 (2) A local entity may:
421 (a) divide improvements into parts;
422 (b) (i) let separate contracts for each part; or
423 (ii) combine multiple parts into the same contract; and
424 (c) let a contract on a unit basis.
425 (3) (a) A local entity may not let a contract until after publishing notice as provided in
426 Subsection (3)(b) at least one time in a newspaper of general circulation within the boundaries
427 of the local entity at least 15 days before the date specified for receipt of bids.
428 (b) Each notice under Subsection (3)(a) shall notify contractors that the local entity will
429 receive sealed bids at a specified time and place for the construction of the improvements.
430 (c) Notwithstanding a local entity's failure, through inadvertence or oversight, to

431 publish the notice or to publish the notice within 15 days before the date specified for receipt of
432 bids, the governing body may proceed to let a contract for the improvements if the local entity
433 receives at least three sealed and bona fide bids from contractors by the time specified for the
434 receipt of bids.
435 (d) A local entity may publish a notice required under this Subsection (3) at the same
436 time as a notice under Section 11-42-202 .
437 (4) (a) A local entity may accept as a sealed bid a bid that is:
438 (i) manually sealed and submitted; or
439 (ii) electronically sealed and submitted.
440 (b) The governing body or project engineer shall, at the time specified in the notice
441 under Subsection (3), open and examine the bids.
442 (c) In open session, the governing body:
443 (i) shall declare the bids; and
444 (ii) may reject any or all bids if the governing body considers the rejection to be for the
445 public good.
446 (d) The local entity may award the contract to the lowest responsive, responsible bidder
447 even if the price bid by that bidder exceeds the estimated costs as determined by the project
448 engineer.
449 (e) A local entity may in any case:
450 (i) refuse to award a contract;
451 (ii) obtain new bids after giving a new notice under Subsection (3);
452 (iii) determine to abandon the assessment area; or
453 (iv) not make some of the improvements proposed to be made.
454 (5) A local entity is not required to let a contract as provided in this section for:
455 (a) an improvement or part of an improvement the cost of which or the making of
456 which is donated or contributed;
457 (b) an improvement that consists of furnishing utility service or maintaining
458 improvements;
459 (c) labor, materials, or equipment supplied by the local entity;
460 (d) the local entity's acquisition of completed or partially completed improvements in
461 an assessment area;

462 (e) design, engineering, and inspection costs incurred with respect to the construction
463 of improvements in an assessment area; or
464 (f) additional work performed in accordance with the terms of a contract duly let to the
465 lowest responsive, responsible bidder.
466 (6) A local entity may itself furnish utility service and maintain improvements within
467 an assessment area.
468 (7) (a) A local entity may acquire completed or partially completed improvements in an
469 assessment area, but may not pay an amount for those improvements that exceeds their fair
470 market value.
471 (b) Upon the local entity's payment for completed or partially completed
472 improvements, title to the improvements shall be conveyed to the local entity or another public
473 agency.
474 (8) The provisions of Title 11, Chapter 39, Building Improvements and Public Works
475 Projects, and Section 72-6-108 do not apply to improvements to be constructed in an
476 assessment area.
477 Section 7. Section 11-42-401 is amended to read:
478 11-42-401. Levying an assessment -- Prerequisites -- Assessment list.
479 (1) A local entity may levy an assessment against property within an assessment area as
480 provided in this part.
481 (2) Before a governing body may adopt a resolution or ordinance levying an
482 assessment against property within an assessment area:
483 (a) the governing body shall:
484 (i) subject to Subsection (3), prepare an assessment list designating:
485 (A) each parcel of property proposed to be assessed; and
486 (B) the amount of the assessment to be levied against the property;
487 (ii) appoint a board of equalization as provided in Section 11-42-403 ; and
488 (iii) give notice as provided in Section 11-42-402 ; and
489 (b) the board of equalization, appointed under Section 11-42-403 , shall hold hearings,
490 make any corrections to assessments it considers appropriate, and report its findings to the
491 governing body as provided in Section 11-42-403 .
492 (3) An assessment list under Subsection (2)(a)(i) may be prepared at any time after:

493 (a) the estimated or actual operation and maintenance costs have been determined, if
494 the assessment is to pay operation and maintenance costs;
495 (b) the light service has commenced, if the assessment is to pay for light service;
496 (c) the park maintenance has commenced, if the assessment is to pay for park
497 maintenance;
498 (d) adoption of a resolution or ordinance under Section 11-42-206 , if the assessment is
499 to pay for economic promotion activities; or
500 (e) for any other assessment, the governing body has determined:
501 (i) the estimated or actual acquisition and construction costs of all proposed
502 improvements within the assessment area, including overhead costs and authorized
503 contingencies;
504 (ii) the estimated or actual property price for all property to be acquired to provide the
505 proposed improvements; and
506 (iii) the reasonable cost of any work to be done by the local entity.
507 (4) A local entity may levy an assessment for some or all of the cost of improvements
508 within an assessment area, including payment of:
509 (a) operation and maintenance costs of improvements constructed within the
510 assessment area;
511 (b) the actual cost that the local entity pays for utility services furnished or for
512 maintenance of improvements provided by another or, if the local entity itself furnishes utility
513 service or maintains improvements, for the reasonable cost of supplying the service or
514 maintenance;
515 (c) the reasonable cost of supplying labor, materials, or equipment in connection with
516 improvements; and
517 (d) the reasonable cost of connection fees or the cost of any sewer, storm drainage,
518 water, gas, electric, or [telecommunications] communications connections if the local entity
519 owns or supplies these services, to the depth that the local entity's governing body considers
520 just and equitable.
521 (5) A local entity may not levy an assessment for an amount donated or contributed for
522 an improvement or part of an improvement.
523 (6) The validity of an otherwise valid assessment is not affected because the actual cost

524 of improvements exceeds the estimated cost.
525 (7) An assessment levied to pay for operation and maintenance costs may not be levied
526 over a period of time exceeding the reasonable useful life of the facilities to be maintained by
527 the levy.
528 Section 8. Section 11-42-403 is amended to read:
529 11-42-403. Board of equalization -- Hearings -- Corrections to proposed
530 assessment list -- Report to governing body -- Appeal -- Board findings final -- Waiver of
531 objections.
532 (1) After preparing an assessment list under Subsection 11-42-401 (2)(a)(i), the
533 governing body shall appoint a board of equalization.
534 (2) Each board of equalization under this section shall, at the option of the governing
535 body, consist of:
536 (a) three or more members of the governing body;
537 (b) (i) two members of the governing body; and
538 (ii) (A) a representative of the treasurer's office of the local entity; or
539 (B) a representative of the office of the local entity's engineer or the project engineer;
540 or
541 (c) (i) (A) one member of the governing body; or
542 (B) a representative of the governing body, whether or not a member of the governing
543 body, appointed by the governing body;
544 (ii) a representative of the treasurer's office of the local entity; and
545 (iii) a representative of the office of the local entity's engineer or the project engineer.
546 (3) (a) The board of equalization shall hold hearings on at least three consecutive days
547 for at least one hour per day between 9 a.m. and 9 p.m., as specified in the notice under Section
548 11-42-402 .
549 (b) The board of equalization may continue a hearing from time to time to a specific
550 place and a specific hour and day until the board's work is completed.
551 (c) At each hearing, the board of equalization shall hear arguments from any person
552 who claims to be aggrieved, including arguments relating to:
553 (i) the direct or indirect benefits accruing to a tract, block, lot, or parcel of property in
554 the assessment area; or

555 (ii) the amount of the proposed assessment against the tract, block, lot, or parcel.
556 (4) (a) After the hearings under Subsection (3) are completed, the board of equalization
557 shall:
558 (i) consider all facts and arguments presented at the hearings; and
559 (ii) make any corrections to the proposed assessment list that the board considers just
560 and equitable.
561 (b) A correction under Subsection (4)(a)(ii) may:
562 (i) eliminate one or more pieces of property from the assessment list; or
563 (ii) increase or decrease the amount of the assessment proposed to be levied against a
564 parcel of property.
565 (c) (i) If the board of equalization makes a correction under Subsection (4)(a)(ii) that
566 results in an increase of a proposed assessment, the board shall, before approving a corrected
567 assessment list:
568 (A) give notice as provided in Subsection (4)(c)(ii);
569 (B) hold a hearing at which the owner whose assessment is proposed to be increased
570 may appear and object to the proposed increase; and
571 (C) after holding a hearing, make any further corrections that the board considers just
572 and equitable with respect to the proposed increased assessment.
573 (ii) Each notice required under Subsection (4)(c)(i)(A) shall:
574 (A) state:
575 (I) that the property owner's assessment is proposed to be increased;
576 (II) the amount of the proposed increased assessment;
577 (III) that a hearing will be held at which the owner may appear and object to the
578 increase; and
579 (IV) the date, time, and place of the hearing; and
580 (B) be mailed, at least 15 days before the date of the hearing, to each owner of property
581 as to which the assessment is proposed to be increased at the property owner's mailing address.
582 (5) (a) After the board of equalization has held all hearings required by this section and
583 has made all corrections the board considers just and equitable, the board shall report to the
584 governing body its findings that:
585 (i) each parcel of property within the assessment area will be directly or indirectly

586 benefitted in an amount not less than the assessment to be levied against the property; and
587 (ii) except as provided in Subsection 11-42-409 (6), no parcel of property on the
588 assessment list will bear more than its proportionate share of the cost of the improvements
589 benefitting the property.
590 (b) The board of equalization shall, within ten days after submitting its report to the
591 governing body, mail a copy of the board's final report to each property owner who objected at
592 the board hearings to the assessment proposed to be levied against the property owner's
593 property at the property owner's mailing address.
594 (6) (a) If a board of equalization includes members other than the governing body of
595 the local entity, a property owner may appeal a decision of the board to the governing body by
596 filing with the governing body a written notice of appeal within 15 days after the board's final
597 report is mailed to property owners under Subsection (5)(b).
598 (b) Except as provided in Subsection (6)(a), no appeal may be taken from the findings
599 of a board of equalization.
600 (7) The findings of a board of equalization are final:
601 (a) when approved by the governing body, if no appeal is allowed under Subsection
602 (6); or
603 (b) after the time for appeal under Subsection (6) is passed, if an appeal is allowed
604 under that subsection.
605 (8) (a) If a governing body has levied an assessment to pay operation and maintenance
606 costs within an assessment area, the governing body may periodically appoint a new board of
607 equalization to review assessments for operation and maintenance costs.
608 (b) Each board of equalization appointed under Subsection (8)(a) shall comply with the
609 requirements of Subsections (3) through (6).
610 (9) The failure of an owner of property within the assessment area to appear before the
611 board of equalization to object to the levy of the assessment constitutes a waiver of all
612 objections to the levy, except an objection that the governing body failed to obtain jurisdiction
613 to order that the improvements which the assessment is intended to pay be provided to the
614 assessment area.
615 Section 9. Section 11-42-404 is amended to read:
616 11-42-404. Adoption of a resolution or ordinance levying an assessment -- Notice

617 of the adoption -- Effective date of resolution or ordinance -- Notice of assessment
618 interest.
619 (1) (a) After receiving a final report from a board of equalization under Subsection
620 11-42-403 (5) or, if applicable, after the time for filing an appeal under Subsection
621 11-42-403 (6) has passed, the governing body may adopt a resolution or ordinance levying an
622 assessment against benefitted property within the assessment area.
623 (b) Each local entity that levies an assessment under this chapter shall levy the
624 assessment at one time only, unless the assessment is to pay operation and maintenance costs
625 or the costs of economic promotion activities.
626 (c) An assessment resolution or ordinance adopted under Subsection (1)(a):
627 (i) need not describe each tract, block, lot, part of block or lot, or parcel of property to
628 be assessed;
629 (ii) need not include the legal description or tax identification number of the parcels of
630 property assessed in the assessment area; and
631 (iii) is adequate for purposes of identifying the property to be assessed within the
632 assessment area if the assessment resolution or ordinance incorporates by reference the
633 corrected assessment list that describes the property assessed by legal description and tax
634 identification number.
635 (2) (a) Each local entity that adopts an assessment resolution or ordinance shall give
636 notice of the adoption by:
637 (i) publishing a copy of the resolution or ordinance, or a summary of the resolution or
638 ordinance, once in a newspaper of general circulation within the local entity's jurisdictional
639 boundaries; or
640 (ii) if there is no newspaper of general circulation with the local entity's jurisdictional
641 boundaries, posting a copy of the resolution or ordinance in at least three public places within
642 the local entity's jurisdictional boundaries for at least 21 days.
643 (b) No other publication or posting of the resolution or ordinance is required.
644 (3) Notwithstanding any other statutory provision regarding the effective date of a
645 resolution or ordinance, each assessment resolution or ordinance takes effect:
646 (a) on the date of publication or posting of the notice under Subsection (2); or
647 (b) at a later date provided in the resolution or ordinance.

648 (4) (a) The governing body of each local entity that has adopted an assessment
649 resolution or ordinance under Subsection (1) shall, within five days after the 25-day
650 prepayment period under Subsection 11-42-411 (6) has passed, file a notice of assessment
651 interest with the recorder of the county in which the assessed property is located.
652 (b) Each notice of assessment interest under Subsection (4)(a) shall:
653 (i) state that the local entity has an assessment interest in the assessed property;
654 (ii) if the assessment is to pay operation and maintenance costs or for economic
655 promotion activities, state the maximum number of years over which an assessment will be
656 payable; and
657 (iii) describe the property assessed by legal description and tax identification number.
658 (c) A local entity's failure to file a notice of assessment interest under this Subsection
659 (4) has no affect on the validity of an assessment levied under an assessment resolution or
660 ordinance adopted under Subsection (1).
661 Section 10. Section 11-42-410 is amended to read:
662 11-42-410. Amending an assessment resolution or ordinance.
663 (1) A governing body may adopt a resolution or ordinance amending the original
664 assessment resolution or ordinance adopted under Section 11-42-404 to:
665 (a) correct a deficiency, omission, error, or mistake:
666 (i) with respect to:
667 (A) the total cost of an improvement;
668 (B) operation and maintenance costs; or
669 (C) the cost of economic promotion activities; or
670 (ii) that results in a tract, lot, block, or parcel not being fully assessed or assessed in an
671 incorrect amount;
672 (b) reallocate or adjust assessments under the original assessment resolution or
673 ordinance for operation and maintenance costs or the costs of economic promotion activities;
674 (c) reallocate or adjust assessments under the original assessment resolution or
675 ordinance; or
676 (d) reduce an assessment as a result of the issuance of refunding bonds.
677 (2) If an amendment under Subsection (1)(a) or (c) results in an increase in an
678 assessment for any property owner, the governing body shall comply with the notice

679 requirements of Section 11-42-402 , unless the owner waives notice as provided in Section
680 11-42-104 .
681 Section 11. Section 11-42-602 is amended to read:
682 11-42-602. Bond anticipation notes.
683 (1) A local entity may by resolution authorize the issuance of bond anticipation notes.
684 (2) A local entity may use the proceeds from the issuance of bond anticipation notes to
685 pay:
686 (a) the estimated acquisition and contract price;
687 (b) the property price; [and]
688 (c) capitalized interest; and
689 [(c)] (d) related costs, including overhead costs.
690 (3) Each resolution authorizing the issuance of bond anticipation notes shall:
691 (a) describe the bonds in anticipation of which the bond anticipation notes are to be
692 issued;
693 (b) specify the principal amount and maturity dates of the notes; and
694 (c) specify the interest rate applicable to the notes.
695 (4) (a) The interest rate on bond anticipation notes issued under this section may be
696 fixed, variable, or a combination of fixed and variable, as determined by the governing body.
697 (b) If bond anticipation notes carry a variable interest rate, the governing body shall
698 specify the basis upon which the rate is to be determined, the manner in which the rate is to be
699 adjusted, and a maximum interest rate.
700 (c) A local entity may provide for interest on bond anticipation notes to be paid
701 semiannually, annually, or at maturity.
702 (5) A local entity may:
703 (a) issue and sell bond anticipation notes in a manner and at a price, either at, below, or
704 above face value, as the governing body determines by resolution; and
705 (b) make bond anticipation notes redeemable prior to maturity, at the governing body's
706 option and in the manner and upon the terms fixed by the resolution authorizing their issuance.
707 (6) Bond anticipation notes shall be executed, be in a form, and have details and terms
708 as provided in the resolution authorizing their issuance.
709 (7) A local entity may issue bond anticipation notes to refund bond anticipation notes

710 previously issued by the local entity.
711 (8) A local entity may include interest accruing on bond anticipation notes in the cost
712 of improvements in an assessment area.
713 Section 12. Section 11-42-603 is amended to read:
714 11-42-603. Sources of payment for interim warrants and bond anticipation notes.
715 Each local entity that has issued interim warrants or bond anticipation notes shall pay
716 the warrants or notes from:
717 (1) proceeds from the sale of assessment bonds;
718 (2) cash the local entity receives from the payment for improvements;
719 (3) assessments;
720 [(3)] (4) improvement revenues that are not pledged to the payment of assessment
721 bonds;
722 [(4)] (5) proceeds from the sale of interim warrants or bond anticipation notes; or
723 [(5)] (6) the local entity's guaranty fund or, if applicable, the reserve fund.
724 Section 13. Section 11-42-605 is amended to read:
725 11-42-605. Local entity may authorize the issuance of assessment bonds -- Limit
726 on amount of bonds -- Features of assessment bonds.
727 (1) After the 25-day prepayment period under Subsection 11-42-411 (6) has passed or,
728 if the 25-day prepayment period is waived under Section 11-42-104 , after the assessment
729 resolution or ordinance takes effect, a local entity may authorize the issuance of bonds to pay
730 the costs of improvements in an assessment area, and other related costs, against the funds that
731 the local entity will receive because of an assessment in an assessment area.
732 (2) The aggregate principal amount of bonds authorized under Subsection (1) may not
733 exceed the unpaid balance of assessments at the end of the 25-day prepayment period under
734 Subsection 11-42-411 (5).
735 (3) Assessment bonds issued under this section:
736 (a) are fully negotiable for all purposes;
737 (b) shall mature at a time that does not exceed the period that installments of
738 assessments in the assessment area are due and payable, plus one year;
739 (c) shall bear interest at the lowest rate or rates reasonably obtainable;
740 (d) may not be dated earlier than the effective date of the assessment ordinance;

741 (e) shall be payable at the place, shall be in the form, and shall be sold in the manner
742 and with the details that are provided in the resolution authorizing the issuance of the bonds;
743 (f) shall be issued[, as the governing body determines: (i) in bearer form, with or
744 without interest coupons attached; or (ii)] in registered form as provided in Title 15, Chapter 7,
745 Registered Public Obligations Act; and
746 (g) provide that interest be paid semiannually, annually, or at another interval as
747 specified by the governing body.
748 (4) (a) A local entity may:
749 (i) (A) provide that assessment bonds be callable for redemption before maturity; and
750 (B) fix the terms and conditions of redemption, including the notice to be given and
751 any premium to be paid;
752 (ii) subject to Subsection (4)(b), require assessment bonds to bear interest at a fixed or
753 variable rate, or a combination of fixed and variable rates;
754 (iii) specify terms and conditions under which:
755 (A) assessment bonds bearing interest at a variable interest rate may be converted to
756 bear interest at a fixed interest rate; and
757 (B) the local entity agrees to repurchase the bonds; [and]
758 (iv) engage a remarketing agent and indexing agent, subject to the terms and conditions
759 that the governing body agrees to; and
760 (v) include all costs associated with assessment bonds, including any costs resulting
761 from any of the actions the local entity is authorized to take under this section, in an assessment
762 levied under Section 11-42-401 .
763 (b) If assessment bonds carry a variable interest rate, the local entity shall specify:
764 (i) the basis upon which the variable rate is to be determined over the life of the bonds;
765 (ii) the manner in which and schedule upon which the rate is to be adjusted; and
766 (iii) a maximum rate that the bonds may carry.
767 (5) (a) Nothing in this part may be construed to authorize the issuance of assessment
768 bonds to pay for the cost of ordinary repairs to pavement, sewers, drains, curbing, gutters, or
769 sidewalks.
770 (b) Notwithstanding Subsection (5)(a), a local entity may issue assessment bonds to
771 pay for extraordinary repairs to pavement, sewers, drains, curbing, gutters, or sidewalk.

772 (c) A local entity's governing body may define by resolution or ordinance what
773 constitutes ordinary repairs and extraordinary repairs for purposes of this Subsection (5).
774 (d) Nothing in this Subsection (5) may be construed to limit a local entity from levying
775 an assessment within an assessment area to pay operation and maintenance costs as described
776 in a notice under Section 11-42-402 .
777 (6) If a local entity has issued interim warrants under Section 11-42-601 or bond
778 anticipation notes under Section 11-42-602 in anticipation of assessment bonds that the local
779 entity issues under this part, the local entity shall provide for the retirement of the interim
780 warrants or bond anticipation notes contemporaneously with the issuance of the assessment
781 bonds.
782 Section 14. Section 11-42-702 is amended to read:
783 11-42-702. Reserve fund.
784 (1) In lieu of creating and funding a guaranty fund under Section 11-42-701 for an
785 issue of assessment bonds or refunding assessment bonds, a local entity may establish a reserve
786 fund to secure the issue.
787 (2) If a local entity establishes a reserve fund under this section:
788 (a) the bonds secured by the reserve fund are not secured by a guaranty fund under
789 Section 11-42-701 ;
790 (b) the local entity is not required to fund a guaranty fund under Section 11-42-701 for
791 those bonds; and
792 (c) unless otherwise provided in this part or in the proceedings authorizing the issuance
793 of bonds, the provisions of this part regarding a guaranty fund have no application to the bonds
794 that are secured by the reserve fund.
795 (3) Each local entity that establishes a reserve fund shall:
796 (a) fund and replenish the reserve fund in the amounts and manner provided in the
797 proceedings authorizing the issuance of the bonds that are secured by the reserve fund; and
798 (b) invest the funds on deposit in the reserve fund as provided in Title 51, Chapter 7,
799 State Money Management Act.
800 (4) (a) Subject to Subsection (4)(b), a local entity may replenish a reserve fund under
801 this section by any of the methods described in Subsection 11-42-701 (1)(b).
802 (b) The proceedings authorizing the issuance of assessment bonds or refunding

803 assessment bonds shall provide that if a local entity uses any of the methods described in
804 Subsection 11-42-701 (1)(b) to replenish a reserve fund, the local entity shall be reimbursed,
805 with interest at a rate that the local entity determines, with money that the local entity receives
806 from foreclosing on delinquent property.
807 (5) Upon the retirement of bonds secured by a reserve fund, the local entity shall:
808 (a) terminate the reserve fund; and
809 (b) disburse all remaining money in the fund as provided in the proceedings
810 authorizing the issuance of the bonds.




Legislative Review Note
as of 2-15-08 7:32 AM

Office of Legislative Research and General Counsel