Chief Sponsor: R. Curt Webb

Senate Sponsor: Daniel W. Thatcher


8     General Description:
9          This bill modifies provisions of the Assessment Area Act.
10     Highlighted Provisions:
11          This bill:
12          ▸     clarifies the required contents of a notice of a proposed assessment area designation;
13          ▸     provides that a local entity that levies an assessment for economic promotion
14     activities shall assess each benefitted property; and
15          ▸     makes technical and conforming changes.
16     Money Appropriated in this Bill:
17          None
18     Other Special Clauses:
19          None
20     Utah Code Sections Affected:
21     AMENDS:
22          11-42-202, as last amended by Laws of Utah 2016, Chapters 85 and 371
23          11-42-409, as last amended by Laws of Utah 2015, Chapter 396

25     Be it enacted by the Legislature of the state of Utah:
26          Section 1. Section 11-42-202 is amended to read:
27          11-42-202. Requirements applicable to a notice of a proposed assessment area
28     designation.
29          (1) Each notice required under Subsection 11-42-201(2)(a) shall:

30          (a) state that the local entity proposes to:
31          (i) designate one or more areas within the local entity's jurisdictional boundaries as an
32     assessment area;
33          (ii) provide an improvement to property within the proposed assessment area; and
34          (iii) finance some or all of the cost of improvements by an assessment on benefitted
35     property within the assessment area;
36          (b) describe the proposed assessment area by any reasonable method that allows an
37     owner of property in the proposed assessment area to determine that the owner's property is
38     within the proposed assessment area;
39          (c) describe, in a general and reasonably accurate way, the improvements to be
40     provided to the assessment area, including:
41          (i) the nature of the improvements; and
42          (ii) the location of the improvements, by reference to streets or portions or extensions
43     of streets or by any other means that the governing body chooses that reasonably describes the
44     general location of the improvements;
45          (d) state the estimated cost of the improvements as determined by a project engineer;
46          (e) for the version of notice mailed in accordance with Subsection (4)(b), state the
47     estimated total assessment specific to the benefitted property for which the notice is mailed;
48          (f) state that the local entity proposes to levy an assessment on benefitted property
49     within the assessment area to pay some or all of the cost of the improvements according to the
50     estimated benefits to the property from the improvements;
51          (g) if applicable, state that an unassessed benefitted government property will receive
52     improvements for which the cost will be allocated proportionately to the remaining benefitted
53     properties within the proposed assessment area and that a description of each unassessed
54     benefitted government property is available for public review at the location or website
55     described in Subsection (6);
56          (h) state the assessment method by which the governing body proposes to [levy the]
57     calculate the proposed assessment, including, if the local entity is a municipality or county,

58     whether the assessment will be collected:
59          (i) by directly billing a property owner; or
60          (ii) by inclusion on a property tax notice issued in accordance with Section 59-2-1317
61     and in compliance with Section 11-42-401;
62          (i) state:
63          (i) the date described in Section 11-42-203 and the location at which protests against
64     designation of the proposed assessment area or of the proposed improvements are required to
65     be filed;
66          (ii) the method by which the governing body will determine the number of protests
67     required to defeat the designation of the proposed assessment area or acquisition or
68     construction of the proposed improvements; and
69          (iii) in large, boldface, and conspicuous type that a property owner must protest the
70     designation of the assessment area in writing if the owner objects to the area designation or
71     being assessed for the proposed improvements, operation and maintenance costs, or economic
72     promotion activities;
73          (j) state the date, time, and place of the public hearing required in Section 11-42-204;
74          (k) if the governing body elects to create and fund a reserve fund under Section
75     11-42-702, include a description of:
76          (i) how the reserve fund will be funded and replenished; and
77          (ii) how remaining money in the reserve fund is to be disbursed upon full payment of
78     the bonds;
79          (l) if the governing body intends to designate a voluntary assessment area, include a
80     property owner consent form that:
81          (i) estimates the total assessment to be levied against the particular parcel of property;
82          (ii) describes any additional benefits that the governing body expects the assessed
83     property to receive from the improvements;
84          (iii) designates the date and time by which the fully executed consent form is required
85     to be submitted to the governing body; and

86          (iv) if the governing body intends to enforce an assessment lien on the property in
87     accordance with Subsection 11-42-502.1(2)(c):
88          (A) appoints a trustee that satisfies the requirements described in Section 57-1-21;
89          (B) gives the trustee the power of sale; and
90          (C) explains that if an assessment or an installment of an assessment is not paid when
91     due, the local entity may sell the property owner's property to satisfy the amount due plus
92     interest, penalties, and costs, in the manner described in Title 57, Chapter 1, Conveyances;
93          (m) if the local entity intends to levy an assessment to pay operation and maintenance
94     costs or for economic promotion activities, include:
95          (i) a description of the operation and maintenance costs or economic promotion
96     activities to be paid by assessments and the initial estimated annual assessment to be levied;
97          (ii) a description of how the estimated assessment will be determined;
98          (iii) a description of how and when the governing body will adjust the assessment to
99     reflect the costs of:
100          (A) in accordance with Section 11-42-406, current economic promotion activities; or
101          (B) current operation and maintenance costs;
102          (iv) a description of the method of assessment if different from the method of
103     assessment to be used for financing any improvement; and
104          (v) a statement of the maximum number of years over which the assessment will be
105     levied for:
106          (A) operation and maintenance costs; or
107          (B) economic promotion activities;
108          (n) if the governing body intends to divide the proposed assessment area into
109     classifications under Subsection 11-42-201(1)(b), include a description of the proposed
110     classifications;
111          (o) if applicable, state the portion and value of the improvement that will be increased
112     in size or capacity to serve property outside of the assessment area and how the increases will
113     be financed; and

114          (p) state whether the improvements will be financed with a bond and, if so, the
115     currently estimated interest rate and term of financing, subject to Subsection (2), for which the
116     benefitted properties within the assessment area may be obligated.
117          (2) The estimated interest rate and term of financing in Subsection (1)(p) may not be
118     interpreted as a limitation to the actual interest rate incurred or the actual term of financing as
119     subject to the market rate at the time of the issuance of the bond.
120          (3) A notice required under Subsection 11-42-201(2)(a) may contain other information
121     that the governing body considers to be appropriate, including:
122          (a) the amount or proportion of the cost of the improvement to be paid by the local
123     entity or from sources other than an assessment;
124          (b) the estimated total amount of each type of assessment for the various improvements
125     to be financed according to the method of assessment that the governing body chooses; and
126          (c) provisions for any improvements described in Subsection 11-42-102(26)(a)(ii).
127          (4) Each notice required under Subsection 11-42-201(2)(a) shall:
128          (a) (i) (A) be published in a newspaper of general circulation within the local entity's
129     jurisdictional boundaries, once a week for four consecutive weeks, with the last publication at
130     least five but not more than 20 days before the day of the hearing required in Section
131     11-42-204; or
132          (B) if there is no newspaper of general circulation within the local entity's jurisdictional
133     boundaries, be posted in at least three public places within the local entity's jurisdictional
134     boundaries at least 20 but not more than 35 days before the day of the hearing required in
135     Section 11-42-204; and
136          (ii) be published on the Utah Public Notice Website described in Section 63F-1-701 for
137     four weeks before the deadline for filing protests specified in the notice under Subsection
138     (1)(i); and
139          (b) be mailed, postage prepaid, within 10 days after the first publication or posting of
140     the notice under Subsection (4)(a) to each owner of property to be assessed within the proposed
141     assessment area at the property owner's mailing address.

142          (5) (a) The local entity may record the version of the notice that is published or posted
143     in accordance with Subsection (4)(a) with the office of the county recorder, by legal description
144     and tax identification number as identified in county records, against the property proposed to
145     be assessed.
146          (b) The notice recorded under Subsection (5)(a) expires and is no longer valid one year
147     after the day on which the local entity records the notice if the local entity has failed to adopt
148     the designation ordinance or resolution under Section 11-42-201 designating the assessment
149     area for which the notice was recorded.
150          (6) A local entity shall make available on the local entity's website, or, if no website is
151     available, at the local entity's place of business, the address and type of use of each unassessed
152     benefitted government property described in Subsection (1)(g).
153          (7) If a governing body fails to provide actual or constructive notice under this section,
154     the local entity may not assess a levy against a benefitted property omitted from the notice
155     unless:
156          (a) the property owner gives written consent;
157          (b) the property owner received notice under Subsection 11-42-401(2)(a)(iii) and did
158     not object to the levy of the assessment before the final hearing of the board of equalization; or
159          (c) the benefitted property is conveyed to a subsequent purchaser and, before the date
160     of conveyance, the requirements of Subsections 11-42-206(3)(a)(i) and (ii), or, if applicable,
161     Subsection 11-42-207(1)(d)(i) are met.
162          Section 2. Section 11-42-409 is amended to read:
163          11-42-409. Assessment requirements and prohibitions -- Economic promotion
164     activities assessment requirements and prohibitions -- Allocation for unassessed
165     benefitted government property.
166          (1) (a) Each local entity that levies an assessment under this chapter:
167          (i) except for an appropriate allocation for an unassessed benefitted government
168     property, may not assess a property for more than the amount that the property benefits by the
169     improvement, operation and maintenance, or economic promotion activities;

170          (ii) may levy an assessment only for the actual costs that are reasonable; and
171          (iii) shall levy an assessment on a benefitted property in an amount that reflects an
172     equitable portion, subject to Subsection (1)(b), of the benefit the property will receive from an
173     improvement, operation and maintenance, or economic promotion activities for which the
174     assessment is levied.
175          (b) The local entity, in accounting for a property's benefit or portion of a benefit
176     received from an improvement, operation and maintenance, or economic promotion activities,
177     shall consider:
178          (i) any benefit that can be directly identified with the property; and
179          (ii) the property's roughly equivalent portion of the benefit that is collectively shared by
180     all the assessed properties in the entire assessment area or classification.
181          (c) The validity of an otherwise valid assessment is not affected by the fact that the
182     benefit to the property from the improvement does not increase the fair market value of the
183     property.
184          (2) [The] Subject to Subsection (4), the assessment method a governing body uses to
185     calculate an assessment may be according to frontage, area, taxable value, fair market value,
186     lot, parcel, number of connections, equivalent residential unit, or any combination of these
187     methods, or any other method as the governing body considers appropriate to comply with
188     Subsections (1)(a) and (b).
189          (3) A local entity that levies an assessment under this chapter for an improvement:
190          (a) shall:
191          (i) (A) levy the assessment on each block, lot, tract, or parcel of property that benefits
192     from the improvement; and
193          (B) to whatever depth, including full depth, on the parcel of property that the governing
194     body determines but that still complies with Subsections (1)(a) and (b);
195          (ii) make an allowance for each corner lot receiving the same improvement on both
196     sides so that the property is not assessed at the full rate on both sides; and
197          (iii) pay for any increase in size or capacity that serves property outside of the

198     assessment area with funds other than those levied by an assessment;
199          (b) may:
200          (i) use different methods for different improvements in an assessment area;
201          (ii) assess different amounts in different classifications, even when using the same
202     method, if acquisition or construction costs differ from classification to classification;
203          (iii) allocate a corner lot allowance under Subsection (3)(a)(ii) to all other benefitted
204     property within the assessment area by increasing the assessment levied against the other
205     assessed property in the same proportion as the improvement is assessed;
206          (iv) to comply with Subsection (1)(a), levy an assessment within classifications; and
207          (v) assess property to replace improvements that are approaching or have exceeded
208     their useful life or to increase the level of service of an existing improvement; and
209          (c) may not:
210          (i) consider the costs of the additional size or capacity of an improvement that will be
211     increased in size or capacity to serve property outside of the assessment area when calculating
212     an assessment or determining an assessment method; or
213          (ii) except for in a voluntary assessment area or as provided in Subsection (3)(b)(v),
214     assess a property for an improvement that would duplicate or provide a reasonably similar
215     service that is already provided to the property.
216          (4) A local entity that levies an assessment under this chapter for economic promotion
217     activities:
218          (a) shall:
219          (i) subject to Section 11-42-408, levy the assessment on each benefitted property; and
220          (ii) subject to Subsection (4)(d), use an assessment method that, when applied to a
221     benefitted property, meets the requirements of Subsection (1)(a);
222          [(a)] (b) may:
223          (i) levy an assessment only on commercial or industrial real property; and
224          (ii) create classifications based on property use, or other distinguishing factors, to
225     determine the estimated benefit to the assessed property;

226          [(b)] (c) subject to Subsection (4)(d), may rely on, in addition to the assessment
227     methods described in Subsection (2), estimated benefits from an increase in:
228          (i) office lease rates;
229          (ii) retail sales rates;
230          (iii) customer base;
231          (iv) public perception;
232          (v) hotel room rates and occupancy levels;
233          (vi) property values;
234          (vii) the commercial environment from enhanced services;
235          (viii) another articulable method of estimating benefits; or
236          (ix) a combination of the methods described in Subsections (4)[(b)](c)(i) through (viii);
237     and
238          [(c) subject to Subsection (4)(d), shall use an assessment method that, when applied to
239     a benefitted property, meets the requirements of Subsection (1)(a); and]
240          (d) may not use taxable value, fair market value, or any other assessment method based
241     on the value of the property as the sole assessment method.
242          (5) A local entity may levy an assessment that would otherwise violate a provision of
243     this chapter if the owners of all property to be assessed voluntarily enter into a written
244     agreement with the local entity consenting to the assessment.
245          (6) A local entity may allocate the cost of a benefit received by an unassessed
246     benefitted government property to all other benefitted property within the assessment area by
247     increasing the assessment levied against the other assessed property in the same proportion as
248     the improvement, operation and maintenance, or economic promotion activities are assessed.