Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                             S.B. 252
Approved for Filing: R.H. Rees 6                             1st Sub. (Green)
          6 02-27-24 8:08 PM 6
                          Senator Daniel McCay proposes the following substitute bill:
                       MUNICIPAL INCORPORATION REVISIONS
                                      2024 GENERAL SESSION
                                           STATE OF UTAH
                                 Chief Sponsor: Daniel McCay
                               House Sponsor: James A. Dunnigan
 6
 LONG TITLE
 General Description:
         This bill modifies provisions relating to a feasibility study for a proposed municipal
 incorporation.
 Highlighted Provisions:
         This bill:
         < modifies the population figures applicable to certain classes of municipalities;
         < modifies the requirements applicable to how a feasibility consultant conducts a
 feasibility study;
         < modifies provisions relating to the criteria to determine whether an incorporation
 may proceed.
 Money Appropriated in this Bill:
         None
 Other Special Clauses:                                                                           1st Sub. S.B. 252
         None
 Utah Code Sections Affected:
 AMENDS:
         10-2-301, as last amended by Laws of Utah 2003, Chapter 292
         10-2a-205, as last amended by Laws of Utah 2023, Chapters 16, 224
     *SB0252S01*
       1st Sub. (Green) S.B. 252                                                   02-27-24 8:08 PM
26
 Be it enacted by the Legislature of the state of Utah:
         Section 1. Section 10-2-301 is amended to read:
         10-2-301. Classification of municipalities according to population.
         (1) Each municipality shall be classified according to its population, as provided in this
 section.
         (2) (a) A municipality with a population of 100,000 or more is a city of the first class.
         (b) A municipality with a population of 65,000 or more but less than 100,000 is a city
 of the second class.
         (c) A municipality with a population of 30,000 or more but less than 65,000 is a city of
 the third class.
         (d) A municipality with a population of 10,000 or more but less than 30,000 is a city of
 the fourth class.
         (e) A municipality with a population of [1,000] 750 or more but less than 10,000 is a
 city of the fifth class.
         (f) A municipality with a population under [1,000] 750 is a town.
         Section 2. Section 10-2a-205 is amended to read:
         10-2a-205. Feasibility study -- Feasibility study consultant -- Qualifications for
 proceeding with incorporation.
         (1) Unless the lieutenant governor rescinds the certification under Subsection
 10-2a-204(7)(b), the lieutenant governor shall, within 90 days after the day on which the
 lieutenant governor certifies a feasibility request under Subsection 10-2a-204(5)(a), in
 accordance with Subsection (2), engage a feasibility consultant to conduct a feasibility study.
         (2) The lieutenant governor shall:
         (a) select a feasibility consultant in accordance with Title 63G, Chapter 6a, Utah
 Procurement Code;
         (b) ensure that the feasibility consultant:
         (i) has expertise in the processes and economics of local government; and
         (ii) is not affiliated with a sponsor of the feasibility request or the county in which the
 proposed municipality is located; and
         (c) require the feasibility consultant to:
                                                      -2-
       02-27-24 8:08 PM                                                  1st Sub. (Green) S.B. 252
        (i) submit a draft of the feasibility study to each applicable person with whom the
 feasibility consultant is required to consult under Subsection (3)(c) within 90 days after the day
 on which the lieutenant governor engages the feasibility consultant to conduct the study;
        (ii) allow each person to whom the consultant provides a draft under Subsection
 (2)(c)(i) to review and provide comment on the draft;
        (iii) submit a completed feasibility study, including a one-page summary of the results,
 to the following within 120 days after the day on which the lieutenant governor engages the
 feasibility consultant to conduct the feasibility study:
        (A) the lieutenant governor;
        (B) the county legislative body of the county in which the incorporation is proposed;
        (C) the contact sponsor; and
        (D) each person to whom the consultant provided a draft under Subsection (2)(c)(i);
 and
        (iv) attend the public hearings described in Section 10-2a-207 to present the feasibility
 study results and respond to questions from the public.
        (3) (a) The feasibility study shall include:
        (i) an analysis of the population and population density within the area proposed for
 incorporation and the surrounding area;
        (ii) the current and projected five-year demographics and tax base within the
 boundaries of the proposed municipality and surrounding area, including household size and
 income, commercial and industrial development, and public facilities;
        (iii) subject to Subsection (3)(b), the current and five-year projected cost of providing
 municipal services to the proposed municipality, including administrative costs;
        (iv) assuming the same tax categories and tax rates as currently imposed by the county
 and all other current service providers, the present and five-year projected revenue for the
 proposed municipality;
        (v) an analysis of the risks and opportunities that might affect the actual costs described
 in Subsection (3)(a)(iii) or revenues described in Subsection (3)(a)(iv) of the newly
 incorporated municipality;
        (vi) an analysis of new revenue sources that may be available to the newly incorporated
 municipality that are not available before the area incorporates, including an analysis of the
                                                      -3-
        1st Sub. (Green) S.B. 252                                                    02-27-24 8:08 PM
 amount of revenues the municipality might obtain from those revenue sources;
        (vii) the projected tax burden per household of any new taxes that may be levied within
 the proposed municipality within five years after incorporation;
        (viii) the fiscal impact of the municipality's incorporation on unincorporated areas,
 other municipalities, special districts, special service districts, and other governmental entities
 in the county; and
        (ix) if the county clerk excludes property from, or includes property in, the proposed
 municipality under Section 10-2a-204.5, an update to the map and legal description described
 in Subsection 10-2a-202(2)(c).
        (b) (i) In calculating the projected costs under Subsection (3)(a)(iii), the feasibility
 consultant shall:
        (A) assume the proposed municipality will provide a level and quality of municipal
 services that fairly and reasonably approximate the level and quality of municipal services that
 are provided to the area of the proposed municipality at the time the feasibility consultant
 conducts the feasibility study[.]; and
        (B) apply an inflationary factor to projected costs based on a generally accepted price
 index applicable to the costs under consideration.
        (ii) In calculating the current cost of a municipal service under Subsection (3)(a)(iii),
 the feasibility consultant shall consider:
        (A) the amount it would cost the proposed municipality to provide the municipal
 service for the first five years after the municipality's incorporation; and
        (B) the current municipal service provider's present and five-year projected cost of
 providing the municipal service.
        (iii) In calculating costs under Subsection (3)(a)(iii), the feasibility consultant shall
 account for inflation and anticipated growth.
        (c) In conducting the feasibility study, the feasibility consultant shall consult with the
 following before submitting a draft of the feasibility study under Subsection (2)(c)(i):
        (i) if the proposed municipality will include lands owned by the United States federal
 government, the entity within the United States federal government that has jurisdiction over
 the land;
        (ii) if the proposed municipality will include lands owned by the state, the entity within
                                                       -4-
        02-27-24 8:08 PM                                                   1st Sub. (Green) S.B. 252
 state government that has jurisdiction over the land;
        (iii) each entity that provides a municipal service to a portion of the proposed
 municipality; and
        (iv) each other special service district that provides services to a portion of the
 proposed municipality.
        (4) If the five-year projected revenues calculated under Subsection (3)(a)(iv) exceed the
 five-year projected costs calculated under Subsection (3)(a)(iii) by more than [5%] 10%, the
 feasibility consultant shall project and report the expected annual revenue surplus to the contact
 sponsor and the lieutenant governor.
        (5) (a) Except as provided in Subsection (5)(b), if the results of the feasibility study, or
 a supplemental feasibility study described in Section 10-2a-206, show that the average annual
 amount of revenue calculated under Subsection (3)(a)(iv) does not exceed the average annual
 cost calculated under Subsection (3)(a)(iii) by more than [5%] 10%, the process to incorporate
 the area that is the subject of the feasibility study or supplemental feasibility study may not
 proceed.
        (b) The process to incorporate an area described in Subsection (5)(a) may proceed if a
 subsequent supplemental feasibility study conducted under Section 10-2a-206 for the proposed
 incorporation demonstrates compliance with Subsection (5)(a).
        (6) If the results of the feasibility study or revised feasibility study do not comply with
 Subsection (5), and if requested by the sponsors of the request, the feasibility consultant shall,
 as part of the feasibility study or revised feasibility study, make recommendations regarding
 how the boundaries of the proposed municipality may be altered to comply with Subsection
 (5).
        (7) The lieutenant governor shall post a copy of the feasibility study, and any
 supplemental feasibility study described in Section 10-2a-206, on the lieutenant governor's
 website and make a copy available for public review at the lieutenant governor's office.
        Section 3. Effective date.
        This bill takes effect on May 1, 2024.
                                                      -5-
Statutes affected: 
Introduced: 10-2-301