Bill Summary – FastDemocracy

Enrolled Copy                                                                             S.B. 179
                  PUBLIC INFRASTRUCTURE DISTRICT AMENDMENTS
                                        2020 GENERAL SESSION
                                             STATE OF UTAH
                                   Chief Sponsor: Daniel McCay
                                House Sponsor: James A. Dunnigan
 6
 LONG TITLE
 General Description:
         This bill modifies provisions in the Public Infrastructure District Act.
 Highlighted Provisions:
         This bill:
         < modifies requirements regarding the creation of a public infrastructure district;
         < allows a public infrastructure district to annex or withdraw property without the
 consent of the creating entity if authorized in the district's governing document;
         < exempts a public infrastructure district from certain notice and hearing requirements
 upon:
             C    levying a property tax if certain conditions are met; or
             C    amending a property tax levy rate limitation in the district's governing
 document; and
         < makes technical and conforming changes.
 Money Appropriated in this Bill:
         None
 Other Special Clauses:
         None
 Utah Code Sections Affected:
 AMENDS:
         17B-2a-1202, as enacted by Laws of Utah 2019, Chapter 490
         17B-2a-1204, as enacted by Laws of Utah 2019, Chapter 490
         17B-2a-1205, as enacted by Laws of Utah 2019, Chapter 490
       S.B. 179                                                                               Enrolled Copy
           17B-2a-1207, as enacted by Laws of Utah 2019, Chapter 490
31
 Be it enacted by the Legislature of the state of Utah:
           Section 1. Section 17B-2a-1202 is amended to read:
           17B-2a-1202. Definitions.
           As used in this part:
           (1) "Board" means the board of trustees of a public infrastructure district.
           (2) "Creating entity" means the county or municipality that approves of the creation of
 the public infrastructure district.
           (3) "District applicant" means the person proposing the creation of the public
 infrastructure district.
           (4) "Division" means a division of a public infrastructure district:
           (a) that is relatively equal in number of eligible voters or potential eligible voters to all
 other divisions within the public infrastructure district, taking into account existing or potential
 developments which, when completed, would increase or decrease the population within the
 public infrastructure district; and
           (b) which a member of the board represents.
           (5) "Governing document" means the document governing the public infrastructure
 district to which the creating entity agrees before the creation of the public infrastructure
 district, as amended from time to time, and subject to the limitations of Chapter 1, Provisions
 Applicable to All Local Districts, and this part.
           (6) (a) "Limited tax bond" means a bond:
           (i) that is directly payable from and secured by ad valorem property taxes that are
 levied:
           (A) by the public infrastructure district that issues the bond; and
           (B) on taxable property within the district;
           (ii) that is a general obligation of the public infrastructure district; and
           (iii) for which the ad valorem property tax levy for repayment of the bond does not
                                                         -2-
       Enrolled Copy                                                                             S.B. 179
 exceed the [mill] property tax levy rate limit established under Section 17B-2a-1209 for any
 fiscal year, except as provided in Subsection 17B-2a-1207(8).
         (b) "Limited tax bond" does not include:
         (i) a short-term bond;
         (ii) a tax and revenue anticipation bond; or
         (iii) a special assessment bond.
         Section 2. Section 17B-2a-1204 is amended to read:
         17B-2a-1204. Creation -- Annexation or withdrawal of property.
         (1) [In] Except as provided in Subsection (2), in addition to the provisions regarding
 creation of a local district in Chapter 1, Provisions Applicable to All Local Districts, a public
 infrastructure district may not be created unless:
         (a) if there are any registered voters within the applicable area, a petition is filed with
 the creating entity that contains the signatures of 100% of registered voters within the
 applicable area approving the creation of the public infrastructure district; and
         (b) a petition is filed with the creating entity that contains the signatures of 100% of
 surface property owners within the applicable area consenting to the creation of the public
 infrastructure district.
         (2) (a) The [election requirement of Section 17B-1-214 does] following do not apply to
 [a petition meeting the requirements of Subsection (1).]the creation of a public infrastructure
 district:
         (i) Section 17B-1-203;
         (ii) Section 17B-1-204;
         (iii) Subsection 17B-1-208(2);
         (iv) Section 17B-1-212; or
         (v) Section 17B-1-214.
         (b) The protest period described in Section 17B-1-213 may be waived in whole or in
 part with the consent of:
         (i) 100% of registered voters within the applicable area approving the creation of the
                                                      -3-
        S.B. 179                                                                           Enrolled Copy
 public infrastructure district; and
           (ii) 100% of the surface property owners within the applicable area approving the
 creation of the public infrastructure district.
           (c) If the protest period is waived under Subsection (2)(b), a resolution approving the
 creation of the public infrastructure district may be adopted in accordance with Subsection
 17B-1-213(5).
           (d) A petition meeting the requirements of Subsection (1):
           (i) may be certified under Section 17B-1-209; and
           (ii) shall be filed with the lieutenant governor in accordance with Subsection
 17B-1-215(1)(b)(iii).
           (3) (a) Notwithstanding Chapter 1, Part 4, Annexation, an area outside of the
 boundaries of a public infrastructure district may be annexed into the public infrastructure
 district after:
           (i) (A) adoption of resolutions of the board and the creating entity, each approving of
 the annexation; or
           (B) adoption of a governing document that authorizes the board to annex an area
 outside of the boundaries of the public infrastructure district without the consent of the creating
 entity;
           (ii) if there are any registered voters within the area proposed to be annexed, a petition
 is filed with the creating entity that contains the signatures of 100% of registered voters within
 the area and approves of the annexation into the public infrastructure district; and
           (iii) a petition is filed with the creating entity that contains the signatures of 100% of
 surface property owners within the area proposed to be annexed and consents to the annexation
 into the public infrastructure district.
           (b) Upon meeting the requirements of Subsection (3)(a), the board shall comply with
 the resolution and filing requirements of Subsections 17B-1-414(1) and (2).
           [(c) (i)] (4) (a) Notwithstanding Chapter 1, Part 5, Withdrawal, property may be
 withdrawn from a public infrastructure district after:
                                                         -4-
        Enrolled Copy                                                                                 S.B. 179
           (i) (A) adoption of resolutions of the board and the creating entity, each approving of
 the [annexation;] withdrawal; or
           (B) adoption of a governing document that authorizes the board to withdraw property
 from the public infrastructure district without the consent of the creating entity;
           [(B)] (ii) if there are any registered voters within the area proposed to be withdrawn, a
 petition is filed with the creating entity that contains the signatures of 100% of registered voters
 within the area and approves of the withdrawal from the public infrastructure district; and
           [(C)] (iii) a petition is filed with the creating entity that contains the signatures of 100%
 of surface property owners within the area proposed to be withdrawn and consents to the
 withdrawal from the public infrastructure district.
           [(ii)] (b) If any bonds that the public infrastructure district issues are allocable to the
 area to be withdrawn remain unpaid at the time of the proposed withdrawal, the property
 remains subject to any taxes, fees, or assessments that the public infrastructure district imposes
 until the bonds or any associated refunding bonds are paid.
           [(d)] (c) Upon meeting the requirements of [Subsection (3)(c)] Subsections (4)(a) and
 (b), the board shall comply with the requirements of Section 17B-1-512.
           [(4)] (5) The creating entity may impose limitations on the powers of the public
 infrastructure district through the governing document.
           [(5)] (6) (a) A public infrastructure district is separate and distinct from the creating
 entity.
           (b) (i) Except as provided in Subsection [(5)] (6)(b)(ii), any financial burden of a
 public infrastructure district:
           (A) is borne solely by the public infrastructure district; and
           (B) is not borne by the creating entity or any municipality, county, the state, or any
 other political subdivision.
           (ii) Notwithstanding Subsection [(5)] (6)(b)(i) and Section 17B-1-216, the governing
 document may require:
           (A) the district applicant to bear the initial costs of the public infrastructure district;
                                                          -5-
        S.B. 179                                                                          Enrolled Copy
 and
         (B) the public infrastructure district to reimburse the district applicant for the initial
 costs the creating entity bears.
         (c) Any liability, judgment, or claim against a public infrastructure district:
         (i) is the sole responsibility of the public infrastructure district; and
         (ii) does not constitute a liability, judgment, or claim against the creating entity, the
 state, or any municipality, county, or other political subdivision.
         (d) (i) (A) The public infrastructure district solely bears the responsibility of any
 collection, enforcement, or foreclosure proceeding with regard to any tax, fee, or assessment
 the public infrastructure district imposes.
         (B) The creating entity does not bear the responsibility described in Subsection [(5)]
 (6)(d)(i)(A).
         (ii) A public infrastructure district, and not the creating entity, shall undertake the
 enforcement responsibility described in, as applicable, Subsection [(5)] (6)(d)(i) in accordance
 with Title 59, Chapter 2, Property Tax Act, or Title 11, Chapter 42, Assessment Area Act.
         [(6)] (7) The creating entity may establish criteria in determining whether to approve or
 disapprove of the creation of a public infrastructure district, including:
         (a) historical performance of the district applicant;
         (b) compliance with the creating entity's master plan;
         (c) credit worthiness of the district applicant;
         (d) plan of finance of the public infrastructure district; and
         (e) proposed development within the public infrastructure district.
         [(7)] (8) (a) The creation of a public infrastructure district is subject to the sole
 discretion of the creating entity responsible for approving or rejecting the creation of the public
 infrastructure district.
         (b) The proposed creating entity bears no liability for rejecting the proposed creation of
 a public infrastructure district.
         Section 3. Section 17B-2a-1205 is amended to read:
                                                        -6-
        Enrolled Copy                                                                             S.B. 179
         17B-2a-1205. Public infrastructure district board -- Governing document.
         (1) The legislative body of the creating entity [that approves the creation of a public
 infrastructure district] shall appoint the members of the board, in accordance with the
 governing document.
         (2) (a) Unless otherwise limited in the governing document and except as provided in
 Subsection (2)(b), the initial term of each member of the board is four years.
         (b) Notwithstanding Subsection (2)(a), approximately half of the members of the initial
 board shall serve a six-year term so that, after the expiration of the initial term, the term of
 approximately half the board members expires every two years.
         (c) A board may elect that a majority of the board serve an initial term of six years.
         (d) After the initial term, the term of each member of the board is four years.
         (3) (a) Notwithstanding Subsection 17B-1-302(1)(b), a board member is not required
 to be a resident within the boundaries of the public infrastructure district if:
         (i) all of the surface property owners consent to the waiver of the residency
 requirement;
         (ii) there are no residents within the boundaries of the public infrastructure district;
         (iii) no qualified candidate timely files to be considered for appointment to the board;
 or
         (iv) no qualified individual files a declaration of candidacy for a board position in
 accordance with Subsection 17B-1-306(4).
         (b) Except under the circumstances described in Subsection (3)(a)(iii) or (iv), the
 residency requirement in Subsection 17B-1-302(1)(b) is applicable to any board member
 elected for a division or board position that has transitioned from an appointed to an elected
 board member in accordance with this section.
         (c) An individual who is not a resident within the boundaries of the public
 infrastructure district may not serve as a board member unless the individual is:
         (i) an owner of land or an agent or officer of the owner of land within the boundaries of
 the public infrastructure district; and
                                                       -7-
        S.B. 179                                                                       Enrolled Copy
        (ii) a registered voter at the individual's primary residence.
        (4) (a) A governing document may provide for a transition from legislative body
 appointment under Subsection (1) to a method of election by registered voters based upon
 milestones or events that the governing document identifies, including a milestone for each
 division or individual board position providing that when the milestone is reached:
        (i) for a division, the registered voters of the division elect a member of the board in
 place of an appointed member at the next municipal general election for the board position; or
        (ii) for an at large board position established in the governing document, the registered
 voters of the public infrastructure district elect a member of the board in place of an appointed
 member at the next municipal general election for the board position.
        (b) Regardless of whether a board member is elected under Subsection (4)(a), the
 position of each remaining board member shall continue to be appointed under Subsection (1)
 until the member's respective division or board position surpasses the density milestone
 described in the governing document.
        (5) (a) Subject to Subsection (5)(c), the board may, in the board's discretion but no
 more frequently than every four years, reestablish the boundaries of each division so that each
 division that has reached a milestone specified in the governing document, as described in
 Subsection (4)(a), has, as nearly as possible, the same number of eligible voters.
        (b) In reestablishing division boundaries under Subsection (5)(a), the board shall
 consider existing or potential developments within the divisions which, when completed,
 would increase or decrease the number of eligible voters within the division.
        (c) The governing document may prohibit the board from reestablishing, without the
 consent of the creating entity, the division boundaries as described in Subsection (5)(a).
        (6) The public infrastructure district may not compensate a board member for the
 member's service on the board under Section 17B-1-307 unless the board member is a resident
 within the boundaries of the public infrastructure district.
        (7) The governing document shall:
        (a) include a boundary description and a map of the public infrastructure district;
                                                      -8-
        Enrolled Copy                                                                             S.B. 179
         (b) state the number of board members;
         (c) describe any divisions of the public infrastructure district;
         (d) establish any applicable [mill] property tax levy rate limit for the public
 infrastructure district;
         (e) esta