Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 17 Third Substitute (2016GS)

Sponsor

Rep. Webb, R. C.

Final action

Governor Signed 3/21/2016

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• modifies the methods by which a local entity may enforce an assessment lien; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

ASSESSMENT AREA FORECLOSURE AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: R. Curt Webb
Senate Sponsor: 
Curtis S. Bramble
LONG TITLE
General Description:
This bill amends foreclosure provisions in the Assessment Area Act.
Highlighted Provisions:
This bill:
▸ modifies the methods by which a local entity may enforce an assessment lien; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
11-42-202
, as last amended by Laws of Utah 2015, Chapters 349 and 396
11-42-207
, as last amended by Laws of Utah 2015, Chapter 396
11-42-502
, as enacted by Laws of Utah 2007, Chapter 329
ENACTS:
11-42-502.1
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
11-42-202
 is amended to read:
11-42-202.
Requirements applicable to a notice of a proposed assessment area
designation.
(1) Each notice required under Subsection 
11-42-201
(2)(a) shall:
(a) state that the local entity proposes to:
(i) designate one or more areas within the local entity's jurisdictional boundaries as an
assessment area;
(ii) provide an improvement to property within the proposed assessment area; and
(iii) finance some or all of the cost of improvements by an assessment on benefitted
property within the assessment area;
(b) describe the proposed assessment area by any reasonable method that allows an
owner of property in the proposed assessment area to determine that the owner's property is
within the proposed assessment area;
(c) describe, in a general and reasonably accurate way, the improvements to be
provided to the assessment area, including:
(i) the nature of the improvements; and
(ii) the location of the improvements, by reference to streets or portions or extensions
of streets or by any other means that the governing body chooses that reasonably describes the
general location of the improvements;
(d) state the estimated cost of the improvements as determined by a project engineer;
(e) for the version of notice mailed in accordance with Subsection (4)(b), state the
estimated total assessment specific to the benefitted property for which the notice is mailed;
(f) state that the local entity proposes to levy an assessment on benefitted property
within the assessment area to pay some or all of the cost of the improvements according to the
estimated benefits to the property from the improvements;
(g) if applicable, state that an unassessed benefitted government property will receive
improvements for which the cost will be allocated proportionately to the remaining benefitted
properties within the proposed assessment area and that a description of each unassessed
benefitted government property is available for public review at the location or website
described in Subsection (6);
(h) state the assessment method by which the governing body proposes to levy the
assessment, including, if the local entity is a municipality or county, whether the assessment
will be collected:
(i) by directly billing a property owner; or
(ii) by inclusion on a property tax notice issued in accordance with Section 
59-2-1317
and in compliance with Section 
11-42-401
;
(i) state:
(i) the date described in Section 
11-42-203
 and the location at which protests against
designation of the proposed assessment area or of the proposed improvements are required to
be filed;
(ii) the method by which the governing body will determine the number of protests
required to defeat the designation of the proposed assessment area or acquisition or
construction of the proposed improvements; and
(iii) in large, boldface, and conspicuous type that a property owner must protest the
designation of the assessment area in writing if the owner objects to the area designation or
being assessed for the proposed improvements, operation and maintenance costs, or economic
promotion activities;
(j) state the date, time, and place of the public hearing required in Section 
11-42-204
;
(k) if the governing body elects to create and fund a reserve fund under Section
11-42-702
, include a description of:
(i) how the reserve fund will be funded and replenished; and
(ii) how remaining money in the reserve fund is to be disbursed upon full payment of
the bonds;
(l) if the governing body intends to designate a voluntary assessment area, include a
property owner consent form that:
(i) estimates the total assessment to be levied against the particular parcel of property;
(ii) describes any additional benefits that the governing body expects the assessed
property to receive from the improvements; [
and
]
(iii) designates the date and time by which the fully executed consent form is required
to be submitted to the governing body; 
and
(iv) if the governing body intends to enforce an assessment lien on the property in
accordance with Subsection 
11-42-502.1
(2)(c):
(A) appoints a trustee that satisfies the requirements described in Section 
57-1-21
;
(B) gives the trustee the power of sale; and
(C) explains that if an assessment or an installment of an assessment is not paid when
due, the local entity may sell the property owner's property to satisfy the amount due plus
interest, penalties, and costs, in the manner described in Title 57, Chapter 1, Conveyances;
(m) if the local entity intends to levy an assessment to pay operation and maintenance
costs or for economic promotion activities, include:
(i) a description of the operation and maintenance costs or economic promotion
activities to be paid by assessments and the initial estimated annual assessment to be levied;
(ii) a description of how the estimated assessment will be determined;
(iii) a description of how and when the governing body will adjust the assessment to
reflect the costs of:
(A) in accordance with Section 
11-42-406
, current economic promotion activities; or
(B) current operation and maintenance costs;
(iv) a description of the method of assessment if different from the method of
assessment to be used for financing any improvement; and
(v) a statement of the maximum number of years over which the assessment will be
levied for:
(A) operation and maintenance costs; or
(B) economic promotion activities;
(n) if the governing body intends to divide the proposed assessment area into
classifications under Subsection 
11-42-201
(1)(b), include a description of the proposed
classifications;
(o) if applicable, state the portion and value of the improvement that will be increased
in size or capacity to serve property outside of the assessment area and how the increases will
be financed; and
(p) state whether the improvements will be financed with a bond and, if so, the
currently estimated interest rate and term of financing, subject to Subsection (2), for which the
benefitted properties within the assessment area may be obligated.
(2) The estimated interest rate and term of financing in Subsection (1)(p) may not be
interpreted as a limitation to the actual interest rate incurred or the actual term of financing as
subject to the market rate at the time of the issuance of the bond.
(3) A notice required under Subsection 
11-42-201
(2)(a) may contain other information
that the governing body considers to be appropriate, including:
(a) the amount or proportion of the cost of the improvement to be paid by the local
entity or from sources other than an assessment;
(b) the estimated total amount of each type of assessment for the various improvements
to be financed according to the method of assessment that the governing body chooses; and
(c) provisions for any improvements described in Subsection 
11-42-102
(25)(a)(ii).
(4) Each notice required under Subsection 
11-42-201
(2)(a) shall:
(a) (i) (A) be published in a newspaper of general circulation within the local entity's
jurisdictional boundaries, once a week for four consecutive weeks, with the last publication at
least five but not more than 20 days before the day of the hearing required in Section
11-42-204
; or
(B) if there is no newspaper of general circulation within the local entity's jurisdictional
boundaries, be posted in at least three public places within the local entity's jurisdictional
boundaries at least 20 but not more than 35 days before the day of the hearing required in
Section 
11-42-204
; and
(ii) be published on the Utah Public Notice Website described in Section 
63F-1-701
 for
four weeks before the deadline for filing protests specified in the notice under Subsection
(1)(i); and
(b) be mailed, postage prepaid, within 10 days after the first publication or posting of
the notice under Subsection (4)(a) to each owner of property to be assessed within the proposed
assessment area at the property owner's mailing address.
(5) (a) The local entity may record the version of the notice that is published or posted
in accordance with Subsection (4)(a) with the office of the county recorder, by legal description
and tax identification number as identified in county records, against the property proposed to
be assessed.
(b) The notice recorded under Subsection (5)(a) expires and is no longer valid one year
after the day on which the local entity records the notice if the local entity has failed to adopt
the designation ordinance or resolution under Section 
11-42-201
 designating the assessment
area for which the notice was recorded.
(6) A local entity shall make available on the local entity's website, or, if no website is
available, at the local entity's place of business, the address and type of use of each unassessed
benefitted government property described in Subsection (1)(g).
(7) If a governing body fails to provide actual or constructive notice under this section,
the local entity may not assess a levy against a benefitted property omitted from the notice
unless:
(a) the property owner gives written consent;
(b) the property owner received notice under Subsection 
11-42-401
(2)(a)(iii) and did
not object to the levy of the assessment before the final hearing of the board of equalization; or
(c) the benefitted property is conveyed to a subsequent purchaser and, before the date
of conveyance, the requirements of Subsections 
11-42-206
(3)(a)(i) and (ii), or, if applicable,
Subsection 
11-42-207
(1)(d)(i) are met.
Section 2. Section 
11-42-207
 is amended to read:
11-42-207.
Adding property to an assessment area.
(1) A local entity may add to a designated assessment area property to be benefitted
and assessed if the governing body:
(a) finds that the inclusion of the property will not adversely affect the owners of
property already in the assessment area;
(b) obtains from each owner of property to be added and benefitted a written consent
that contains:
(i) the owner's consent to:
(A) the owner's property being added to the assessment area; and
(B) the making of the proposed improvements with respect to the owner's property;
(ii) if the assessment area to which the local entity seeks to add property is a voluntary
assessment area, the items described in Subsection 
11-42-202
(1)(l);
[
(ii)
] 
(iii)
 the legal description and tax identification number of the property to be
added; and
[
(iii)
] 
(iv)
 the owner's waiver of any right to protest the creation of the assessment area;
(c) amends the designation resolution or ordinance to include the added property; and
(d) within 15 days after amending the designation resolution or ordinance:
(i) records in the office of the recorder of the county in which the added property is
located the original or certified copy of the amended designation resolution or ordinance
containing the legal description and tax identification number as identified on county records of
each additional parcel of property added to the assessment area and proposed to be assessed;
and
(ii) gives written notice to the property owner of the inclusion of the owner's property
in the assessment area.
(2) (a) If a governing body fails to comply with the requirements of Subsection
(1)(d)(i):
(i) the failure does not invalidate the amended designation resolution or ordinance; and
(ii) the local entity may not assess a levy against a subsequent purchaser of a benefitted
property that lacked recorded notice unless:
(A) the subsequent purchaser gives written consent;
(B) the subsequent purchaser has actual notice of the assessment levy; or
(C) the subsequent purchaser purchased the property after a corrected notice was filed
under Subsection (2)(c).
(b) The governing body may file a corrected notice under Subsection (1)(d)(i) if it
failed to comply with the date or other requirements for recording notice of the amended
designation resolution or ordinance.
(c) If a governing body has filed a corrected notice under Subsection (2)(b), the local
entity may not retroactively collect or adjust the amount of the levy to recapture lost funds for a
levy that the local entity was prohibited from collecting, if applicable, under Subsection (2)(a).
(d) A local entity shall pay for a shortfall in assessment funds created under Subsection
(2)(a) or (c) from the local entity's general fund and not by increasing or adjusting the
assessment of any other property within the assessment area.
(3) Except as provided in this section, a local entity may not add to an assessment area
property not included in a notice under Section 
11-42-202
, or provide for making
improvements that are not stated in the notice, unless the local entity gives notice as provided
in Section 
11-42-202
 and holds a hearing as required under Section 
11-42-204
 as to the added
property or additional improvements.
Section 3. Section 
11-42-502
 is amended to read:
11-42-502.
Enforcement of an assessment lien -- Pre-May 10, 2016, procedure.
(1) The provisions of this section apply to any property that is:
(a) (i) located within the boundaries of an assessment area; and
(ii) the subject of a foreclosure procedure initiated before May 10, 2016, for an
assessment or an installment of an assessment that is not paid when due; or
(b) located within the boundaries of an assessment area for which the local entity
issued an assessment bond or a refunding assessment bond:
(i) before May 10, 2016;
(ii) that has not reached final maturity; and
(iii) that is not refinanced on or after May 10, 2016.
[
(1)
] 
(2)
 If an assessment or an installment of an assessment is not paid when due, the
local entity may sell the property on which the assessment has been levied for the amount due
plus interest, penalties, and costs, in the manner provided:
(a) by resolution or ordinance of the local entity;
(b) in Title 59, Chapter 2, Part 13, Collection of Taxes, for the sale of property for
delinquent general property taxes; or
(c) in Title 57, Chapter 1, Conveyances, as though the property were the subject of a
trust deed in favor of the local entity.
[
(2)
] 
(3)
 Except as [
modified by
] 
otherwise provided in
 this chapter, each tax sale
under Subsection [
(1)
] 
(2)
(b) shall be governed by Title 59, Chapter 2, Part 13, Collection of
Taxes, to the same extent as if the sale were for the sale of property for delinquent general
property taxes.
[
(3)
] 
(4)
 (a) In a foreclosure under Subsection [
(1)
] 
(2)
(c):
(i) the local entity may bid at the sale;
(ii) the local entity's governing body shall designate a trustee satisfying the
requirements of Section 
57-1-21
;
(iii) each trustee designated under Subsection [
(3)
] 
(4)
(a)(ii) has a power of sale with
respect to the property that is the subject of the delinquent assessment lien;
(iv) the property that is the subject of the delinquent assessment lien is considered to
have been conveyed to the trustee, in trust, for the sole purpose of permitting the trustee to
exercise the trustee's power of sale under Subsection [
(3)
] 
(4)
(a)(iii);
(v) if no one bids at the sale and pays the local entity the amount due on the
assessment, plus interest and costs, the property is considered sold to the local entity for those
amounts; and
(vi) the local entity's chief financial officer may substitute and appoint one or more
successor trustees, as provided in Section 
57-1-22
.
(b) The designation of a trustee under Subsection [
(3)
] 
(4)
(a)(ii) shall be disclosed in
the notice of default that the trustee gives to commence the foreclosure, and need not be stated
in a separate instrument.
[
(4)
] 
(5)
 (a) The redemption of property that is the subject of a tax sale under
Subsection [
(1)
] 
(2)
(b) is governed by Title 59, Chapter 2, Part 13, Collection of Taxes.
(b) The redemption of property that is the subject of a foreclosure proceeding under
Subsection [
(1)
] 
(2)
(c) is governed by Title 57, Chapter 1, Conveyances.
[
(5)
] 
(6)
 (a) The remedies [
provided for
] 
described
 in this part for the collection of an
assessment and the enforcement of an assessment lien are cumulative.
(b) The use of one or more of the remedies [
provided for
] 
described
 in this part [
may
not be considered to
] 
does not
 deprive the local entity of any other 
available
 remedy or means
of collecting the assessment or enforcing the assessment lien.
Section 4. Section 
11-42-502.1
 is enacted to read:
 11-42-502.1.
Enforcement of an assessment lien -- Post-May 10, 2016, procedure.
(1) (a) Except as provided in Subsection (1)(b), the provisions of this section apply to
any property that is:
(i) located within the boundaries of an assessment area; and
(ii) the subject of a foreclosure procedure initiated on or after May 10, 2016, for an
assessment or an installment of an assessment that is not paid when due.
(b) The provisions of this chapter do not apply to property described in Subsection
11-42-502
(1)(b).
(2) If an assessment or an installment of an assessment is not paid when due, the local
entity may sell the property on which the assessment has been levied for the amount due plus
interest, penalties, and costs:
(a) in the manner provided in Title 59, Chapter 2, Part 13, Collection of Taxes, for the
sale of property for delinquent general property taxes;
(b) by judicial foreclosure; or
(c) in the manner described in Title 57, Chapter 1, Conveyances, if:
(i) the property is in a voluntary assessment area; and
(ii) the owner of record of the property at the time the local entity initiates the process
to sell the property in accordance with Title 57, Chapter 1, Conveyances, executed a property
owner's consent form described in Subsection 
11-42-202
(1)(l) that includes a provision
described in Subsection 
11-42-202
(1)(l)(iv).
(3) Except as otherwise provided in this chapter, each tax sale under Subsection (2)(a)
shall be governed by Title 59, Chapter 2, Part 13, Collection of Taxes, to the same extent as if
the sale were for the sale of property for delinquent general property taxes.
(4) (a) The redemption of property that is the subject of a tax sale under Subsection
(2)(a) is governed by Title 59, Chapter 2, Part 13, Collection of Taxes.
(b) The redemption of property that is the subject of a judicial foreclosure proceeding
under Subsection (2)(b) is governed by Title 78B, Chapter 6, Part 9, Mortgage Foreclosure.
(c) The redemption of property that is the subject of a foreclosure proceeding under
Subsection (2)(c) is governed by Title 57, Chapter 1, Conveyances.
(5) (a) The remedies described in this part for the collection of an assessment and the
enforcement of an assessment lien are cumulative.
(b) The use of one or more of the remedies described in this part does not deprive the
local entity of any other available remedy or means of collecting the assessment or enforcing
the assessment lien.