HF 460 (LSB 1111YH (4) 85)

HOUSE FILE 460

BY  WINDSCHITL

A BILL FOR

An Act relating to drainage or levee districts by providing for mergers, bidding requirements, the annexation of land, and special agreements, and authorizing the imposition of assessments upon affected landowners.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I

MERGER
    Section 1.  NEW SECTION.  468.262  Purpose. 
   One or more drainage or levee districts may merge with another levee or drainage district as provided in this part in such a manner that the surviving drainage or levee district continues to exist and absorbs each old drainage or levee district which dissolves.
    Sec. 2.  NEW SECTION.  468.263  Requirements.
   1.  In order for a merger to occur, all of the following must apply: 
   a.  Immediately prior to the merger, all of the following conditions must be satisfied: 
   (1)  One boundary of the proposed old drainage or levee district must completely adjoin all or part of the boundary of the proposed surviving drainage or levee district.
   (2)  The drainage or levee district includes a number of levees that are operating separately in a manner that does not benefit the territory served by the multiple districts.
   b.  Each board considering the proposed merger must determine all of the following: 
   (1)  The merger will benefit the owners of the land of the board’s district. 
   (2)  It is in the best interests of all landowners in all proposed old drainage or levee districts and the proposed surviving district to establish a system of levees managed as part of a system.
   2.  A merger may occur notwithstanding that a drainage or levee district is not otherwise eligible for dissolution as provided in part 6.
    Sec. 3.  NEW SECTION.  468.264  Hearing.
   The boards of one or more proposed old drainage or levee districts and the board of a proposed surviving drainage or levee district may, upon respective motions, enter an order to conduct one or more hearings regarding a proposed merger. If the board of at least one proposed old district or the board of the proposed surviving district orders a hearing, all of the following applies:
   1.  A hearing shall be conducted within forty days after the date the order to conduct the hearing is entered by that district’s board.
   2.  The proposed surviving drainage or levee district shall immediately provide notice of each hearing. The notice may be provided by any of the following:
   a.  Personal delivery to the same persons and in the same manner as provided in section 468.257, subsection 2.
   b.  Publication once each week for two consecutive weeks in a newspaper published in each county where the proposed old and surviving drainage or levee districts are located. The notice must at a minimum describe the purpose of the hearing and the time and date of the hearing.
   3.
  a.  The boards of one or more proposed old drainage or levee districts and the board of a proposed surviving drainage or levee district may conduct the hearings jointly.
   b.  Nothing in this section prevents a proposed old or a proposed surviving drainage and levee district board from convening and conducting a hearing in a manner consistent with section 468.258.
   4.  The boards of the proposed old district and the proposed surviving district may vote on the question to merge. However, the vote must be within forty-five days of the last hearing.
   5.  Upon the affirmative vote by the board of at least one proposed old district and the board of the proposed surviving district, the boards shall meet jointly to vote for the adoption of a merger resolution. The resolution shall be deemed disapproved unless the boards, meeting jointly, vote to approve the resolution within forty-five days after the last district voted to approve the merger. Any costs associated with conducting a joint meeting shall be borne by the district proposed to be the surviving district, regardless of the outcome of the vote.
    Sec. 4.  NEW SECTION.  468.265  Joint order for merger.
   A merger approved by the board of at least one old drainage or levee district and the board of a surviving drainage or levee district as provided in this section shall be effectuated according to the terms and conditions of a joint order for merger entered by those boards.
   1.  The joint order shall be filed with the county auditor of the county in which the surviving drainage or levee district is located and noted on the drainage record in the same manner as provided in section 468.258.
   2.  Upon the filing of the joint order with the county auditor as provided in subsection 1, all of the following applies:
   a.  The title to all real estate, other property, improvement, and any right-of-way held by an old drainage or levee district is vested in the surviving drainage or levee district, subject to any condition which applied immediately prior to the merger.
   b.  The surviving drainage or levee district assumes all existing obligations of an old drainage or levee district.
   c.  A proceeding pending against an old drainage or levee district may be continued as if the merger did not occur or the surviving drainage or levee district may be substituted in the proceeding for the old drainage or levee district.
   d.  The merger does not affect a classification of land or the levy of assessments.
   e.  The original cost and the subsequent cost of improvements in the old drainage or levee district shall be added to and become a part of the original cost and the subsequent cost of improvements in the surviving district.
   3.  The surviving drainage or levee district shall pay any remaining costs associated with the merger.
    Sec. 5.  DIRECTIONS TO CODE EDITOR.  The Code editor shall codify the provisions of this Act as chapter 468, subchapter I, part 7.

DIVISION II

BIDDING PROCEDURES
    Sec. 6.  Section 468.34, Code 2013, is amended by striking the section and inserting in lieu thereof the following:
   468.34  Bidding procedures —— Iowa Construction Bidding Procedures Act.
   When ordering the construction of an improvement under this part, the board and any bidders shall comply with the competitive bid requirements applicable to a governmental entity ordering the construction of a public improvement in chapter 26.
    Sec. 7.  Section 468.66, Code 2013, is amended to read as follows:
   468.66  Bids required.
   In case the board shall finally determine
 
determines that any such changes as defined
 
a change described in section 468.62 shall be made involving an expenditure of twenty thousand dollars or more
 
increases the cost of the improvement to more than the competitive bid threshold as provided in section 26.3, the work shall be let by bids in the same manner as is provided for the original construction of such improvements
 
board and any bidders shall comply with the competitive bid requirements applicable to a governing entity ordering the construction of a public improvement in chapter 26.
    Sec. 8.  Section 468.126, subsection 1, paragraph c, Code 2013, is amended by striking the paragraph and inserting in lieu thereof the following:
   c.  When ordering a repair under this section, the board and any bidders shall comply with the competitive bid requirements applicable to a governing entity ordering the construction of a public improvement in chapter 26.
    Sec. 9.  Section 468.126, subsection 2, Code 2013, is amended to read as follows:
   2.  In the case of minor repairs
 
not in excess of the competitive bid threshold as provided in section 26.3, or in the eradication of brush and weeds along the open ditches, not in excess of twenty thousand dollars, where the board finds that a saving to the district will result, the board may cause the repairs or eradication to be done by secondary road fund equipment, or weed fund equipment, and labor of the county and then reimburse the secondary road fund or the weed fund from the fund of the drainage district thus benefited.
    Sec. 10.  Section 468.126, subsection 4, Code 2013, is amended to read as follows:
   4.  For the purpose of this subsection, an “improvement” in a drainage or levee district in which any ditch, tile drain or other facility has previously been constructed is a project intended to expand, enlarge, or otherwise increase the capacity of any existing ditch, drain, or other facility above that for which it was designed.
   a.  When the board determines that improvements are
 
an improvement is necessary or desirable, the board shall appoint an engineer to make surveys as seem appropriate to determine the nature and extent of the needed improvements
 
improvement, and to file a report showing what improvements are
 
improvement is recommended and their
 
its estimated costs
 
cost, which report may be amended before final action. If the estimated cost of the improvements does not exceed twenty thousand dollars, or twenty-five percent of the original cost of the district and subsequent improvements, whichever is the greater amount, the board may order the work done without notice. The board shall not divide proposed improvements into separate programs in order to avoid the limitation for making improvements without notice
 
compliance with paragraph “b”. If the board deems it desirable to make improvements where the estimated cost exceeds the twenty thousand dollar or twenty-five percent limit, the board shall set a date for a hearing on the matter of constructing the proposed improvements and also on the matter of whether there shall be a reclassification of benefits for the cost of the proposed improvements and shall give notice as provided in sections 468.14 through 468.18. At the hearing, the board shall hear objections to the feasibility of the proposed improvements and arguments for or against a reclassification presented by or for any taxpayer of the district. Following the
 
a hearing, if required by section 26.12, the board shall order that the improvements it deems desirable and feasible be made and shall also determine whether there should be a reclassification of benefits for the cost of improvements. If it is determined that a reclassification of benefits should be made, the board shall proceed as provided in section 468.38. In lieu of publishing the notice of a hearing as provided by this subsection
 
section 362.3, the board may mail a copy of the notice to each address where a landowner in the district resides by first class mail if the cost of mailing is less than publication of the notice. The mailing shall be made during the time the notice would otherwise be required to be published.
   b.  When ordering the construction of an improvement under this subsection, the board shall comply with the competitive bid requirements applicable to a governing entity ordering the construction of a public improvement in chapter 26.
   c.  If the estimated cost of the improvements as defined in this subsection exceeds twenty-five thousand dollars
 
the competitive bid threshold as provided in section 26.3, or the original cost of the district plus the cost of subsequent improvements in the district, whichever is the greater amount, a majority of the landowners, owning in the aggregate more than seventy percent of the total land in the district, may file a written remonstrance against the proposed improvements, at or before the time fixed for hearing on the proposed improvements, with the county auditor, or auditors in case the district extends into more than one county. If a remonstrance is filed, the board shall discontinue and dismiss all further proceedings on the proposed improvements and charge the costs incurred to date for the proposed improvements to the district. Any interested party may appeal from such orders in the manner provided in this subchapter, parts 1 through 5. However, this section does not affect the procedures of section 468.132 covering the common outlet.
    Sec. 11.  REPEAL.  Sections 468.35 and 468.36, Code 2013, are repealed.

DIVISION III

ANNEXED LAND
    Sec. 12.  Section 468.121, Code 2013, is amended to read as follows:
   468.121  Levy
 
Assessment levied on annexed lands.
   After annexation is made
 
territory has been annexed by a drainage or levee district, the board may levy upon the annexed lands an assessment sufficient to equal the assessments for benefit originally paid by the lands of equal classification if the finding by the board as provided by section 468.119 was that the lands should have been included in the district when originally established, plus their proportionate share of the costs of any enlargement or extension of drains required to serve the annexed lands. If the finding of the board as provided in section 468.119 was based on the fact that additional lands are now benefited by virtue of the repair, improvement, or the change of the topographical conditions made to the district and were not benefited by the district as originally established, then the board shall levy upon the annexed lands an assessment sufficient to pay their
 
the proportionate share of the costs of the repair or improvement which was the basis for the lands being annexed. If the board finds that the lands are presently receiving benefits from the district but that some were reasonably omitted from the original establishment because of the change of the topographical conditions, the assessments levied upon the annexed lands shall be limited to a proportionate share of the costs of current and future maintenance, repairs, and improvements.
    Sec. 13.  NEW SECTION.  468.121A  Ordinary and special assessment on annexed lands.
   1.  After annexed lands have been classified and the benefits determined as provided in section 468.120, such classification shall be the basis for all future assessments in the district as which shall be imposed as provided in this subchapter.
   2.  In addition to the assessment described in subsection 1, the board may impose a special assessment on the annexed lands for the cost of improvements made within the district for not longer than five years prior to the date of annexation.
   a.  In order to impose the special assessment the board must approve a report by an engineer appointed by the board as provided in this subchapter stating those improvements directly benefiting the annexed land made within the five-year period.
   b.  The amount of the special assessment shall not exceed the amount that would have been assessed if the annexed land were part of the drainage or levee district during the five previous years.
   c.  This board shall not impose the special assessment if the annexed land is subject to an assessment levied pursuant to section 468.121.

DIVISION IV

AGREEMENTS
    Sec. 14.  Section 468.187, Code 2013, is amended to read as follows:
   468.187  Agreements with outside owners or other districts.
   1.  Levee and drainage districts are empowered to enter into agreements with the owners of lands lying
 
inside or outside of said districts, or with other levee and drainage districts or municipalities, to provide levee protection or drainage for such lands on such terms as the board may agree and subject to the following terms and conditions:
   1.

a.  The facilities of the district furnishing the service shall not be overburdened.
   2.

b.  There shall be no additional cost to the district furnishing the service.
   3.

c.  The agreement shall be in writing, be made a part of the drainage records and shall include
 
all of the following:
   a.

(1)  The description of the lands to be served;.
   b.

(2)  The location of tile lines constructed or to be constructed;.
   c.

(3)  The consideration to be paid to the district furnishing the service and the classification of the lands to be served; and.
   d.

(4)  Such other provisions as the board deems necessary.
   2.  The provisions in an agreement described in subsection 1 modify other provisions of this chapter applicable to such lands.
EXPLANATION
   BACKGROUND. When a drainage or levee district is first established, it is managed by a board of supervisors in the county where the district is located or by a joint board of supervisors if the district extends into more than one county (Code chapter 468, subchapter I). After the district has been established, the board of supervisors, or joint board of supervisors, may transfer its jurisdiction to another governing body, including a three-member board of elected trustees.
   MERGER. This bill provides that one or more drainage or levee districts may merge with another levee or drainage district in such a manner that the surviving drainage or levee district continues to exist and absorbs each old drainage or levee district which dissolves. In order for a merger to occur, the districts must have adjacent borders, the districts must include one or more levees, and the respective boards of the districts must determine that the merger will benefit their district’s landowners. The boards of each proposed old district and the proposed surviving district must conduct hearings separately or jointly. If the merger is approved by at least one proposed old district and the board of the proposed surviving district, the boards must meet jointly to vote for the adoption of a merger resolution. The effect of the resolution is to transfer and vest to the surviving district title to real estate or other property and rights-of-way held by an old district. The surviving district assumes all existing obligations of an old district. The merger does not affect a classification of land or the levy of assessments. The bill directs the Code editor to organize these provisions as a new part 7 of Code chapter 468, subchapter I.
   BIDDING PROCEDURES. A number of provisions require the board to advertise for bids when awarding contracts to construct an improvement or make a repair. The provisions usually require the board to publish a notice in a newspaper, hold a hearing, opening bid responses, posting bonds, and awarding contracts (Code sections 468.34 through 468.37). These provisions apply if the amount of the work exceeds a certain threshold ($20,000). However, the “Iowa Construction Bidding Procedures Act” (Code chapter 26) provides similar requirements for a “governmental entity” defined in part to mean the state, political subdivisions of the state, and all boards or commissions empowered to enter into contracts for the construction of public improvements. The threshold that triggers those requirements is an amount in excess of $100,000. The bill requires the board to follow the competitive bid requirements of Code chapter 26.
   ANNEXED LAND —— ASSESSMENTS. The bill amends provisions which allow a drainage or levee district to annex territory for purposes of ensuring that persons benefiting from a district also pay for its maintenance (Code section 468.119). The bill provides that after the annexed lands have been classified and the benefits determined by the board, the classifications shall be used as the basis for future assessments. In addition, the board may impose a special assessment on the annexed lands for the cost of improvements made within the district for not longer than five years prior to the date of annexation. The amount of the special assessment cannot exceed the amount that would have been assessed if the annexed lands were part of the drainage or levee district during that period. A board which uses this option cannot also assess the land based on current law which provides that the board may impose a levy on assessed land for a cost originally assumed by the district but where not assessed upon the annexed land because such land was not included due to oversight (Code section 468.121).
   USE OF AGREEMENTS. The bill amends a provision that authorizes the board to enter into agreements with an owner of land located outside the district, or another district or city, in a manner that benefits that outside party (e.g., extending levee protection) subject to a number of conditions (the facilities of the district cannot be overburdened, there cannot be any additional cost to the district, and the agreement must be part of the district’s records). The bill provides that the district may enter into an agreement with an owner of land located within the district. It also provides that the agreement’s provisions may modify any other applicable provision in drainage law.