H.F. 588 Section 1. Section 331.488, subsection 3, Code 2013, is 1 amended to read as follows: 2 3. The method of specially assessing and determining 3 benefits and determining individual benefits, area benefits, 4 and community benefits . 5 Sec. 2. Section 384.37, Code 2013, is amended by adding the 6 following new subsections: 7 NEW SUBSECTION . 2A. “Area benefit” means the benefit 8 derived from all or a part of a public improvement that is 9 designated to principally serve a district and be accessible 10 for use by all lots within the district. 11 NEW SUBSECTION . 2B. “Community benefit” means that portion 12 of the total benefit derived from a public improvement designed 13 to be used by or serve the general public and community that 14 is in excess of the area benefit or the sum of all individual 15 benefits, if any, including but not limited to those public 16 improvements or parts of a public improvement specified in 17 section 384.61, subsection 4. 18 NEW SUBSECTION . 8A. “Individual benefit” means that 19 amount of the total benefit of a public improvement that is 20 proportionate to the lot’s use of the public improvement or 21 the amount of a benefit conferred upon the individual lot by a 22 public improvement that is intended to benefit, serve, or be 23 used only by the lot, including but not limited to those items 24 specified in section 384.61, subsection 3. 25 Sec. 3. Section 384.37, subsections 4 and 25, Code 2013, are 26 amended to read as follows: 27 4. “District” means the lots or parts of lots within 28 boundaries of a benefited area established by the council 29 for the purpose of the assessment of all or part of the cost 30 of a public improvement that is intended in whole or in part 31 to principally serve the benefited area and to provide an 32 individual benefit to and be accessible for use by such lots 33 or parts of lots . 34 25. “Street improvement” means the construction or repair of 35 -1- LSB 1543HV (2) 85 md/sc 1/ 13

H.F. 588 a street by grading, paving, curbing, guttering, and surfacing 1 with oil, oil and gravel, or chloride, and street lighting 2 fixtures, connections and facilities , storm water management 3 intakes, sewers, and facilities, and traffic-control devices, 4 fixtures, connections, and facilities . 5 Sec. 4. NEW SECTION . 384.37A Exceptions —— applicability. 6 1. This division applies to cities with a population in 7 excess of three thousand. 8 2. A city having a population of three thousand or less 9 may assess to private property within the city the cost of 10 construction and repair of public improvements within the 11 city, and main sewers, sewage pumping stations, disposal 12 and treatment plants, waterworks, water mains, extensions, 13 and drainage conduits extending outside the city. However, 14 the imposition of such a special assessment by a city with 15 a population of three thousand or less is subject to the 16 requirements and procedures of chapter 384, division IV, Code 17 2013. 18 Sec. 5. Section 384.38, subsection 1, Code 2013, is amended 19 to read as follows: 20 1. A city may , subject to the limitations of this division, 21 assess to private property within the city the cost of 22 construction and repair of public improvements within the 23 city, and main sewers, sewage pumping stations, disposal and 24 treatment plants, waterworks, water mains, extensions, and 25 drainage conduits extending outside the city. However, such 26 an assessment to private property, as allocated to each lot, 27 shall not exceed that portion of the total assessment that is 28 proportionate to the individual benefit to the lot as compared 29 to the total benefit of the public improvement. 30 Sec. 6. Section 384.42, Code 2013, is amended by adding the 31 following new subsection: 32 NEW SUBSECTION . 01. Prior to initiating procedures to 33 determine the amount of benefit that will be conferred upon 34 private property as the result of a public improvement for 35 -2- LSB 1543HV (2) 85 md/sc 2/ 13

H.F. 588 which a special assessment will be imposed and prior to the 1 adoption of a preliminary resolution under subsection 2, adopt 2 a master ordinance after a public hearing the notice of which 3 is published thirty days prior to the hearing in accordance 4 with section 362.3, setting forth, in accordance with this 5 division, the methodology and procedure to be used by the city 6 for all future special assessments in determining the amount 7 of individual benefit, area benefit, and community benefit 8 that will result from a public improvement and a description 9 of the manner in which the cost of a public improvement will be 10 allocated to each category of benefit. 11 Sec. 7. Section 384.42, subsections 1, 2, and 3, Code 2013, 12 are amended to read as follows: 13 1. Arrange for engineering services to prepare the plats, 14 schedules, estimates of cost, plans, and specifications and 15 to supervise construction of the proposed improvement , and if 16 necessary, arrange for planning studies or engineering studies 17 to determine the amount of benefit that will be conferred upon 18 private property as the result of the public improvement . 19 2. Adopt a preliminary resolution by the vote of a majority 20 of all the members of the council , after a public hearing the 21 notice of which is published thirty days prior to the hearing 22 in accordance with section 362.3 . The notice shall also be 23 sent by certified mail no later than thirty days prior to 24 the public hearing to each owner of a lot which the council 25 believes will be individually benefited by the improvement. 26 The preliminary resolution shall contain the following: 27 a. A description of the types or alternate types of 28 improvement proposed. 29 b. The beginning and terminal points or general location of 30 the proposed improvement. 31 c. An order to the engineer to prepare preliminary plans and 32 specifications, estimated total cost of the work, and a plat 33 and schedule, and to file them with the clerk. 34 d. A general description of the property or a designation 35 -3- LSB 1543HV (2) 85 md/sc 3/ 13

H.F. 588 of the lots which the council believes will be specially 1 individually benefited by the improvement. 2 e. A detailed description of the method used for determining 3 benefits in accordance with the ordinance adopted under 4 subsection 01, an estimate of the proportion of area benefit 5 and community benefit that will be conferred as a result of the 6 public improvement, a statement of the proportion of the total 7 cost of the public improvement that the council proposes to 8 assess against all individually benefited property within the 9 proposed district, and a statement of the method by which that 10 portion of the total cost of the public improvement proposed 11 to be assessed against individually benefited property in the 12 proposed district will be allocated to each lot as the result 13 of individual benefits conferred on the lots. 14 3. The preliminary resolution may also contain the 15 following: 16 a. A statement of the proportion of the total cost which 17 the council proposes to assess against specially benefited 18 property. 19 b. A a short and convenient designation for the public 20 improvement by which it may be referred to in all subsequent 21 proceedings. 22 Sec. 8. Section 384.44, Code 2013, is amended to read as 23 follows: 24 384.44 Estimated cost. 25 The estimated total cost of any public improvement 26 constructed under this part must include all of the items 27 of cost listed in section 384.37, subsection 26 , which the 28 council proposes to include as a part of the cost of the public 29 improvement, and may include an item to be known as the default 30 fund amounting to not more than ten percent of the portion of 31 the total cost of the improvement which the council proposes to 32 assess against specially individually benefited property. 33 Sec. 9. Section 384.47, subsections 3 through 5, Code 2013, 34 are amended to read as follows: 35 -4- LSB 1543HV (2) 85 md/sc 4/ 13

H.F. 588 3. The total amount proposed to be assessed to each 1 lot according to the method described in the preliminary 2 resolution , including the assessment for the default fund, if 3 any. 4 4. The proportion of the estimated total cost of the public 5 improvement which is allocated to each lot as an individual 6 benefit . 7 5. The amount of deficiency, if any, between the amount 8 proposed to be assessed and the proportion of the estimated 9 total cost of the public improvement allocated to each lot 10 as an individual benefit . The amount of deficiency shall be 11 shown as a conditional deficiency assessment as authorized by 12 sections 384.60 , 384.62 and 384.63 . 13 Sec. 10. Section 384.51, unnumbered paragraph 2, Code 2013, 14 is amended to read as follows: 15 An amendment which extends the boundaries of a district, 16 increases the amount to be assessed against a lot, or adds 17 additional public improvements, is not effective until an 18 amended ordinance, if necessary, plat, schedule, and estimate 19 have been prepared and adopted, a notice published and 20 mailed to all affected property owners, and hearing held in 21 the same manner as the original proceedings, or until all 22 affected property owners agree in writing to the change. 23 The adoption of a resolution of necessity is a legislative 24 determination that the improvement is expedient and proper and 25 that property assessed will be specially individually benefited 26 by the improvement and this determination of the council 27 is conclusive. Ownership of property to be assessed by an 28 improvement does not, except for fraud or bad faith, disqualify 29 a council member from voting on any measure. 30 Sec. 11. Section 384.54, subsection 15, Code 2013, is 31 amended to read as follows: 32 15. a. The cost of all court proceedings are a legitimate 33 item of expense in connection with a public improvement, 34 and may be included within the final assessment against any 35 -5- LSB 1543HV (2) 85 md/sc 5/ 13

H.F. 588 property specially benefited in the assessment district. 1 b. Whenever on a hearing by the court, the amount of any 2 assessment is reduced or canceled so that there is a deficiency 3 in the total amount remaining assessed in the proceeding, the 4 court may assess the deficiency to the city or distribute the 5 deficiency upon the other property abutting upon or adjacent to 6 the improvement or lots benefiting from the improvement in the 7 district assessed, in a manner the court finds to be just and 8 equitable consistent with this chapter , not exceeding, however, 9 the amount the property lot would be specially individually 10 benefited by the improvement, and not exceeding twenty-five 11 percent of the value of the lot as shown by the plat and 12 schedule of assessments or as reduced by the court. 13 Sec. 12. Section 384.61, Code 2013, is amended to read as 14 follows: 15 384.61 Assessment of benefits. 16 1. The total cost of a public improvement, except for 17 paving that portion of a street lying between railroad 18 tracks and one foot outside of the tracks, or which is to 19 be otherwise paid, must may be assessed against all lots 20 within the assessment district in accordance with the special 21 individual benefits conferred upon the property, and not in 22 excess of such benefits. That portion of the total cost of 23 a public improvement that is not assessed to individual lots 24 in the district as the result of individual benefits shall be 25 attributable to the community benefit and shall be paid by the 26 city. 27 2. A lot that is subject to a special assessment may be 28 divided into two or more lots for assessment purposes upon the 29 request or consent of the property owner in order to separate 30 existing building sites from those portions of the lot that are 31 used for agricultural purposes or vacant land to be reserved 32 for development purposes. If an owner of property subject to 33 special assessment divides the property into two or more lots, 34 and if the plan of division is approved by the council, the 35 -6- LSB 1543HV (2) 85 md/sc 6/ 13

H.F. 588 owner may discharge the lien upon any of the lots by payment of 1 the amount unpaid, calculated as determined by the council. 2 3. All of the following public improvements are presumed to 3 confer an individual benefit on a lot within a district: 4 a. A public improvement that benefits, serves, or that 5 is intended for use by only one lot, unless such public 6 improvement is replacing an existing public improvement of 7 acceptable or working quality and is required as a result of 8 work on or repair of another public improvement that does not 9 benefit, serve, or that is not intended for use by only that 10 lot. 11 b. A sidewalk upon a lot that is single-family residential 12 property located along the frontage of the lot not to exceed 13 four feet in width at a standard thickness. 14 c. A sidewalk upon a lot that is commercial property, 15 industrial property, multifamily residential property, or 16 property owned by a business entity as defined in section 17 501A.102, located along the street frontage of the lot not to 18 exceed six feet in width at a standard thickness. 19 d. Underground gas, water, heating, sanitary sewer, storm 20 sewer, and electrical connections and accessories located in a 21 public street right-of-way and that serve only the lot. 22 e. The portion of an area benefit which is proportionate 23 to a lot’s forecasted use of the public improvement as a share 24 of the forecasted use of the public improvement by all lots in 25 the district. 26 4. All of the following public improvements are presumed to 27 confer a community benefit: 28 a. A public improvement or part of a public improvement that 29 is designed, constructed, or intended, due to additional size, 30 standards, facilities, or structures, for use by or to serve 31 property outside the district or the general public. 32 b. A sidewalk or recreational trail, or part thereof, that 33 is part of a community-wide public recreational trail system. 34 c. The portion of a sidewalk that exceeds the portion of 35 -7- LSB 1543HV (2) 85 md/sc 7/ 13

H.F. 588 the sidewalk that provides an area benefit or presumed to be an 1 individual benefit under subsection 3, paragraph “b” or “c” . 2 d. Notwithstanding any provision of this division to the 3 contrary, the planning, legal, administrative, engineering, and 4 inspection costs for that portion of the public improvement 5 that is a community benefit and all city employee salary costs 6 associated with the public improvement. 7 5. a. Notwithstanding any other provision in this 8 division to the contrary, each city undertaking the repair 9 or construction of a public improvement that includes a 10 street improvement paid for in whole or in part by a special 11 assessment shall, prior to the preparation of the schedule 12 under section 384.47, complete a vehicle traffic analysis and 13 forecast for the location of the proposed street improvement 14 that includes but is not limited to the following: 15 (1) A determination of the amount of vehicle traffic 16 forecasted to be generated from each lot or part of a lot 17 within the district for use in determining both the individual 18 benefits and area benefits. 19 (2) A determination of both the vehicle traffic forecasted 20 to be generated by existing sources outside of the district 21 after completion of the street improvement and the vehicle 22 traffic forecasted to be generated from land development 23 projects and uses outside of the district that are or will 24 be developed concurrently, in conjunction with, or following 25 completion of the street improvement for use in determining the 26 community benefit. 27 b. Those portions of the vehicle traffic analysis and 28 forecast relating to the amount of vehicle traffic generated 29 by each lot or part of a lot in the district after completion 30 of the street improvement shall be based on the estimated 31 development of such lots or parts of lots within ten years 32 after completion of the street improvement. The estimate of 33 the extent of development shall be made in accordance with 34 development estimates and trends of similar property in the 35 -8- LSB 1543HV (2) 85 md/sc 8/ 13

H.F. 588 local area, the zoning and use restrictions imposed on or 1 proposed for the property, and the availability of necessary 2 infrastructure to develop the property. In addition to actual 3 vehicle traffic data available to the city, the vehicle traffic 4 analysis and forecast shall be completed using the most current 5 trip generation data from the institute of transportation 6 engineers for planned land uses or another generally recognized 7 organization. 8 c. The individual benefit accruing to each lot within 9 the district as the result of the street improvement shall 10 not exceed the percentage of the area benefit from the 11 street improvement that is proportionate to the lot’s 12 forecasted amount of traffic generated as it bears to the 13 total forecasted amount of vehicle traffic generated in the 14 district. Additionally, in no case shall a lot or a part of a 15 lot be assessed for the improvements to a major road, including 16 but not limited to a road classified as an arterial road, 17 classified as a major collector road, or a road previously 18 under the jurisdiction of a county, if such lot or part of a lot 19 was previously assessed for improvements to another such major 20 road. 21 Sec. 13. Section 384.63, subsection 2, Code 2013, is amended 22 to read as follows: 23 2. The council shall, by resolution, provide that the 24 deficiencies for the lots specially individually benefited by a 25 public improvement shall be certified to the county treasurer, 26 who shall record them in the county system as “special 27 assessment deficiencies”, and to the appropriate city official 28 charged with the responsibility of issuing building permits, 29 who shall notify the council when a private improvement is 30 subsequently constructed on any lot subject to a deficiency. 31 Certification to the county treasurer shall include a legal 32 description of each lot. The period of amortization for a 33 public improvement for which there are deficiencies shall 34 commence with the adoption of the resolution of necessity 35 -9- LSB 1543HV (2) 85 md/sc 9/ 13

H.F. 588 and extend for the same period for which installments of 1 assessments for the project are made payable. Deficiencies may 2 be assessed only during the period of amortization, which shall 3 also be certified to the county treasurer and the city official 4 charged with the responsibility of issuing building permits. 5 Certification to the county treasurer shall include a legal 6 description of each lot. 7 Sec. 14. APPLICABILITY. This Act applies to public 8 improvements undertaken on or after July 1, 2013. 9 EXPLANATION 10 This bill relates to special assessments imposed by cities 11 and counties on private property for the cost of a public 12 improvement. 13 The bill provides that Code chapter 384, division IV, as 14 amended in the bill, applies to cities with a population in 15 excess of 3,000. A city having a population of 3,000 or 16 less is authorized to continue to impose special assessments 17 pursuant to the requirements and procedures of Code chapter 18 384, division IV, Code 2013. 19 The bill establishes definitions of “community benefit”, 20 “area benefit”, and “individual benefit” under Code chapter 21 384, division IV. The bill also adds storm water management 22 intakes, sewers, and facilities and traffic-control devices, 23 fixtures, connections, and facilities to the definition of 24 “street improvement” under Code section 384.37. 25 The bill amends the definition of “district” in Code section 26 384.37 to mean the lots or parts of lots within boundaries of 27 a benefited area established by the council for the purpose 28 of the assessment of all or part of the cost of a public 29 improvement that is intended in whole or in part to principally 30 serve the benefited area and to provide an individual benefit 31 to and be accessible for use by such lots or parts of lots. 32 The bill provides that assessments to private property, 33 as allocated to each lot, shall not exceed that portion of 34 the total assessment that is proportionate to the individual 35 -10- LSB 1543HV (2) 85 md/sc 10/ 13

H.F. 588 benefit to the lot as compared to the total benefit of the 1 public improvement. 2 The bill requires that before a city initiates procedures 3 to determine the amount of benefit that will be conferred 4 upon private property as the result of a public improvement 5 for which a special assessment will be imposed and prior to 6 the adoption of a preliminary resolution related to a public 7 improvement, a city must adopt a master ordinance, after 8 specified notices and a hearing, setting forth the methodology 9 and procedure to be used by the city for all future special 10 assessments in determining the amount of individual benefit, 11 area benefit, and community benefit that will result from a 12 public improvement and a description of the manner in which the 13 cost of a public improvement will be allocated to each category 14 of benefit. 15 The bill requires that 30 days’ notice of a preliminary 16 resolution be published prior to adoption of the preliminary 17 resolution related to a public improvement. The bill also 18 requires such notice to be sent to the owner of each lot which 19 the city council believes will be individually benefited by the 20 improvement. The bill specifies additional information that 21 must be included in the preliminary resolution. 22 The bill strikes the provision of Code section 384.54 that 23 designated the cost of all court proceedings to be a legitimate 24 item of expense in connection with a public improvement and 25 allowed such costs to be included within the final assessment 26 against any property specially benefited in the assessment 27 district. 28 The bill specifies that the total cost of a public 29 improvement, except for certain paving near railroad tracks 30 or improvements to be otherwise paid, may be assessed against 31 all lots within the assessment district in accordance with the 32 individual benefits conferred upon the property, and not in 33 excess of such benefits. The bill provides that the portion 34 of the total cost of a public improvement that is not assessed 35 -11- LSB 1543HV (2) 85 md/sc 11/ 13

H.F. 588 to individual lots as the result of individual benefits is 1 attributable to the community benefit and shall be paid by the 2 city. 3 The bill allows a lot that is subject to a special assessment 4 to be divided into two or more lots for assessment purposes 5 upon the request or consent of the property owner in order to 6 separate existing building sites from those portions of the lot 7 that are used for agricultural purposes or vacant land to be 8 reserved for development purposes. 9 The bill designates certain public improvements that are 10 presumed to confer an individual benefit and designates certain 11 public improvements that are presumed to confer a community 12 benefit. Under the bill, the planning, legal, administrative, 13 engineering, and inspection costs for that portion of the 14 public improvement that is a community benefit and all city 15 employee salary costs associated with the public improvement 16 are presumed to confer a community benefit. 17 The bill requires each city undertaking the repair or 18 construction of a public improvement that includes a street 19 improvement, as defined in the bill, and paid for in whole or 20 in part by a special assessment, to complete a vehicle traffic 21 analysis and forecast for the location of the proposed street 22 improvement in order to determine the individual benefits and 23 the area benefit and the community benefit. 24 The bill provides that those portions of the vehicle traffic 25 analysis and forecast relating to the amount of vehicle traffic 26 generated by each lot or part of a lot in the district after 27 completion of the street improvement shall be based on the 28 estimated development of such lots or parts of lots within 10 29 years after completion of the street improvement. The estimate 30 of the extent of development shall be made in accordance with 31 development estimates and trends of similar property in the 32 local area, the zoning and use restrictions imposed on or 33 proposed for the property, and the availability of necessary 34 infrastructure to develop the property. 35 -12- LSB 1543HV (2) 85 md/sc 12/ 13

H.F. 588 In addition to actual vehicle traffic data available 1 to the city, the bill requires that the vehicle traffic 2 analysis and forecast must be completed using the most current 3 trip generation data from the institute of transportation 4 engineers for planned land uses or another generally recognized 5 organization. 6 The bill specifies that the individual benefit accruing 7 to each lot within the district as the result of the street 8 improvement shall not exceed the percentage of the area benefit 9 from the street improvement that is proportionate to the lot’s 10 forecasted amount of traffic generated as it bears to the total 11 forecasted amount of vehicle traffic generated in the district. 12 The bill also specifies that in no case shall a lot or a 13 part of a lot be assessed for the improvements to a major road, 14 including but not limited to a road classified as an arterial 15 road or a major collector road, or a road previously under the 16 jurisdiction of a county, if such lot or part of a lot was 17 previously assessed for improvements to another such major 18 road. 19 By operation of law, the bill modifies similar provisions 20 relating to the authority of a county to assess to property the 21 costs of a public improvement under Code chapter 331 and the 22 authority of a sanitary district under Code chapter 358. 23 This Act applies to public improvements undertaken on or 24 after July 1, 2013. 25 -13- LSB 1543HV (2) 85 md/sc 13/ 13