H.F. _____ 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 1543YC (1) 85 md/sc 1/ 13

H.F. _____ 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. Section 384.38, subsection 1, Code 2013, is amended 6 to read as follows: 7 1. A city may , subject to the limitations of this division, 8 assess to private property within the city the cost of 9 construction and repair of public improvements within the 10 city, and main sewers, sewage pumping stations, disposal and 11 treatment plants, waterworks, water mains, extensions, and 12 drainage conduits extending outside the city. However, such 13 an assessment to private property, as allocated to each lot, 14 shall not exceed that portion of the total assessment that is 15 proportionate to the individual benefit to the lot as compared 16 to the total benefit of the public improvement. 17 Sec. 5. Section 384.42, Code 2013, is amended by adding the 18 following new subsection: 19 NEW SUBSECTION . 01. Prior to arranging for engineering 20 services under subsection 1 and the adoption of a preliminary 21 resolution under subsection 2, the city shall adopt an 22 ordinance after thirty days’ notice, published in accordance 23 with section 362.3, and a public hearing, setting forth, in 24 accordance with this division, the methodology and procedure 25 to be used by the city for all future special assessments in 26 determining the amount of individual benefit, area benefit, and 27 community benefit that will result from a public improvement 28 and a description of the manner in which the cost of a public 29 improvement will be allocated to each category of benefit. 30 Sec. 6. Section 384.42, subsections 2 and 3, Code 2013, are 31 amended to read as follows: 32 2. Adopt a preliminary resolution by the vote of a majority 33 of all the members of the council , after forty-five days’ 34 notice of the preliminary resolution published in accordance 35 -2- LSB 1543YC (1) 85 md/sc 2/ 13

H.F. _____ with section 362.3 . The preliminary resolution shall contain 1 the following: 2 a. A description of the types or alternate types of 3 improvement proposed. 4 b. The beginning and terminal points or general location of 5 the proposed improvement. 6 c. An order to the engineer to prepare preliminary plans and 7 specifications, estimated total cost of the work, and a plat 8 and schedule, and to file them with the clerk. 9 d. A general description of the property or a designation 10 of the lots which the council believes will be specially 11 individually benefited by the improvement. 12 e. A detailed description of the method used for determining 13 benefits in accordance with the ordinance adopted under 14 subsection 01, an estimate of the amount of individual benefit, 15 area benefit, and community benefit that will be conferred as 16 a result of the public improvement, and a statement of the 17 proportion of the total cost of the public improvement that the 18 council proposes to assess against each lot within the proposed 19 district. 20 3. The preliminary resolution may also contain the 21 following: 22 a. A statement of the proportion of the total cost which 23 the council proposes to assess against specially benefited 24 property. 25 b. A a short and convenient designation for the public 26 improvement by which it may be referred to in all subsequent 27 proceedings. 28 Sec. 7. Section 384.44, Code 2013, is amended to read as 29 follows: 30 384.44 Estimated cost. 31 The estimated total cost of any public improvement 32 constructed under this part must include all of the items 33 of cost listed in section 384.37, subsection 26 , which the 34 council proposes to include as a part of the cost of the public 35 -3- LSB 1543YC (1) 85 md/sc 3/ 13

H.F. _____ improvement, and may include an item to be known as the default 1 fund amounting to not more than ten percent of the portion of 2 the total cost of the improvement which the council proposes to 3 assess against specially individually benefited property. 4 Sec. 8. Section 384.47, subsections 3 through 5, Code 2013, 5 are amended to read as follows: 6 3. The total amount proposed to be assessed to each 7 lot according to the method described in the preliminary 8 resolution , including the assessment for the default fund, if 9 any. 10 4. The proportion of the estimated total cost of the public 11 improvement which is allocated to each lot as an individual 12 benefit . 13 5. The amount of deficiency, if any, between the amount 14 proposed to be assessed and the proportion of the estimated 15 total cost of the public improvement allocated to each lot 16 as an individual benefit . The amount of deficiency shall be 17 shown as a conditional deficiency assessment as authorized by 18 sections 384.60 , 384.62 and 384.63 . 19 Sec. 9. Section 384.51, unnumbered paragraph 2, Code 2013, 20 is amended to read as follows: 21 An amendment which extends the boundaries of a district, 22 increases the amount to be assessed against a lot, or adds 23 additional public improvements, is not effective until an 24 amended ordinance, if necessary, plat, schedule, and estimate 25 have been prepared and adopted, a notice published and 26 mailed to all affected property owners, and hearing held in 27 the same manner as the original proceedings, or until all 28 affected property owners agree in writing to the change. 29 The adoption of a resolution of necessity is a legislative 30 determination that the improvement is expedient and proper and 31 that property assessed will be specially individually benefited 32 by the improvement and this determination of the council 33 is conclusive. Ownership of property to be assessed by an 34 improvement does not, except for fraud or bad faith, disqualify 35 -4- LSB 1543YC (1) 85 md/sc 4/ 13

H.F. _____ a council member from voting on any measure. 1 Sec. 10. Section 384.54, subsection 15, Code 2013, is 2 amended to read as follows: 3 15. a. The cost of all court proceedings are a legitimate 4 item of expense in connection with a public improvement, 5 and may be included within the final assessment against any 6 property specially benefited in the assessment district. 7 b. Whenever on a hearing by the court, the amount of any 8 assessment is reduced or canceled so that there is a deficiency 9 in the total amount remaining assessed in the proceeding, the 10 court may assess the deficiency to the city or distribute the 11 deficiency upon the other property abutting upon or adjacent to 12 the improvement or lots benefiting from the improvement in the 13 district assessed, in a manner the court finds to be just and 14 equitable consistent with this chapter , not exceeding, however, 15 the amount the property lot would be specially individually 16 benefited by the improvement, and not exceeding twenty-five 17 percent of the value of the lot as shown by the plat and 18 schedule of assessments or as reduced by the court. 19 Sec. 11. Section 384.61, Code 2013, is amended to read as 20 follows: 21 384.61 Assessment of benefits. 22 1. The total cost of a public improvement, except for 23 paving that portion of a street lying between railroad 24 tracks and one foot outside of the tracks, or which is to 25 be otherwise paid, must may be assessed against all lots 26 within the assessment district in accordance with the special 27 individual benefits conferred upon the property, and not in 28 excess of such benefits. That portion of the total cost of 29 a public improvement that is not assessed to individual lots 30 in the district as the result of individual benefits shall be 31 attributable to the community benefit and shall be paid by the 32 city. 33 2. A lot that is subject to a special assessment may be 34 divided into two or more lots for assessment purposes upon the 35 -5- LSB 1543YC (1) 85 md/sc 5/ 13

H.F. _____ request or consent of the property owner in order to separate 1 existing building sites from those portions of the lot that are 2 used for agricultural purposes or vacant land to be reserved 3 for development purposes. If an owner of property subject to 4 special assessment divides the property into two or more lots, 5 and if the plan of division is approved by the council, the 6 owner may discharge the lien upon any of the lots by payment of 7 the amount unpaid, calculated as determined by the council. 8 3. All of the following public improvements are presumed to 9 confer an individual benefit on a lot within a district: 10 a. A public improvement that benefits, serves, or that 11 is intended for use by only one lot, unless such public 12 improvement is replacing an existing public improvement of 13 acceptable or working quality and is required as a result of 14 work on or repair of another public improvement that does not 15 benefit, serve, or that is not intended for use by only that 16 lot. 17 b. A sidewalk upon a lot that is single-family residential 18 property located along the frontage of the lot not to exceed 19 four feet in width at a standard thickness. 20 c. A sidewalk upon a lot that is commercial property, 21 industrial property, multifamily residential property, or 22 property owned by a business entity as defined in section 23 501A.102, located along the street frontage of the lot not to 24 exceed six feet in width at a standard thickness. 25 d. Underground gas, water, heating, sanitary sewer, storm 26 sewer, and electrical connections and accessories located in a 27 public street right-of-way and that serve only the lot. 28 e. The portion of an area benefit which is proportionate 29 to a lot’s forecasted use of the public improvement as a share 30 of the forecasted use of the public improvement by all lots in 31 the district. 32 4. All of the following public improvements are presumed to 33 confer a community benefit: 34 a. A public improvement or part of a public improvement that 35 -6- LSB 1543YC (1) 85 md/sc 6/ 13

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

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

H.F. _____ who shall notify the council when a private improvement is 1 subsequently constructed on any lot subject to a deficiency. 2 Certification to the county treasurer shall include a legal 3 description of each lot. The period of amortization for a 4 public improvement for which there are deficiencies shall 5 commence with the adoption of the resolution of necessity 6 and extend for the same period for which installments of 7 assessments for the project are made payable. Deficiencies may 8 be assessed only during the period of amortization, which shall 9 also be certified to the county treasurer and the city official 10 charged with the responsibility of issuing building permits. 11 Certification to the county treasurer shall include a legal 12 description of each lot. 13 Sec. 13. APPLICABILITY. This Act applies to public 14 improvements undertaken on or after July 1, 2013. 15 EXPLANATION 16 This bill relates to special assessments imposed by cities 17 and counties on private property for the cost of a public 18 improvement. 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 -9- LSB 1543YC (1) 85 md/sc 9/ 13

H.F. _____ benefit to the lot as compared to the total benefit of the 1 public improvement. 2 The bill requires that before a city initiates proceedings 3 to construct or repair a public improvement to be paid for 4 in whole or in part by a special assessment and prior to 5 securing the services of an engineer and prior to the adoption 6 of a preliminary resolution related to a public improvement, 7 a city must adopt an ordinance, after specified notices and 8 a hearing, setting forth the methodology and procedure to 9 be used by the city for all future special assessments in 10 determining the amount of individual benefit, area benefit, and 11 community benefit that will result from a public improvement 12 and a description of the manner in which the cost of a public 13 improvement will be allocated to each category of benefit. 14 The bill requires that 45 days’ notice of a preliminary 15 resolution be published prior to adoption of the preliminary 16 resolution related to a public improvement. The bill requires 17 the preliminary resolution to contain a detailed description 18 of the method used for determining benefits, in accordance 19 with the ordinance required to be adopted in the bill, an 20 estimate of the amount of individual benefit, area benefit, 21 and community benefit that will be conferred as a result of 22 the public improvement, and a statement of the proportion of 23 the total cost of the public improvement which the council 24 proposes to assess against each lot within the proposed special 25 assessment district. 26 The bill strikes the provision of Code section 384.54 that 27 designated the cost of all court proceedings to be a legitimate 28 item of expense in connection with a public improvement and 29 allowed such costs to be included within the final assessment 30 against any property specially benefited in the assessment 31 district. 32 The bill specifies that the total cost of a public 33 improvement, except for certain paving near railroad tracks 34 or improvements to be otherwise paid, may be assessed against 35 -10- LSB 1543YC (1) 85 md/sc 10/ 13

H.F. _____ all lots within the assessment district in accordance with the 1 individual benefits conferred upon the property, and not in 2 excess of such benefits. The bill provides that the portion 3 of the total cost of a public improvement that is not assessed 4 to individual lots as the result of individual benefits is 5 attributable to the community benefit and shall be paid by the 6 city. 7 The bill allows a lot that is subject to a special assessment 8 to be divided into two or more lots for assessment purposes 9 upon the request or consent of the property owner in order to 10 separate existing building sites from those portions of the lot 11 that are used for agricultural purposes or vacant land to be 12 reserved for development purposes. 13 The bill designates certain public improvements that are 14 presumed to confer an individual benefit and designates certain 15 public improvements that are presumed to confer a community 16 benefit. Under the bill, the planning, legal, administrative, 17 engineering, and inspection costs for that portion of the 18 public improvement that is a community benefit and all city 19 employee salary costs associated with the public improvement 20 are presumed to confer a community benefit. 21 The bill requires each city undertaking the repair or 22 construction of a public improvement that includes a street 23 improvement, as defined in the bill, and paid for in whole 24 or in part by a special assessment, to complete a vehicle 25 traffic analysis and forecast for the location of the proposed 26 street improvement that includes but is not limited to: (1) 27 a determination of the amount of vehicle traffic forecasted 28 to be generated from each lot or part of a lot within the 29 proposed district for use in determining both the individual 30 benefits and the area benefit; and (2) a determination of both 31 the vehicle traffic forecasted to be generated by existing 32 sources outside of the district after completion of the street 33 improvement and the vehicle traffic forecasted to be generated 34 from land development projects and uses outside of the district 35 -11- LSB 1543YC (1) 85 md/sc 11/ 13

H.F. _____ that are or will be developed concurrently, in conjunction 1 with, or following completion of the street improvement for use 2 in determining the community benefit. 3 The bill provides that those portions of the vehicle traffic 4 analysis and forecast relating to the amount of vehicle traffic 5 generated by each lot or part of a lot in the district after 6 completion of the street improvement shall be based on the 7 estimated development of such lots or parts of lots within 10 8 years after completion of the street improvement. The estimate 9 of the extent of development shall be made in accordance with 10 development estimates and trends of similar property in the 11 local area, the zoning and use restrictions imposed on or 12 proposed for the property, and the availability of necessary 13 infrastructure to develop the property. 14 In addition to actual vehicle traffic data available 15 to the city, the bill requires that the vehicle traffic 16 analysis and forecast must be completed using the most current 17 trip generation data from the institute of transportation 18 engineers for planned land uses or another generally recognized 19 organization. 20 The bill specifies that the individual benefit accruing 21 to each lot within the district as the result of the street 22 improvement shall not exceed the percentage of the area benefit 23 from the street improvement that is proportionate to the lot’s 24 forecasted amount of traffic generated as it bears to the total 25 forecasted amount of vehicle traffic generated in the district. 26 The bill also specifies that in no case shall a lot or a 27 part of a lot be assessed for the improvements to a major road, 28 including but not limited to a road classified as an arterial 29 road or a major collector road, or a road previously under the 30 jurisdiction of a county, if such lot or part of a lot was 31 previously assessed for improvements to another such major 32 road. 33 By operation of law, the bill modifies similar provisions 34 relating to the authority of a county to assess to property the 35 -12- LSB 1543YC (1) 85 md/sc 12/ 13