2011 Montana Legislature

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HOUSE BILL NO. 304

INTRODUCED BY G. HENDRICK

A BILL FOR AN ACT ENTITLED: "AN ACT GENERALLY REVISING LAWS GOVERNING SPECIAL DISTRICTS; PROVIDING THAT A SPECIAL DISTRICT MAY ONLY BE CREATED BY REFERENDUM OR PETITION; INCREASING THE PERCENTAGE OF VOTERS OR PROPERTY OWNERS REQUIRED FOR A PETITION; PROHIBITING THE BOUNDARIES OF A SPECIAL DISTRICT FROM BEING IDENTICAL TO BOUNDARIES OF A LOCAL GOVERNMENT UNLESS CERTAIN REQUIREMENTS ARE MET; CLARIFYING TO WHOM NOTICES OF A RESOLUTION OF INTENT TO CREATE A DISTRICT MUST BE SENT; REVISING TIMING OF A PROTEST AND WHO MAY PROTEST CREATION OF A DISTRICT; PROHIBITING CERTAIN USES OF DISTRICT FUNDS; AND AMENDING SECTIONS 7-11-1003, 7-11-1006, 7-11-1007, 7-11-1008, 7-11-1013, 7-11-1021, 7-11-1023, AND 7-11-1024, MCA."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 7-11-1003, MCA, is amended to read:

"7-11-1003. Authorization to create special districts. (1) Whenever the public convenience and necessity may require:

(a) the governing body may create order a referendum on the creation of a special district to serve the inhabitants of the special district as provided in 7-11-1011; or

(b) petitioners may initiate the creation of a special district to serve inhabitants of the special district.

(2) (a) Subject to subsection (2)(b), a petition to institute the creation of a special district must be signed by 40% at least 51% of registered voters or 40% at least 51% of owners of real property within the boundary of the proposed special district and submitted to the clerk of the governing body.

(b) If a proposed special district would be financed by a mill levy, a petition to institute the creation of the special district must be signed by 40% at least 51% of registered voters or 40% at least 51% of property taxpayers within the boundary of the proposed district.

(d) Subject to subsection (2)(c), the petition must:

(i) require the printed name of each signatory;

(ii) specify whether the signatory is a property taxpayer or owner of real property within the proposed special district and the address of that property;

(iii) describe the type of special district being proposed and the general specific character of any proposed improvements and program to be administered within the special district;

(iv) designate the method of financing any proposed improvements and program within the special district;

(v) include a general specific description of the areas to be included in the proposed special district; and

(vi) specify whether the proposed special district would be administered by the local governing body or an appointed or elected board.

(3) Within 30 days of receipt of a petition to create a special district, the clerk of the governing body shall:

(a) certify that the petition is sufficient under the provisions of subsection (2) and present it to the governing body at its next meeting; or

(b) reject the petition if it is insufficient under the provisions of subsection (2).

(4) A defect in the contents of the petition or in its title, form of notice, or signatures may not invalidate the petition and subsequent proceedings as long as the petition has a sufficient number of qualified signatures attached."

Section 2. Section 7-11-1006, MCA, is amended to read:

"7-11-1006. Determining special district boundaries. (1) The boundaries of the proposed special district must be mapped and clearly described before the district may be approved.

(2) The governing body or petitioners shall consult with a professional land surveyor, as defined in 37-67-101, to prepare a legal description of the boundaries for the proposed special district.

(3) The Subject to subsection (4), the boundaries must follow property ownership, precinct, school district, municipal, and county lines as far as practical.

(4) The boundaries of a special district may not be identical to the boundaries of a local government unless the governing body demonstrates by clear and convincing evidence that each lot or parcel within the proposed district will derive substantially equal benefit from the district program or improvements."

Section 3. Section 7-11-1007, MCA, is amended to read:

"7-11-1007. Public hearing -- resolution of intention to create special district. (1) The governing body shall hold at least one public hearing concerning the creation of a proposed special district prior to the passage of a resolution of intention to create the special district. A resolution of intention to create a special district may be based upon a decision of the governing body or must be based upon a petition that contains the required number of signatures.

(2) The resolution must designate:

(a) the proposed name of the special district;

(b) the necessity for the proposed special district;

(c) a general description of the territory or lands to be included within the proposed special district, giving the boundaries of the proposed special district;

(d) the general character of any proposed improvements and the proposed location for the proposed program or improvements;

(e) the estimated cost and method of financing the proposed program or improvements;

(f) any requirements specifically applicable to the type of special district; and

(g) whether the proposed special district would be administered by the governing body or an appointed or elected board.

(3) (a) The governing body shall publish notice of passage of the resolution of intention to create a special district as provided in 7-1-2121 and 7-1-2122 or 7-1-4127 and 7-1-4129, as applicable. The notice must contain a notice of a hearing and the time and place where the hearing will be held.

(b) At the same time that notice is published pursuant to subsection (3)(a), the governing body shall provide a list of those properties subject to potential assessment, fees, or taxation under the creation of the proposed special district. The list may not be distributed or sold for use as a mailing list in accordance with 2-6-109.

(c) A copy of the notice described in subsection (3)(a) must be mailed to the owners each owner or purchaser under contract for deed of the property included on the list referred to in subsection (3)(b) as shown by the current property tax record maintained by the department of revenue for the county."

Section 4. Section 7-11-1008, MCA, is amended to read:

"7-11-1008. Right to protest -- procedure -- hearing. (1) An owner of property that is liable to be assessed for the program or improvements in the proposed special district has 30 60 days from the date of the first publication of the notice of passage of the resolution of intention to make a written protest against the proposed program or improvements.

(2) The protest must be in writing, identify the property in the district owned by the protestor, be signed by all of the owners an owner of that property, and be delivered to the clerk of the governing body, who shall endorse on the protest the date of receipt.

(3) (a) For purposes of this section, "owner" means, as of the date a protest is filed, the a record owner of fee simple title to the property or the a contract buyer on file with the county clerk and recorder.

(b) The term does not include a tenant of or other holder of a leasehold interest in the property.

(4) An owner of property created as a condominium may protest pursuant to the provisions in 7-11-1027.

(5) (a) At the hearing provided for in 7-11-1007, the governing body shall consider all protests.

(b) In determining the sufficiency of protest, each protest must be weighted in proportion to the amount of the assessment to be levied against the lot or parcel with respect to which it is made.

(c) If the protest is made by at least 15% of the owners of property in the proposed district, to be assessed for more than 50% of the cost of the proposed program or improvements, in accordance with the method or methods of assessment, further proceedings may not be taken by the governing body for at least 12 months.

(d) In determining whether or not sufficient protests have been filed in the proposed special district to prevent further proceedings, property owned by a governmental entity must be considered the same as any other property in the district.

(e) The decision of the governing body is final and conclusive.

(f) The governing body may adjourn the hearing from time to time."

Section 5. Section 7-11-1013, MCA, is amended to read:

"7-11-1013. Order creating district -- power to implement program. (1) The governing body may create a special district and establish assessments or fees if the governing body finds that insufficient protests have been made in accordance with 7-11-1008 or if the eligible registered voters have approved a referendum as provided in 7-11-1011.

(2) To create a special district, the governing body shall issue an order or pass an ordinance or resolution in accordance with the resolution of intention introduced and passed by the governing body or in accordance with the terms of the referendum or petition. This must be done within 30 days of the end of the protest period or approval of the referendum.

(3) If the governing body creates the special district of its own accord as a result of a petition submitted in accordance with 7-11-1003 and without a referendum being held, a copy of the order, ordinance, or resolution creating the district, certified by the clerk of the governing body, must be delivered to the clerk and recorder of the county or counties in which the special district is situated and to the secretary of state, who shall issue a certificate of establishment in accordance with 7-11-1012."

Section 6. Section 7-11-1021, MCA, is amended to read:

"7-11-1021. Governance -- powers and duties. (1) A special district must be administered and operated either by the governing body or by a separate elected or appointed board as determined by the governing body.

(2) (a) If the special district is governed by a separate board, the board must be established in accordance with Title 7, chapter 1, part 2, and specific powers and duties granted to the board and those specifically withheld must be stated.

(b) The governing body may grant additional powers to the board. This includes the authorization to use privately contracted legal counsel or the attorney of the governing body. If privately contracted counsel is used, notice must be provided to the attorney of the governing body.

(3) The entity chosen to administer the special district, as provided in subsection (1), may:

(a) implement a program and order improvements for the special district designed to fulfill the purposes of the special district;

(b) administer the budget of the special district;

(d) purchase, rent, or lease equipment, personal property, and material necessary to develop and implement an effective program;

(e) cooperate or contract with any corporation, association, individual, or group of individuals, including any agency of federal, state, or local government, in order to develop and implement an effective program;

(f) receive gifts, grants, or donations for the purpose of advancing the program and, by gift, deed, devise, or purchase, acquire land, facilities, buildings, and material necessary to implement the purposes of the special district;

(g) construct and, except as provided in subsection (6), maintain facilities and buildings necessary to accomplish the purposes of the special district;

(h) provide grants to private, nonprofit entities as part of implementing an effective program;

(i) adopt a seal and alter it at the entity's pleasure;

(j) administer local ordinances as appropriate;

(k) establish district capital improvement funds pursuant to 7-6-616, maintenance funds, and debt service funds; and

(l) borrow money by the issuance of:

(i) general obligation bonds as authorized by the governing body pursuant to Title 7, chapter 6, part 40, and the appropriate provisions of Title 7, chapter 7, part 22 or 42; or

(ii) except as provided in subsection (6), revenue bonds for the lease, purchase, and maintenance of land, facilities, and buildings and the funding of projects in the manner and subject to the appropriate provisions of Title 7, chapter 7, part 25 or 44.

(4) The Subject to subsection (7), the entity chosen to administer the special district shall submit annual budget and work plans to the governing body for review and approval.

(5) The right to exercise eminent domain pursuant to 70-30-102 is limited to cemetery districts.

(6) (a) Special district funds may not be used to maintain facilities existing prior to creation of the special district.

(b) Money derived from revenue bonds issued under subsection (3)(l)(ii) may not be used for lease payments or maintenance of land, facilities, and buildings existing prior to creation of the special district.

(7) An increase in the special district's budget is subject to the petition or referendum process established in this part for creation of a special district."

Section 7. Section 7-11-1023, MCA, is amended to read:

"7-11-1023. Alteration of special districts. (1) The governing body may change the boundaries of any special district by resolution.

(2) The boundaries may be altered by petition after complying with the requirements for petitions as provided in 7-11-1003.

(3)(1) Alteration of special district boundaries is also subject to procedures for petition, public notice, protest, referendum, certification, reporting, and establishment of assessment as provided in 7-11-1003, 7-11-1006 through 7-11-1008, 7-11-1011 through 7-11-1015, and 7-11-1024.

(4)(2) Changes made to the boundaries may not:

(a) occur more than once each year unless the governing body makes a special finding that an alteration is necessary;

(b) delete any portion of the area if the deletion will create an island of included or excluded lands;

(c) delete any portion of the area that is negatively contributing or may reasonably be expected to negatively contribute to environmental impacts that fall within the scope of the special district's program; and

(d) affect indebtedness existing at the time of the change."

Section 8. Section 7-11-1024, MCA, is amended to read:

"7-11-1024. Financing for special district. (1) The governing body shall make assessments or impose fees for the costs and expenses of the special district based upon a budget proposed by the governing body or separate board administering the district pursuant to 7-11-1021.

(2) For the purposes of this section, "assessable area" means the portion of a lot or parcel of land that is benefited by the special district. The assessable area may be less than but may not exceed the actual area of the lot or parcel.

(3) The governing body shall assess the percentage of the cost of the program or improvements:

(a) against the entire district as follows:

(i) each lot or parcel of land within the special district may be assessed for that part of the cost that its assessable area bears to the assessable area of the entire special district, exclusive of roads, streets, avenues, alleys, and public places;

(ii) if the governing body determines that the benefits derived from the program or improvements by each lot or parcel are substantially equivalent, the cost may be assessed equally to each lot or parcel located within the special district without regard to the assessable area of the lot or parcel;

(iii) each lot or parcel of land, including the improvements on the lot or parcel, may be assessed for that part of the cost of the special district that its taxable valuation bears to the total taxable valuation of the property of the district;

(iv) each lot or parcel of land may be assessed based on the lineal front footage of any part of the lot or parcel that is in the district and abuts the area to be improved or maintained;

(v) each lot or parcel of land within the district may be assessed for that part of the cost that the reasonably estimated vehicle trips generated for a lot or parcel of its size in its zoning classification bear to the reasonably estimated vehicle trips generated for all lots in the district based on their size and zoning classification; or

(vi) any combination of the assessment options provided in subsections (3)(a)(i) through (3)(a)(v) may be used for the special district as a whole; or

(b) based upon the character, kind, and quality of service for a residential or commercial unit, taking into consideration:

(i) the nature of the property or entity assessed;

(ii) a calculated basis for the program or service, including volume or weight;

(iii) the cost, incentives, or penalties applicable to the program or service practices; or

(iv) any combination of these factors.

(4) If property created as a condominium is subject to assessment, each unit within the condominium is considered a separate parcel of real property subject to separate assessment and the lien of the assessment. Each unit must be assessed for the unit's percentage of undivided interest in the common elements of the condominium. The percentage of the undivided ownership interest must be as set forth in the condominium declaration.

(5) Assessments and fees collected for support of the special district must be used for district expenses and may not be used to circumvent the provisions of 15-10-420."

- END -

Latest Version of HB 304 (HB0304.01)
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