Municipalities could remove property through public deannexation procedures

A municipal governing board could propose and approve removing all or part of an area from the municipality. The process would cover property within a municipality's corporate limits. The municipality would prepare a map, a report about financial and service effects, and a service plan before the public hearing. The municipality would publish and mail notice to property owners and registered voters in the proposed area. The board would hold a public hearing before adopting an ordinance. If at least 25% of the area's registered voters petition within 90 days after the ordinance, the municipality would hold a referendum limited to those voters. A majority against deannexation would void the ordinance. The ordinance would take effect on the first June 30 that is at least 90 days after adoption, unless the referendum or court review delays it.

Property owners could ask a municipality to remove an area by submitting a petition signed by every real-property owner in that area. The petition process would apply to areas inside a municipality and would require every real-property owner in the proposed area to sign. The petition would describe the area, current services, road access, outstanding infrastructure debt, and whether the area would be surrounded by the municipality. The city clerk would review the petition and the governing board would hold a public hearing. Owners and residents of the area, along with any municipal resident, could speak at the hearing. If deannexation would transfer service duties to another local government or specified fire, district, commission, or authority, that entity's governing board would have to consent before the petition is filed. If the board does not adopt an ordinance after finding that the petition meets the requirements, it could not start a separate deannexation process for that area for at least 24 months.

After deannexation, the municipality could stop, transfer, or continue services and could recover certain unpaid or undepreciated costs under the stated rules. The rules would cover deannexed property, municipal services, public facilities, roads, public safety responses, municipal taxes, and people with interests in the affected property. Property in the area as of January 1 would not be subject to municipal taxes for the fiscal year beginning July 1 of the year deannexation takes effect, but earlier tax and assessment liens could still be collected or foreclosed. A municipality generally would not be liable for stopping services, subject to contracts, actual service responses, and other stated exceptions. People with a property interest who claim material injury could seek court review for procedural, arbitrary, unauthorized, or constitutional violations. A court could affirm, reverse, void, or send the decision back for further action. The tax rule would apply for the fiscal year beginning July 1 of the year the deannexation becomes effective; required records would generally be filed within 30 days after that effective date.