Bill Text: MI SB0257 | 2013-2014 | 97th Legislature | Engrossed
Bill Title: Economic development; other; business improvement districts; modify. Amends secs. 10, 10a, 10b, 10c, 10e, 10f, 10g, 10h, 10i, 10k & 10l of 1961 PA 120 (MCL 125.990 et seq.); adds sec. 10n & repeals sec. 10d of 1961 PA 120 (MCL 125.990d).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2014-12-31 - Presented To Governor 1/2/2015 @ 11:06 Am 2014 Addenda [SB0257 Detail]
Download: Michigan-2013-SB0257-Engrossed.html
SB-0257, As Passed House, September 12, 2013
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 257
A bill to amend 1961 PA 120, entitled
"An act to authorize the development or redevelopment of principal
shopping districts and business improvement districts; to permit
the creation of certain boards; to provide for the operation of
principal shopping districts and business improvement districts; to
provide for the creation, operation, and dissolution of business
improvement zones; and to authorize the collection of revenue and
the bonding of certain local governmental units for the development
or redevelopment projects,"
by amending sections 10, 10a, 10b, 10c, 10e, 10f, 10g, 10h, 10i,
10k, and 10l (MCL 125.990, 125.990a, 125.990b, 125.990c, 125.990e,
125.990f, 125.990g, 125.990h, 125.990i, 125.990k, and 125.990l), as
added by 2001 PA 260, and by adding section 10n; and to repeal acts
and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 10. As used in this chapter:
(a) "Assessable property" means real property in a zone area
other than property classified as residential real property under
section 34c of the general property tax act, 1893 PA 206, MCL
211.34c, or real property exempt from the collection of taxes under
the
general property tax act, 1893 PA 206, MCL 211.1 to 211.157.
211.155.
(b) "Assessment" means an assessment imposed under this
chapter against assessable property for the benefit of the property
owners.
(c) "Assessment revenues" means the money collected by a
business improvement zone from any assessments, including any
interest on the assessments.
(d) "Board" means the board of directors of a business
improvement zone.
(e) "Business improvement zone" means a business improvement
zone created under this chapter.
(f) "Nonprofit corporation" means a nonprofit corporation
organized under the nonprofit corporation act, 1982 PA 162, MCL
450.2101 to 450.3192, and which complies with all of the following:
(i) The articles of incorporation of the nonprofit corporation
provide that the nonprofit corporation may promote a business
improvement zone and may also provide management services related
to the implementation of a zone plan.
(ii) The nonprofit corporation is exempt from federal income
tax under section 501(c)(4) or 501(c)(6) of the internal revenue
code, of
1986.28 USC 501.
(g) "Person" means an individual, partnership, corporation,
limited liability company, association, or other legal entity.
(h) "Project" means any activity for the benefit of property
owners authorized by section 10a to enhance the business
environment within a zone area.
(i) "Property owner" means a person who owns, or an agent
authorized in writing by a person who owns, assessable property
according to the records of the treasurer of the city or village in
which the business improvement zone is located.
(j)
"7-year "10-year
period" means the period in which
a
business improvement zone is authorized to operate, beginning on
the date that the business improvement zone is created or renewed
and
ending 7 10 calendar years after that date.
(k) "Zone area" means the area designated in the zone plan as
the area to be served by the business improvement zone.
(l) "Zone plan" means a set of goals, strategies, objectives,
and guidelines for the operation of a business improvement zone, as
approved at a meeting of property owners conducted under section
10d.
Sec. 10a. (1) A business improvement zone is a public body
corporate and may do 1 or more of the following for the benefit of
property owners located in the business improvement zone:
(a) Acquire, through purchase, lease, or gift, construct,
develop, improve, maintain, operate, or reconstruct park areas,
planting areas, and related facilities within the zone area.
(b) Acquire, construct, clean, improve, maintain, reconstruct,
or relocate sidewalks, street curbing, street medians, fountains,
and lighting within the zone area.
(c) Develop and propose lighting standards within the zone
area.
(d) Acquire, plant, and maintain trees, shrubs, flowers, or
other vegetation within the zone area.
(e) Provide or contract for security services with other
public or private entities and purchase equipment or technology
related to security services within the zone area.
(f) Promote and sponsor cultural or recreational activities.
(g) Engage in economic development activities, including, but
not limited to, promotion of business, retail, or industrial
development, developer recruitment, business recruitment, business
marketing, business retention, public relations efforts, and market
research.
(h)
Engage in other activity activities
with the purpose to
enhance the economic prosperity, enjoyment, appearance, image, and
safety of the zone area.
(i) Acquire by purchase or gift, maintain, or operate real or
personal property necessary to implement this chapter.
(j) Solicit and accept gifts or grants to further the zone
plan.
(k) Sue or be sued.
(l) Do all other acts and things necessary or convenient to
exercise the powers, duties, and jurisdictions of the business
improvement zone under this act or other laws that relate to the
purposes, powers, duties, and jurisdictions of the business
improvement zone.
(2) A business improvement zone may contract with a nonprofit
corporation or any other public or private entity and may pay a
reasonable fee to the nonprofit corporation or other public or
private entity for services provided. Two or more business
improvement zones may contract with the same nonprofit corporation
or public or private entity under this subsection.
(3) A business improvement zone has the authority to borrow
money in anticipation of the receipt of assessments if all of the
following conditions are satisfied:
(a) The loan will not be requested or authorized, or will not
mature,
within 90 days before the expiration of the 7-year 10-year
period.
(b) The amount of the loan does not exceed 50% of the annual
average assessment revenue of the business improvement zone during
the previous year or, in the case of a business improvement zone
that has been in existence for less than 1 year, the loan does not
exceed 25% of the projected annual assessment revenue.
(c)
The loan repayment period does not extend beyond the 7-
year
10-year period.
(d) The loan is subject to the revised municipal finance act,
2001 PA 34, MCL 141.2101 to 141.2821.
(4) The services provided by and projects of a business
improvement zone are services and projects of the business
improvement zone and are not services, functions, or projects of
the municipality in which the business improvement zone is located.
The services provided by and projects of a business improvement
zone are supplemental to the services, projects, and functions of
the city or village in which the business improvement zone is
located.
(5) The business improvement zone has no other authority than
the authority described in this act or authorized by other laws of
this state.
Sec.
10b. (1) Except as provided in subsection (4), 1 ONE
or
more business improvement zones may be established within a city or
village.
(2)
The If the zone plan for
the area provides a basis for
allocating assessments other than assessed value, the majority of
all parcels included in a zone area, both by area and by taxable
value, shall be assessable property. If the zone plan for the zone
area provides for allocation of assessments based upon assessed
value, the majority of all parcels included in a zone area, both by
area and assessed value, shall be assessable property. A zone area
shall be contiguous, with the exception of public streets, alleys,
parks, and other public rights-of-way.
(3)
Except as provided in subsection (4), a A
business
improvement zone may be established in a city or village even if
the city or village has established a principal shopping district
or business improvement district under chapter 1. Assessable
property shall not be included in any of the following:
(a) More than 1 business improvement zone established under
this chapter.
(b) Both a principal shopping district and a business
improvement district established under chapter 1.
(4)
If at the time of the effective date of the amendatory act
that
added this subsection a business improvement district
established
under chapter 1 is located in a city or village, a
business
improvement zone may not be established under this chapter
within
that city or village unless within 180 days of the effective
date
of the amendatory act that added this subsection or during
July
2005 or during July every third year after 2005 the governing
body
of the city or village adopts a resolution authorizing the
governing
body to consider, as provided in section 10e, the
establishment
of a business improvement zone under this chapter.
Sec.
10c. (1) A person may initiate the establishment of a
business improvement zone by the delivery of a petition to the
clerk of the city or village in which a proposed zone area is
located. The petition shall include all of the following:
(a)
The An attached map and
description of the geographic
boundaries of the zone area sufficient to identify each assessable
property included.
(b) The signatures of property owners of parcels representing
not less than 30% of the property owners within the zone area,
weighted as provided in section 10f(2).
(c)
A An attached listing, by tax parcel identification
number, of all parcels within the zone area, separately identifying
assessable property.
(d) An attached zone plan, which shall include all of the
following:
(i) The proposed initial board of directors for the zone,
except for a member of the board of directors who may be appointed
by the city or village under section 10g(2).
(ii) The method for removal, appointment, and replacement of
the board.
(iii) A description of projects planned during the 10-year
period, including the scope, nature, and duration of the projects.
(iv) An estimate of the total amount of expenditures for
projects planned during the 10-year period.
(v) The proposed source or sources of financing for the
projects.
(vi) If the proposed financing includes assessments, the
projected amount or rate of the assessments for each year and the
basis upon which the assessments are to be imposed on assessable
property.
(vii) A plan of dissolution for the business improvement zone.
(e) A basis for allocating assessments in the zone area,
including, but not limited to, assessments based upon taxable value
or assessments based upon assessed value.
(2)
After a petition is filed pursuant to subsection (1), the
clerk
shall notify all property owners within the zone area of a
public
meeting of the property owners regarding the establishment
of
the business improvement zone to be held not less than 45 days
or
more than 60 days after the filing of the petition. The notice
shall
be sent by first-class mail to the property owners not less
than
14 days prior to the scheduled date of the meeting. The notice
shall
include the specific location and the scheduled date and time
of
the meeting.
Sec.
10e. (1) If a zone plan petition
is adopted and presented
delivered to the clerk of the city or village in accordance with
section
10d, 10c, the governing body of the city or village shall
within
45 28 days schedule a public hearing of the governing body
to review the zone plan and any proposed assessment and to receive
public comment. The clerk shall notify all owners of parcels within
the zone area of the public hearing by first-class mail.
(2) At the public hearing required under subsection (1), or at
the next regularly scheduled meeting of the governing body of the
city or village, the governing body shall approve or reject the
establishment
of the business improvement zone and the zone plan as
adopted
by the property owners under section 10d(3). attached to
the petition under section 10c. If the governing body rejects the
establishment of the business improvement zone and the zone plan,
the clerk shall notify all property owners within the proposed zone
of
a reconvened meeting of the property owners within the proposed
zone,
which shall be held not sooner than 10
7 days or later than
21 days after the date of the rejection by the governing body. The
notice shall be sent by first-class mail to the property owners not
less than 7 days prior to the scheduled date of the meeting and
shall include the specific location and the scheduled date and time
of the meeting, as determined by the person initiating the
establishment of the business improvement zone under section
10c(1).
At the reconvened meeting, the property owners may amend
the
zone plan if approved by a majority of the property owners as
provided
in section 10d(3). voting at
the meeting. The votes of the
property owners at the meeting shall be weighted in the manner
indicated in section 10f(2). The amended zone plan may be
resubmitted to the clerk of the city or village without the
requirement of a new petition under section 10c for approval or
rejection at a meeting of the governing body of the city or village
not
later than 60 28 days after the amended zone plan is
resubmitted
to the clerk. If a zone plan is not rejected within 60
56 days of the date the amended zone plan is resubmitted to the
clerk, the amended zone plan is considered approved by the
governing body of the city or village. If the amended zone plan is
rejected by the governing body, then the amended zone plan may not
be resubmitted without the delivery of a new petition under section
10c.
(3) A governing body of a city of village shall consider the
establishment of a business improvement zone and a zone plan for
the business improvement zone under subsection (2) if all of the
following apply:
(a) The zone plan complies with the requirements of section
10c.
(b) The zone plan for the business improvement zone provides
that the services to be provided by the business improvement zone
and the projects under the zone plan would be supplemental to the
services, projects, and functions of the city or village.
(c) The zone plan provides a basis for allocating assessments
that complies with this chapter.
(4) (3)
Approval of the business
improvement zone and zone
plan shall serve as a determination by the city or village that any
assessment set forth in the zone plan, including the basis for
allocating the assessment, is appropriate, subject only to the
approval of the business improvement zone and the zone plan by the
property owners in accordance with section 10f.
(5) (4)
If the governing body of the city
or village approves
the business improvement zone and zone plan or if the amended zone
plan is considered approved under subsection (2), the clerk of the
city or village shall set an election pursuant to section 10f not
more
than 60 49 days following the approval.
(6) (5)
The clerk of the city or village
shall send to the
property owners notice by first-class mail of the election not less
than
30 28 days before the election and publish the notice at
least
twice
once in a newspaper of general circulation in the city or
village
in which the zone area is located
. The first publication
shall
not be less than 10 7 days
or more than 30 21 days prior to
the
date scheduled for the election. The second publication shall
not
be published less than 1 week after the first publication.
(7) (6)
The election described in this
section and section 10f
is not an election subject to the Michigan election law, 1954 PA
116, MCL 168.1 to 168.992.
(8) (7)
The person who filed the petition
under section 10c,
the proposed board members, and the property owners may, at the
option and under the direction of the clerk, assist the clerk of
the city or village in conducting the election to keep the expenses
of the election at a minimum.
Sec. 10f. (1) All property owners as of the date of the
delivery of the petition as provided in section 10c are eligible to
participate in the election. The election shall be conducted by
mail. The question to be voted on by the property owners is the
adoption of the zone plan and the establishment of the business
improvement zone, including the identity of the initial board.
(2)
Votes If the zone plan for
the zone area provides a basis
for allocating assessments based upon taxable value, the votes of
property owners shall be weighted in proportion to the amount that
the taxable value of their respective real property for the
preceding calendar year bears to the taxable value of all
assessable
property in the zone area. , but in If the zone plan for
the zone area provides for allocation of assessments based upon
assessed value, the votes of property owners shall be weighted in
proportion to the amount that the assessed value of their
respective real property for the preceding calendar year bears to
the assessed value of all assessable property in the zone area. If
the zone plan for the zone area provides a basis for allocating
assessments other than taxable value or assessed value, the votes
of property owners shall be weighed in proportion to the amount
that the weighted value for their respective real property bears to
the total weighted value of all assessable property in the zone
area. In no case shall the total number of votes assigned to any 1
property owner be equal to more than 25% of the total number of
votes eligible to be cast in the election.
(3) A zone plan and the proposal for the establishment of a
business improvement zone, including the identity of the initial
board, shall be considered adopted upon the approval of more than
60% of the property owners voting in the election, with votes
weighted as provided in subsection (2).
(4) Upon acceptance or rejection of a business improvement
zone and zone plan by the property owners, the resulting business
improvement zone or the person filing the petition under section
10c shall, at the request of the city or village, reimburse the
city or village for all or a portion of the reasonable expenses
incurred to comply with this chapter. The governing body of the
city or village may forgive and choose not to collect all or a
portion of the reasonable expenses incurred to comply with this
chapter.
(5) Adoption of a business improvement zone and zone plan
under this section authorizes the creation of the business
improvement
zone and the implementation of the zone plan for the 7-
year
10-year period.
(6) Adoption of a business improvement zone and zone plan
under this section and the creation of the business improvement
zone does not relieve the business improvement zone from following,
or does not waive any rights of the city or village to enforce, any
applicable laws, statutes, or ordinances. A business improvement
zone created under this chapter shall comply with all applicable
state and federal laws.
(7) To the extent not protected by the immunity conferred by
1964
PA 170, MCL 691.1401 to 691.1415, 691.1419, a city or village
that approves a business improvement zone within its boundaries is
immune from civil or administrative liability arising from any
actions of that business improvement zone.
Sec. 10g. (1) The day-to-day activities of the business
improvement zone and implementation of the zone plan shall be
managed by a board of directors.
(2) The board shall consist of an odd number of directors and
shall not be smaller than 5 and not larger than 15 in number. The
board may include 1 director nominated by the chief executive of
Senate Bill No. 257 (H-1) as amended September 12, 2013
the
city or village and approved confirmed
by the governing body of
the city or village. A nomination not disapproved by a governing
body within 60 days shall stand confirmed.
(3) The duties and responsibilities of the board shall be
prescribed in the zone plan and to the extent applicable shall
include all of the following duties and responsibilities:
(a) Developing administrative procedures relating to the
implementation of the zone plan.
(b) Recommending amendments to the zone plan.
(c) Scheduling and conducting an annual meeting of the
property owners.
(d)
Developing a zone plan for the next 7-year 10-year period.
(4) Members of the board shall serve without compensation.
However, members of the board may be reimbursed for their actual
and necessary expenses incurred in the performance of their
official duties as members of the board.
Sec. 10h. (1) A business improvement zone may be funded in
whole or in part by 1 or more assessments on assessable property,
as provided in the zone plan. An assessment under this chapter
shall be in addition to any taxes or special assessments otherwise
imposed on assessable property. The business improvement zone, with
the approval of the board, may enter into agreements with 1 or more
property owners in the city or village providing for the provision
of business zone activities or services to the property owner or
owners by the business improvement zone in exchange for monetary
contributions to the business improvement zone from the property
owner or owners. [An agreement providing for the provision of business
zone activities or services described in this subsection shall be in writing and shall be made available to all property owners of assessable property in the zone area.]
(2) An assessment shall be imposed against assessable property
only on the basis of the benefits to assessable property afforded
by the zone plan. There is a rebuttable presumption that a zone
plan and any project specially benefits all assessable property in
a zone area.
(3) If a zone plan provides for an assessment, the treasurer
of the city or village in which the zone area is located as an
agent of the business improvement zone shall collect the assessment
imposed by the board under the zone plan on all assessable property
within the zone area in the amount authorized by the zone plan.
(4)
Except as provided in subsection (7) (6), assessments
shall be collected by the treasurer of the city or village as an
agent of the business improvement zone from each property owner and
remitted promptly to the business improvement zone. Assessment
revenue is the property of the business improvement zone and not
the city or village in which the business improvement zone is
located. The business improvement zone may, at the option and under
the direction of the treasurer, assist the treasurer of the city or
village in collecting the assessment to keep the expenses of
collecting the assessment at a minimum.
(5) The business improvement zone may institute a civil action
to collect any delinquent assessment and interest.
(6)
An assessment imposed under this act is not a special
assessment
collected under the general property tax act, 1893 PA
206,
MCL 211.1 to 211.157.
(6) (7)
An assessment is delinquent if it
has not been paid
within 90 days after it was due as provided under the zone plan
Senate Bill No. 257 (H-1) as amended September 12, 2013
imposed under this chapter. Delinquent assessments shall be
collected by the business improvement zone. Delinquent assessments
shall accrue interest at a rate of 1.5% per month until paid.
(7) (8)
If any portion of the assessment
has not been paid
within 90 days after it was due, that portion of the unpaid
assessment shall constitute a lien on the property. The lien amount
shall
be for the unpaid portion of the assessment and shall not
include any applicable interest. Alternatively, a delinquent and
unpaid assessment may, at the request of the business improvement
zone, be returned as delinquent by the treasurer of the city or
village and collected in the same manner as a delinquent tax
special assessment along with any associated interest, fees, and
costs under the general property tax act, 1893 PA 206, MCL 211.1 to
211.155. However, property is not subject to forfeiture,
foreclosure, and sale under sections 78 to 79a of the general
property tax act, 1893 PA 206, MCL 211.78 to 211.79a, for
nonpayment of an assessment under this chapter unless the property
also is subject to forfeiture, foreclosure, and sale under sections
78 to 79a of the general property tax act, 1893 PA 206, MCL 211.78
to 211.79a, for delinquent property taxes. [If a parcel of assessable
property that has a delinquent and unpaid assessment is sold to a purchaser who is not related or affiliated to the seller, as determined by the board, the board may reduce or eliminate any delinquent and unpaid assessment on that parcel of assessable property if the property is not subject to forfeiture, foreclosure, and sale under sections 78 to 79a of the general property tax act, 1893 PA 206, MCL 211.78 to 211.79a. If the delinquent property taxes are paid, the property may not be forfeited, foreclosed, and sold for an unpaid assessment under this chapter.]
Sec. 10i. (1) Expenses incurred in implementing any project or
service of a business improvement zone shall be financed in
accordance with the zone plan.
(2) Assessment revenues under section 10h are the funds of the
business improvement zone and not funds of the state or of the city
or village in which the business improvement zone is located. All
money collected under section 10h shall be deposited in a financial
institution in the name of the business improvement zone.
Assessment revenues may be deposited in an interest generating
account. The business improvement zone shall use the funds only to
implement the zone plan.
(3) All expenditures by a business improvement zone shall be
audited annually by a certified public accountant. The audit shall
be completed within 9 months of the close of the fiscal year of the
business improvement zone. Within 30 days after completion of an
audit, the certified public accountant shall transmit a copy of the
audit to the board and make copies of the audit available to the
property owners and the public.
(4) If an annual audit required by this section contains
material
exceptions, and the material exceptions are not
substantially
corrected the board of the
business improvement zone
shall
within 90 days of the delivery of the
audit , the business
improvement
zone shall be dissolved in accordance with the zone
plan
upon approval of the dissolution by the governing body of the
city
or village in which the business improvement zone is
located.adopt a plan to remedy the exceptions and
forward a copy of
that plan to the city or village in which the business improvement
zone is located.
(5) The board shall publish an annual activity and financial
report. The report shall be available to the public. Each year,
every property owner shall be notified of the availability of the
annual activity and financial report.
(6) As used in this section, "financial institution" means a
state or nationally chartered bank or a state or federally
chartered savings and loan association, savings bank, or credit
union whose deposits are insured by an agency of the United States
government and that maintains a principal office or branch office
located in this state under the laws of this state or of the United
States.
Sec.
10k. (1) Prior to the expiration of any 7-year 10-year
period, the board shall notify the property owners within the
business improvement zone of a special meeting by first-class mail
at least 14 days prior to the scheduled date of the meeting to
approve
a new zone plan for the next 7-year 10-year period. Notice
under this section shall include the specific location, scheduled
date, and time of the meeting.
(2) Approval of the new zone plan at the special meeting by
more than 60% of the property owners of assessable property voting
at that meeting, with the vote of the property owners being
weighted in accordance with section 10f(2), constitutes
reauthorization of the business improvement zone for an additional
7-year
10-year period, commencing as of the expiration of the 7-
year
10-year period then in effect. If the new zone plan reflects
any new assessment, or reflects an extension of any assessment
beyond the period previously approved by the city or village in
which the business improvement zone is located, the new or extended
assessment shall be effective only with the approval of the
governing body of the city or village.
Sec.
10l. (1) Upon written petition duly signed by 20% 30% of
the property owners of assessable property within a zone area and
submitted no sooner than 2 years following the adoption of the
business improvement zone and zone plan, the board shall place on
the agenda of the next annual meeting, if the next annual meeting
is
to be held not later than 60 63
days after receipt of the
written
petition or a special meeting not to be held later than 60
63 days after receipt of the written petition, the issue of
dissolution of the business improvement zone. Notice of the next
annual meeting or special meeting described in this subsection
shall be made to all property owners by first-class mail not less
than 14 days prior to the date of the annual or special meeting.
The notice shall include the specific location and the scheduled
date and time of the meeting.
(2) The business improvement zone shall be dissolved upon a
vote of more than 50% of the property owners of assessable property
voting at the meeting, with the votes of the property owners
weighted in accordance with section 10f(2). A dissolution shall not
take effect until the later of the end of the second calendar year
after the vote for dissolution or all contractual liabilities of
the business improvement zone have been paid and discharged.
(3) Upon dissolution of a business improvement zone, the board
shall dispose of the remaining physical assets of the business
improvement zone. The proceeds of any physical assets disposed of
by the business improvement zone and all money collected through
assessments that is not required to defray the expenses of the
business improvement zone shall be refunded on a pro rata basis to
persons from whom assessments were collected. If the board finds
that the refundable amount is so small as to make impracticable the
computation and refunding of the money, it may be transferred to
the treasurer of the city or village in which the business
improvement zone is located for deposit in the treasury of the city
or village to the credit of the general fund.
(4) Upon dissolution of a business improvement zone, any
remaining assets of the business improvement zone shall be
transferred to the treasurer of the city or village in which the
business improvement zone is located for deposit in the treasury of
the city or village to the credit of the general fund.
Sec. 10n. (1) Two or more business improvement zones within
the same city or village may merge into a single business
improvement zone if the board of each business improvement zone
approves a merger agreement among the merging zones and the merger
agreement also is approved by the governing body of the city or
village in which the zones are located.
(2) The merger agreement shall include, without limitation, a
manner of selecting the board of directors of the merged business
improvement zone, a zone plan for the merged business improvement
zone, and a plan for establishing and collecting assessments under
the merged business improvement zone.
Enacting section 1. Section 10d of 1961 PA 120, MCL 125.990d,
is repealed.
