April 30, 2003, Introduced by Senators PATTERSON, BARCIA, GARCIA, GILBERT, BIRKHOLZ and McMANUS and referred to the Committee on Economic Development, Small Business and Regulatory Reform.
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 cities for
the development or redevelopment projects,"
by amending the title and sections 1, 2, 4, 5, and 6 (MCL
125.981, 125.982, 125.984, 125.985, and 125.986), the title as
amended by 2001 PA 260, sections 1, 2, and 5 as amended by 2001
PA 261, section 4 as amended by 1999 PA 49, and section 6 as
amended by 1992 PA 146.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 TITLE
2 An act to authorize the development or redevelopment of
3 principal shopping districts and business improvement districts;
4 to permit the creation of certain boards; to provide for the
1 operation of principal shopping districts and business
2 improvement districts; to provide for the creation, operation,
3 and dissolution of business improvement zones; and to authorize
4 the collection of revenue
and the bonding of certain cities
5 local governmental units for the development or redevelopment
6 projects.
7 Sec. 1. (1) As used in this chapter:
8 (a) "Assessable property" means real property in a district
9 area other than all of the following:
10 (i) Property classified as residential real property under
11 section 34c of the general property tax act, 1893 PA 206, MCL
12 211.34c.
13 (ii) Property owned by the federal, a state, or a local unit
14 of government where property is exempt from the collection of
15 taxes under the general property tax act, 1893 PA 206, MCL 211.1
16 to 211.157.
17 (iii) One or more classes of property owners whose property
18 meets all of the following conditions:
19 (A) Is exempt from the collection of taxes under the general
20 property tax act, 1893 PA 206, MCL 211.1 to 211.157, other than
21 property identified in subparagraph (ii).
22 (B) As a class has been determined by the legislative body
23 of the city local
governmental unit not to be benefited by a
24 project for which special assessments are to be levied.
25 (b) "Business improvement district" means 1 or more portions
26 of a city local
governmental unit or combination of contiguous
27 portions of 2 or more cities
local governmental units that are
1 predominantly commercial or industrial in use.
2 (c) "District" means a business improvement district or a
3 principal shopping district.
4 (d) "Highways" means public streets, highways, and alleys.
5 (e) "Local governmental unit" means a city or township.
6 (f) (e) "Principal
shopping district" means a portion of a
7 city local governmental unit designated by the
governing body
8 of the city local
governmental unit that is predominantly
9 commercial and that contains at least 10 retail businesses.
10 (2) A city local
governmental unit with a master plan for
11 the physical development
of the city local governmental unit
12 that includes an urban design plan designating a principal
13 shopping district or includes the development or redevelopment of
14 a principal shopping
district, or 1 or more cities local
15 governmental units that establish a business improvement district
16 by resolution, may do 1 or more of the following:
17 (a) Open, widen, extend, realign, pave, maintain, or
18 otherwise improve highways and construct, reconstruct, maintain,
19 or relocate pedestrian walkways.
20 (b) Prohibit or regulate vehicular traffic where necessary to
21 carry out the purposes of the development or redevelopment
22 project.
23 (c) Regulate or prohibit vehicular parking on highways.
24 (d) Acquire, own, maintain, demolish, develop, improve, or
25 operate properties, off-street parking lots, or structures.
26 (e) Contract for the operation or maintenance by others of
27 city off-street parking lots or structures owned by the
local
1 governmental unit, or appoint agents for the operation or
2 maintenance.
3 (f) Construct, maintain, and operate malls with bus stops,
4 information centers, and other buildings that will serve the
5 public interest.
6 (g) Acquire by purchase, gift, or condemnation and own,
7 maintain, or operate real or personal property necessary to
8 implement this section.
9 (h) Promote economic activity in the district by undertakings
10 including, but not limited to, conducting market research and
11 public relations campaigns, developing, coordinating, and
12 conducting retail and institutional promotions, and sponsoring
13 special events and related activities. A business may prohibit
14 the use of its name or logo in a public relations campaign,
15 promotion, or special event or related activity for the
16 district.
17 (i) Provide for or contract with other public or private
18 entities for the administration, maintenance, security,
19 operation, and provision of services that the board determines
20 are a benefit to a
district within the city local governmental
21 unit.
22 (3) A city local
governmental unit that provides for
23 ongoing activities under subsection (2)(h) or (i) shall also
24 provide for the creation of a board for the management of those
25 activities.
26 (4) One member of the board of the principal shopping
27 district shall be from the adjacent residential area, 1 member
1 shall be a representative
of city government the local
2 governmental unit, and a majority of the members shall be
3 nominees of individual businesses located within the principal
4 shopping district. The board shall be appointed by the chief
5 executive officer of the city
local governmental unit with the
6 concurrence of the
legislative body of the city local
7 governmental unit. However, if all of the following requirements
8 are met, a business may appoint a member of the board of a
9 principal shopping district, which member shall be counted toward
10 the majority of members required to be nominees of businesses
11 located within the principal shopping district:
12 (a) The business is located within the principal shopping
13 district.
14 (b) The principal shopping district was designated by the
15 governing body of a city
local governmental unit after July 14,
16 1992.
17 (c) The business is located within a special assessment
18 district established under section 5.
19 (d) The special assessment district is divided into special
20 assessment rate zones reflecting varying levels of special
21 benefits.
22 (e) The business is located in the special assessment rate
23 zone with the highest special assessment rates.
24 (f) The square footage of the business is greater than 5.0%
25 of the total square footage of all businesses in that special
26 assessment rate zone.
27 (5) If the boundaries of the principal shopping district are
1 the same as those of a downtown district designated under 1975 PA
2 197, MCL 125.1651 to 125.1681, the governing body may provide
3 that the members of the board of the downtown development
4 authority, which manages the downtown district, shall compose the
5 board of the principal shopping district, in which case
6 subsection (4) does not apply.
7 (6) The members of the board of a business improvement
8 district shall be
determined by the city local governmental
9 unit as provided in this subsection. The board of a business
10 improvement district shall consist of all of the following:
11 (a) One
representative of the city local governmental unit
12 appointed by the chief
executive officer of the city local
13 governmental unit with the concurrence of the legislative body of
14 the city local
governmental unit in which the business
15 improvement district is located. If the business improvement
16 district is located in
more than 1 city local governmental
17 unit, then 1
representative from each city local governmental
18 unit in which the business improvement district is located shall
19 serve on the board as provided in this subdivision.
20 (b) Other members of the board shall be nominees of the
21 businesses and property owners located within the business
22 improvement district. If a class of business or property owners,
23 as identified in the resolution described in subsection (8), is
24 projected to pay more than 50% of the special assessment levied
25 that benefits property in a business improvement district for the
26 benefit of the business improvement district, the majority of the
27 members of the board of the business improvement district shall
1 be nominees of the business or property owners in that class.
2 (7) A city local
governmental unit may create 1 or more
3 business improvement districts.
4 (8) If 1 or more cities
local governmental units establish
5 a business improvement district by resolution under subsection
6 (2), the resolution shall identify all of the following:
7 (a) The geographic boundaries of the business improvement
8 district.
9 (b) The number of board members in that business improvement
10 district.
11 (c) The different classes of property owners in the business
12 improvement district.
13 (d) The class of business or property owners, if any, who are
14 projected to pay more than 50% of the special assessment levied
15 that benefits property in that business improvement district.
16 Sec. 2. (1) The cost of the whole or any part of a principal
17 shopping district project or business improvement district
18 project as authorized in this chapter may be financed by 1 or
19 more of the following methods:
20 (a) Grants and gifts
to the city local governmental unit or
21 district.
22 (b) City Local
governmental unit funds.
23 (c) The issuance of
general obligation bonds of the city
24 local governmental unit subject to the revised municipal finance
25 act, 2001 PA 34, MCL 141.2101 to 141.2821.
26 (d) The issuance of
revenue bonds by the city local
27 governmental unit under the revenue bond act of 1933, 1933 PA 94,
1 MCL 141.101 to 141.140, or under any other applicable revenue
2 bond act. The issuance of the bonds shall be limited to the part
3 or parts of the district project that are public improvements.
4 (e) The levying of special assessments against land or
5 interests in land, or both.
6 (f) Any other source.
7 (2) Beginning January 1, 2000, the proceeds of a bond, note,
8 or other obligation issued to finance a project authorized under
9 this chapter shall be used for capital expenditures, costs of a
10 reserve fund securing the bonds, notes, or other obligations, and
11 costs of issuing the bonds, notes, or other obligations. The
12 proceeds of the bonds, notes, or other obligations shall not be
13 used for operational expenses of a district.
14 Sec. 4. The development or redevelopment of a district,
15 including the various phases of the development or redevelopment,
16 is 1 project and, in the discretion of the governing body of the
17 city local governmental unit, may be financed as a
single
18 improvement.
19 Sec. 5. (1) If a city
local governmental unit elects to
20 levy special assessments to defray all or part of the cost of the
21 district project, then the special assessments shall be levied
22 pursuant to applicable statutory or charter provisions or, if
23 there are no applicable statutory or charter provisions, pursuant
24 to statutory or charter
provisions applicable to city local
25 governmental unit street
improvements. If a city local
26 governmental unit charter does not authorize special assessments
27 for the purposes set forth in this chapter, the charter
1 provisions authorizing special assessments for street
2 improvements are made applicable to the purposes set forth in
3 this chapter, without amendment to the charter. The total amount
4 assessed for district purposes may be made payable in not more
5 than 20 annual installments as determined by the governing body
6 of the city local
governmental unit, the first installment to
7 be payable in not more than 18 months after the date of the
8 confirmation of the special assessment roll.
9 (2) A special assessment shall be levied against assessable
10 property on the basis of the special benefits to that parcel from
11 the total project. There is a rebuttable presumption that a
12 district project specially benefits all assessable property
13 located within the district.
14 (3) This subsection applies to a principal shopping district
15 only if the principal shopping district is designated by the
16 governing body of a city
local governmental unit after July 14,
17 1992. The special assessments annually levied on a parcel under
18 this chapter shall not exceed the product of $10,000.00 and the
19 number of businesses on that parcel. A business located on a
20 single parcel shall not be responsible for a special assessment
21 in excess of $10,000.00 annually. When the special assessment
22 district is created, a lessor of a parcel subject to a special
23 assessment may unilaterally revise an existing lease to a
24 business located on that parcel to recover from that business all
25 or part of the special assessment, as is proportionate
26 considering the portion of the parcel occupied by the business.
27 (4) The $10,000.00 maximum amounts in subsection (3) shall be
1 adjusted each January 1, beginning January 1, 1994, pursuant to
2 the annual average percentage increase or decrease in the Detroit
3 consumer price index for all items as reported by the United
4 States department of labor. The adjustment for each year shall
5 be made by comparing the Detroit consumer price index for the
6 12-month period ending the preceding October 31 with the
7 corresponding Detroit consumer price index of 1 year earlier.
8 The percentage increase or decrease shall then be multiplied by
9 the current amounts under subsection (3) authorized by this
10 section. The product shall be rounded up to the nearest multiple
11 of 50 cents and shall be the new amount.
12 (5) The city local
governmental unit may issue special
13 assessment bonds in anticipation of the collection of the special
14 assessments for a district project and, by action of its
15 governing body, may pledge its full faith and credit for the
16 prompt payment of the bonds. Special assessment bonds issued
17 under this section are subject to the revised municipal finance
18 act, 2001 PA 34, MCL 141.2101 to 141.2821. The last maturity on
19 the bonds shall be not later than 2 years after the due date of
20 the last installment on the special assessments. Special
21 assessment bonds may be issued pursuant to statutory or charter
22 provisions applicable to
the issuance by the city local
23 governmental unit of special assessment bonds for the improvement
24 or, if there are no applicable statutory or charter provisions,
25 pursuant to statutory or charter provisions applicable to the
26 issuance by the city local
governmental unit of special
27 assessment bonds for street improvements.
1 (6) If a district project in a district designated by the
2 governing body of a city
local governmental unit after July 14,
3 1992 is financed by special assessments, the governing body of
4 the city local
governmental unit shall review the special
5 assessments every 5 years, unless special assessment bonds are
6 outstanding.
7 (7) Before a city
local governmental unit levies a special
8 assessment under this chapter that benefits property within a
9 business improvement district, the business improvement district
10 board shall develop a marketing and development plan that details
11 all of the following:
12 (a) The scope, nature, and duration of the business
13 improvement district project or projects.
14 (b) The different classes of property owners who are going to
15 be assessed and the projected amount of the special assessment on
16 the different classes.
17 (8) A city local
governmental unit that levies a special
18 assessment under this chapter that benefits property within a
19 business improvement district is considered to have approved the
20 marketing and development plan described in subsection (7).
21 Sec. 6. If off-street parking lots or structures are
22 essential to the principal shopping district project, if 1 or
23 more off-street parking lots or structures are already owned by
24 the city local
governmental unit and were acquired through the
25 issuance of revenue bonds, and if the remaining parking lots or
26 structures are to be financed in whole or in part by special
27 assessments and special
assessment bonds, then the city local
1 governmental unit, to place all parking lots or structures on the
2 same basis, may include as a part of the cost of parking lots or
3 structures for the project the amount necessary to retire all or
4 any part of the outstanding revenue bonds, inclusive of any
5 premium not exceeding 5% necessary to be paid upon the redemption
6 or purchase of those outstanding bonds. From the proceeds of the
7 special assessments or from the sale of bonds issued in
8 anticipation of the payment of the special assessments, the
9 city local governmental unit shall retire by
redemption or
10 purchase the outstanding revenue bonds. This section does not
11 authorize the refunding of noncallable bonds without the consent
12 of the holders of the bonds.