SENATE BILL No. 429

 

 

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.