Bill Text: MI SB0164 | 2023-2024 | 102nd Legislature | Engrossed
Bill Title: Economic development: other; principal shopping district and business improvement zones; modify. Amends secs. 10, 10b, 10c, 10e & 10f of 1961 PA 120 (MCL 125.990 et seq.).
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Passed) 2023-07-18 - Assigned Pa 0079'23 [SB0164 Detail]
Download: Michigan-2023-SB0164-Engrossed.html
SENATE BILL NO. 164
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, 10b, 10c, 10e, 10f, 10g, 10h, 10j, 10k, and 10l (MCL 125.990, 125.990b, 125.990c, 125.990e, 125.990f, 125.990g, 125.990h, 125.990j, 125.990k, and 125.990l), as amended by 2020 PA 91.
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 211.155. However, assessable property may include real property in a zone area classified as residential real property under section 34c of the general property tax act, 1893 PA 206, MCL 211.34c, only if the plan for the zone area designates property classified as residential real property in the zone area as assessable property as part of its assessment proceeding.
(b) "Assessment" means an assessment imposed under this chapter against assessable property for the benefit of the property owners.
(c) "Assessment revenues" revenue" 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 that 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 (6) of the internal revenue code of 1986, 28 26 USC 501.
(g) "Person" means an individual, partnership, corporation, limited liability company, association, or other legal entity.
(h) "Project" means any activity within a zone area 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 that owns, or an agent authorized in writing by a person who that owns, assessable property according to the records of the treasurer of the city or village in which the business improvement zone is located.
(j) "Proportional voting" means voting with an allocation of votes under section 10f(7) if provided for in a zone plan or a proposed zone plan.
(k) (j) "Qualifying period" means the period in which a business improvement zone is authorized to operate and impose and collect assessments, beginning on the date that the business improvement zone is approved by the property owners voting on the question as provided in section 10f and ending 7 to 10 calendar years after that date as determined in the petition described in section 10c. The 10-year period or qualifying period of a business improvement zone that was created before June 28, 2018 begins on the date that the business improvement zone was approved by the property owners voting on the question as provided in section 10f.
(l) (k) "Zone area" means the area designated in the zone plan as the area to be served by the business improvement zone.
(m) (l) "Zone plan" means a set of goals, strategies, objectives, and guidelines for the operation of a business improvement zone.
Sec. 10b. (1) One or more business improvement zones may be established within a city or village.
(2) The zone plan shall allocate assessments on the basis of the benefit to assessable property. A zone area shall must be contiguous, with the exception of public streets, alleys, parks, and other public rights-of-way.
(3) 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 must 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) A zone plan may provide for assessments. If a zone plan provides for assessments, the zone plan must include a basis for the allocation of assessments in compliance with section 10h on the basis of 1 or more of the following:
(a) Assessed value.
(b) Taxable value.
(c) Square footage.
(d) Street frontage.
(e) Any other factor relating to assessable property identified in the zone plan.
(5) If the zone plan for a zone area provides a basis for the allocation of assessments on the basis of assessed value, the majority of all properties within the zone area, both by assessed value and square footage, must be assessable property.
(6) If the zone plan for a zone area provides a basis for the allocation of assessments on a basis other than assessed value, the majority of all properties within the zone area, both by taxable value and square footage, must be assessable property.
(7) A zone plan may provide for caps on the assessment amounts paid by an owner of assessable property and for caps on the growth of assessment amounts.
Sec. 10c. 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 must include all of the following:
(a) 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 of assessable property within the zone area, or their authorized agents, representing not less than 30% of the property owners of assessable property within the zone area. In determining whether the threshold under this subdivision is met, the number of required signatures must be determined and the signatures of property owners must be allocated, in the same manner as any proportional vote provided in the proposed zone plan under subdivision (d).
(c) 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 must include all of the following:
(i) The proposed initial board of directors for the zone, including no less than 1 owner of residential real property if residential real property is determined assessable property by the local governmental unit under section 10, 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 members of the board.
(iii) A description of projects planned during the qualifying period, including the scope, nature, and duration of the projects.
(iv) An estimate of the total amount of expenditures for projects planned during the qualifying period.
(v) The proposed source or sources of financing for the projects planned during the qualifying period.
(vi) If the proposed financing includes assessments, the projected amount or rate of the assessments for each year and the formula basis to be used in allocating the assessment to be imposed on the basis of the benefit to assessable property.
(vii) A plan of dissolution for the business improvement zone.
(viii) Beginning on the effective date of the amendatory act that added this subparagraph, June 28, 2018, the number of calendar years in the qualifying period, not more than 10 calendar years and not less than 7 calendar years.
(ix) If proportional voting will apply, a description of the proportional voting mechanism to be used or, if proportional voting will not apply, a statement to that effect.
(e) A formula basis for allocating assessments in the zone area that is based on the benefit to assessable property. consistent with section 10b.
Sec. 10e. (1) If a petition is delivered to the clerk of the city or village in accordance with section 10c, the governing body of the city or village shall within 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 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 meeting of the property owners within the proposed zone, which shall must be held not sooner than 7 days or later than 21 days after the date of the rejection by the governing body. The notice shall must be sent by first-class mail to the property owners not less than 7 days prior to before the scheduled date of the meeting and shall must 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). Any notice required as part of the assessment process shall include a statement that a property owner of residential real property within a business improvement zone may seek a homestead deferment for an assessment under this act in the same manner as provided in section 4 of 1976 PA 225, MCL 211.764.10c.
(3) At the meeting, the property owners may amend the zone plan if approved by a majority of the property owners voting at the meeting, using proportional voting if applicable under the zone plan. 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 28 days after the amended zone plan is resubmitted to the clerk. If a zone plan is not rejected within 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.
(4) A governing body of a city or village shall consider the establishment of a business improvement zone and a zone plan for the business improvement zone under this section 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.
(5) Approval of the business improvement zone and zone plan shall serve serves 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.
(6) 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 (3), the clerk of the city or village shall set an election pursuant to section 10f not more than 49 days following the approval.
(7) The clerk of the city or village shall send to the property owners notice by first-class mail of the election not less than 28 days before the election and publish the notice at least once in a newspaper of general circulation in the city or village in which the zone area is located not less than 7 days or more than 21 days prior to before the date scheduled for the election. Any notice required as part of the assessment process shall include a statement that a property owner of residential real property within a business improvement zone may seek a homestead deferment for an assessment under this act in the same manner as provided in section 4 of 1976 PA 225, MCL 211.764.
(8) 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.
(9) The person who that 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 minimize the expenses of the election at a minimum.incurred by the city or village.
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 must 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) A zone plan and the proposal for the establishment of a business improvement zone, including the identity of the initial board, shall be are considered adopted upon the approval of more than 60% of the property owners voting in the election, using proportional voting if applicable under the zone plan.
(3) 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.
(4) 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 qualifying period.
(5) 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.
(6) To the extent not protected by the immunity conferred by 1964 PA 170, MCL 691.1401 to 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.
(7) Subject to subsection (8), if a zone plan provides for proportional voting, the proportional vote of a property owner must be allocated as follows:
(a) If the zone plan for the zone area provides a basis for allocating assessments based upon taxable value, the votes of property owners may be proportionate 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 for that calendar year.
(b) If the zone plan for the zone area provides for allocation of assessments based upon assessed value, the votes of property owners may be proportionate 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 for that calendar year.
(c) 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 may be proportionate to the amount that the assessment for their respective real property for the prior calendar year bears to the total value of assessments for assessable property in the zone area in that calendar year.
(8) The proportional vote allocated to any 1 property owner must not exceed 25% of the total vote. If the proportional vote of a single property owner under this section exceeds 25%, the amount in excess of 25% must be reallocated among the remaining property owners in proportion to the amount that the assessment of their respective assessable property for the prior calendar year bears to the assessment of all assessable property in the zone area owned by the remaining property owners during that calendar year. For purposes of this subsection, property owners that are affiliates shall be treated as a single property owner.
(9) As used in this section, "affiliate" means that term as defined in section 90l of the Michigan strategic fund act, 1984 PA 270, MCL 125.2090l.
Sec. 10g. (1) The day-to-day board shall manage the activities of the business improvement zone and implementation of the zone plan. shall be managed by a board of directors.
(2) The board shall must consist of an odd number of directors and shall must not be smaller than 5 and not larger than 15 in number. The board may include 1 director nominated by the chief executive of the city or village and confirmed by the governing body of the city or village. The board shall include no less than 1 owner of residential real property if residential real property is determined assessable property by the local governmental unit under section 10. A nomination not disapproved by a governing body within 60 days shall stand stands confirmed.
(3) The duties and responsibilities of the board shall must be prescribed in the zone plan and to the extent applicable shall must 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 qualifying 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 is 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 must be in writing and shall must be made available to all property owners of assessable property in the zone area.
(2) An assessment shall may 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 (6), assessments shall be collected by the 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 assessments from each property owner within the zone area and remitted promptly remit the assessments collected to the business improvement zone. Except as otherwise provided in this subsection, assessment Assessment revenue is the property of the business improvement zone and not the city or village in which the business improvement zone is located. However, all payments to the treasurer shall be entirely applied first to the balance of any property taxes owed to the city or village and only then any remaining payment amount shall be considered assessment revenue belonging to the business improvement zone and applied to the assessment levied under this chapter. 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 minimize the expenses of collecting the assessment at a minimum.incurred by the city or village.
(5) The business improvement zone may institute a civil action to collect any delinquent assessment and interest.
(6) An assessment is delinquent if it has not been paid within 90 days after it was due as provided under the zone plan imposed under this chapter. Delinquent assessments shall be collected by Except as otherwise provided in subsection (7), the business improvement zone shall collect delinquent assessments. Delinquent assessments shall accrue interest at a rate of 1.5% per month until paid.
(7) 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 is a lien on the property. The lien amount shall be is for the unpaid portion of the assessment and shall include includes 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. 10j. A zone plan may be amended. Amendments shall be are effective if approved by a majority of the property owners voting on the amendment at the annual meeting of property owners or a special meeting called for that purpose, using proportional voting if applicable under the zone plan. A zone plan amendment changing any assessment is effective only if also approved by the governing body of the city or village in which the business improvement zone is located.
Sec. 10k. (1) Prior to Before the expiration of any qualifying period, the board shall notify the property owners within the business improvement zone of a special meeting by first-class mail at least not less than 14 days prior to before the scheduled date of the meeting to approve a new zone plan for the next qualifying period. Notice under this section shall must include the specific location, scheduled date, and time of the meeting. and shall include a statement that a property owner of residential real property within a business improvement zone may seek a homestead deferment for an assessment under this act in the same manner as provided in section 4 of 1976 PA 225, MCL 211.764.
(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, using proportional voting if applicable under the zone plan, constitutes reauthorization of the business improvement zone for an additional qualifying period, commencing as of the expiration of the qualifying 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 is effective only with the approval of the governing body of the city or village.
Sec. 10l. (1) Upon written petition duly signed by 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 63 days after receipt of the written petition or a special meeting not to be held later than 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 must be made provided to all property owners by first-class mail not less than 14 days prior to before the date of the annual or special meeting. The notice shall must include the specific location and the scheduled date and time of the meeting.
(2) The business improvement zone shall be is dissolved upon a vote of more than 50% of the property owners of assessable property voting at the meeting, using proportional voting if applicable under the zone plan. A dissolution shall does 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 must 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 must 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.
