SB-0257, As Passed Senate, September 18, 2013

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 257

     A bill to amend 1961 PA 120, entitled

"An act to authorize the development or redevelopment of principal

shopping districts and business improvement districts; to permit

the creation of certain boards; to provide for the operation of

principal shopping districts and business improvement districts; to

provide for the creation, operation, and dissolution of business

improvement zones; and to authorize the collection of revenue and

the bonding of certain local governmental units for the development

or redevelopment projects,"

by amending sections 10, 10a, 10b, 10c, 10e, 10f, 10g, 10h, 10i,

10k, and 10l (MCL 125.990, 125.990a, 125.990b, 125.990c, 125.990e,

125.990f, 125.990g, 125.990h, 125.990i, 125.990k, and 125.990l), as

added by 2001 PA 260, and by adding section 10n; and to repeal acts

and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 10. As used in this chapter:

     (a) "Assessable property" means real property in a zone area

other than property classified as residential real property under

section 34c of the general property tax act, 1893 PA 206, MCL

211.34c, or real property exempt from the collection of taxes under

the general property tax act, 1893 PA 206, MCL 211.1 to 211.157.

211.155.

     (b) "Assessment" means an assessment imposed under this

chapter against assessable property for the benefit of the property

owners.

     (c) "Assessment revenues" means the money collected by a

business improvement zone from any assessments, including any

interest on the assessments.

     (d) "Board" means the board of directors of a business

improvement zone.

     (e) "Business improvement zone" means a business improvement

zone created under this chapter.

     (f) "Nonprofit corporation" means a nonprofit corporation

organized under the nonprofit corporation act, 1982 PA 162, MCL

450.2101 to 450.3192, and which complies with all of the following:

     (i) The articles of incorporation of the nonprofit corporation

provide that the nonprofit corporation may promote a business

improvement zone and may also provide management services related

to the implementation of a zone plan.

     (ii) The nonprofit corporation is exempt from federal income

tax under section 501(c)(4) or 501(c)(6) of the internal revenue

code, of 1986.28 USC 501.

     (g) "Person" means an individual, partnership, corporation,

limited liability company, association, or other legal entity.

     (h) "Project" means any activity for the benefit of property

owners authorized by section 10a to enhance the business

environment within a zone area.

     (i) "Property owner" means a person who owns, or an agent

authorized in writing by a person who owns, assessable property

according to the records of the treasurer of the city or village in

which the business improvement zone is located.

     (j) "7-year "10-year period" means the period in which a

business improvement zone is authorized to operate, beginning on

the date that the business improvement zone is created or renewed

and ending 7 10 calendar years after that date.

     (k) "Zone area" means the area designated in the zone plan as

the area to be served by the business improvement zone.

     (l) "Zone plan" means a set of goals, strategies, objectives,

and guidelines for the operation of a business improvement zone, as

approved at a meeting of property owners conducted under section

10d.

     Sec. 10a. (1) A business improvement zone is a public body

corporate and may do 1 or more of the following for the benefit of

property owners located in the business improvement zone:

     (a) Acquire, through purchase, lease, or gift, construct,

develop, improve, maintain, operate, or reconstruct park areas,

planting areas, and related facilities within the zone area.

     (b) Acquire, construct, clean, improve, maintain, reconstruct,

or relocate sidewalks, street curbing, street medians, fountains,

and lighting within the zone area.

     (c) Develop and propose lighting standards within the zone

area.

     (d) Acquire, plant, and maintain trees, shrubs, flowers, or

other vegetation within the zone area.

     (e) Provide or contract for security services with other

public or private entities and purchase equipment or technology

related to security services within the zone area.

     (f) Promote and sponsor cultural or recreational activities.

     (g) Engage in economic development activities, including, but

not limited to, promotion of business, retail, or industrial

development, developer recruitment, business recruitment, business

marketing, business retention, public relations efforts, and market

research.

     (h) Engage in other activity activities with the purpose to

enhance the economic prosperity, enjoyment, appearance, image, and

safety of the zone area.

     (i) Acquire by purchase or gift, maintain, or operate real or

personal property necessary to implement this chapter.

     (j) Solicit and accept gifts or grants to further the zone

plan.

     (k) Sue or be sued.

     (l) Do all other acts and things necessary or convenient to

exercise the powers, duties, and jurisdictions of the business

improvement zone under this act or other laws that relate to the

purposes, powers, duties, and jurisdictions of the business

improvement zone.

     (2) A business improvement zone may contract with a nonprofit

corporation or any other public or private entity and may pay a

reasonable fee to the nonprofit corporation or other public or

private entity for services provided. Two or more business

improvement zones may contract with the same nonprofit corporation

or public or private entity under this subsection.

     (3) A business improvement zone has the authority to borrow

money in anticipation of the receipt of assessments if all of the

following conditions are satisfied:

     (a) The loan will not be requested or authorized, or will not

mature, within 90 days before the expiration of the 7-year 10-year

period.

     (b) The amount of the loan does not exceed 50% of the annual

average assessment revenue of the business improvement zone during

the previous year or, in the case of a business improvement zone

that has been in existence for less than 1 year, the loan does not

exceed 25% of the projected annual assessment revenue.

     (c) The loan repayment period does not extend beyond the 7-

year 10-year period.

     (d) The loan is subject to the revised municipal finance act,

2001 PA 34, MCL 141.2101 to 141.2821.

     (4) The services provided by and projects of a business

improvement zone are services and projects of the business

improvement zone and are not services, functions, or projects of

the municipality in which the business improvement zone is located.

The services provided by and projects of a business improvement

zone are supplemental to the services, projects, and functions of

the city or village in which the business improvement zone is

located.

     (5) The business improvement zone has no other authority than

the authority described in this act or authorized by other laws of

this state.

     Sec. 10b. (1) Except as provided in subsection (4), 1 ONE or

more business improvement zones may be established within a city or

village.

     (2) The If the zone plan for the area provides a basis for

allocating assessments other than assessed value, the majority of

all parcels included in a zone area, both by area and by taxable

value, shall be assessable property. If the zone plan for the zone

area provides for allocation of assessments based upon assessed

value, the majority of all parcels included in a zone area, both by

area and assessed value, shall be assessable property. A zone area

shall be contiguous, with the exception of public streets, alleys,

parks, and other public rights-of-way.

     (3) Except as provided in subsection (4), a A business

improvement zone may be established in a city or village even if

the city or village has established a principal shopping district

or business improvement district under chapter 1. Assessable

property shall not be included in any of the following:

     (a) More than 1 business improvement zone established under

this chapter.

     (b) Both a principal shopping district and a business

improvement district established under chapter 1.

     (4) If at the time of the effective date of the amendatory act

that added this subsection a business improvement district

established under chapter 1 is located in a city or village, a

business improvement zone may not be established under this chapter

within that city or village unless within 180 days of the effective

date of the amendatory act that added this subsection or during

July 2005 or during July every third year after 2005 the governing

body of the city or village adopts a resolution authorizing the

governing body to consider, as provided in section 10e, the

establishment of a business improvement zone under this chapter.

     Sec. 10c. (1) A person may initiate the establishment of a

business improvement zone by the delivery of a petition to the

clerk of the city or village in which a proposed zone area is

located. The petition shall include all of the following:

     (a) The An attached map and description of the geographic

boundaries of the zone area sufficient to identify each assessable

property included.

     (b) The signatures of property owners of parcels representing

not less than 30% of the property owners within the zone area,

weighted as provided in section 10f(2).

     (c) A An attached listing, by tax parcel identification

number, of all parcels within the zone area, separately identifying

assessable property.

     (d) An attached zone plan, which shall include all of the

following:

     (i) The proposed initial board of directors for the zone,

except for a member of the board of directors who may be appointed

by the city or village under section 10g(2).

     (ii) The method for removal, appointment, and replacement of

the board.

     (iii) A description of projects planned during the 10-year

period, including the scope, nature, and duration of the projects.

     (iv) An estimate of the total amount of expenditures for

projects planned during the 10-year period.

     (v) The proposed source or sources of financing for the

projects.

     (vi) If the proposed financing includes assessments, the

projected amount or rate of the assessments for each year and the

basis upon which the assessments are to be imposed on assessable

property.

     (vii) A plan of dissolution for the business improvement zone.

     (e) A basis for allocating assessments in the zone area,

including, but not limited to, assessments based upon taxable value

or assessments based upon assessed value.

     (2) After a petition is filed pursuant to subsection (1), the

clerk shall notify all property owners within the zone area of a

public meeting of the property owners regarding the establishment

of the business improvement zone to be held not less than 45 days

or more than 60 days after the filing of the petition. The notice

shall be sent by first-class mail to the property owners not less

than 14 days prior to the scheduled date of the meeting. The notice

shall include the specific location and the scheduled date and time

of the meeting.

     Sec. 10e. (1) If a zone plan petition is adopted and presented

delivered to the clerk of the city or village in accordance with

section 10d, 10c, the governing body of the city or village shall

within 45 28 days schedule a public hearing of the governing body

to review the zone plan and any proposed assessment and to receive

public comment. The clerk shall notify all owners of parcels within

the zone area of the public hearing by first-class mail.

     (2) At the public hearing required under subsection (1), or at

the next regularly scheduled meeting of the governing body of the

city or village, the governing body shall approve or reject the

establishment of the business improvement zone and the zone plan as

adopted by the property owners under section 10d(3). attached to

the petition under section 10c. If the governing body rejects the

establishment of the business improvement zone and the zone plan,

the clerk shall notify all property owners within the proposed zone

of a reconvened meeting of the property owners within the proposed

zone, which shall be held not sooner than 10 7 days or later than

21 days after the date of the rejection by the governing body. The

notice shall be sent by first-class mail to the property owners not

less than 7 days prior to the scheduled date of the meeting and

shall include the specific location and the scheduled date and time

of the meeting, as determined by the person initiating the

establishment of the business improvement zone under section

10c(1). At the reconvened meeting, the property owners may amend

the zone plan if approved by a majority of the property owners as

provided in section 10d(3). voting at the meeting. The votes of the

property owners at the meeting shall be weighted in the manner

indicated in section 10f(2). The amended zone plan may be

resubmitted to the clerk of the city or village without the

requirement of a new petition under section 10c for approval or

rejection at a meeting of the governing body of the city or village

not later than 60 28 days after the amended zone plan is

resubmitted to the clerk. If a zone plan is not rejected within 60

56 days of the date the amended zone plan is resubmitted to the

clerk, the amended zone plan is considered approved by the

governing body of the city or village. If the amended zone plan is

rejected by the governing body, then the amended zone plan may not

be resubmitted without the delivery of a new petition under section

10c.

     (3) A governing body of a city of village shall consider the

establishment of a business improvement zone and a zone plan for

the business improvement zone under subsection (2) if all of the

following apply:

     (a) The zone plan complies with the requirements of section

10c.

     (b) The zone plan for the business improvement zone provides

that the services to be provided by the business improvement zone

and the projects under the zone plan would be supplemental to the

services, projects, and functions of the city or village.

     (c) The zone plan provides a basis for allocating assessments

that complies with this chapter.

(4) (3) Approval of the business improvement zone and zone

plan shall serve as a determination by the city or village that any

assessment set forth in the zone plan, including the basis for

allocating the assessment, is appropriate, subject only to the

approval of the business improvement zone and the zone plan by the

property owners in accordance with section 10f.

(5) (4) If the governing body of the city or village approves

the business improvement zone and zone plan or if the amended zone

plan is considered approved under subsection (2), the clerk of the

city or village shall set an election pursuant to section 10f not

more than 60 49 days following the approval.

(6) (5) The clerk of the city or village shall send to the

property owners notice by first-class mail of the election not less

than 30 28 days before the election and publish the notice at least

twice once in a newspaper of general circulation in the city or

village in which the zone area is located . The first publication

shall not be less than 10 7 days or more than 30 21 days prior to

the date scheduled for the election. The second publication shall

not be published less than 1 week after the first publication.

(7) (6) The election described in this section and section 10f

is not an election subject to the Michigan election law, 1954 PA

116, MCL 168.1 to 168.992.

(8) (7) The person who filed the petition under section 10c,

the proposed board members, and the property owners may, at the

option and under the direction of the clerk, assist the clerk of

the city or village in conducting the election to keep the expenses

of the election at a minimum.

     Sec. 10f. (1) All property owners as of the date of the

delivery of the petition as provided in section 10c are eligible to

participate in the election. The election shall be conducted by

mail. The question to be voted on by the property owners is the

adoption of the zone plan and the establishment of the business

improvement zone, including the identity of the initial board.

     (2) Votes If the zone plan for the zone area provides a basis

for allocating assessments based upon taxable value, the votes of

property owners shall be weighted in proportion to the amount that

the taxable value of their respective real property for the

preceding calendar year bears to the taxable value of all

assessable property in the zone area. , but in If the zone plan for

the zone area provides for allocation of assessments based upon

assessed value, the votes of property owners shall be weighted in

proportion to the amount that the assessed value of their

respective real property for the preceding calendar year bears to

the assessed value of all assessable property in the zone area. If

the zone plan for the zone area provides a basis for allocating

assessments other than taxable value or assessed value, the votes

of property owners shall be weighed in proportion to the amount

that the weighted value for their respective real property bears to

the total weighted value of all assessable property in the zone

area. In no case shall the total number of votes assigned to any 1

property owner be equal to more than 25% of the total number of

votes eligible to be cast in the election.

     (3) A zone plan and the proposal for the establishment of a

business improvement zone, including the identity of the initial

board, shall be considered adopted upon the approval of more than

60% of the property owners voting in the election, with votes

weighted as provided in subsection (2).

     (4) Upon acceptance or rejection of a business improvement

zone and zone plan by the property owners, the resulting business

improvement zone or the person filing the petition under section

10c shall, at the request of the city or village, reimburse the

city or village for all or a portion of the reasonable expenses

incurred to comply with this chapter. The governing body of the

city or village may forgive and choose not to collect all or a

portion of the reasonable expenses incurred to comply with this

chapter.

     (5) Adoption of a business improvement zone and zone plan

under this section authorizes the creation of the business

improvement zone and the implementation of the zone plan for the 7-

year 10-year period.

     (6) Adoption of a business improvement zone and zone plan

under this section and the creation of the business improvement

zone does not relieve the business improvement zone from following,

or does not waive any rights of the city or village to enforce, any

applicable laws, statutes, or ordinances. A business improvement

zone created under this chapter shall comply with all applicable

state and federal laws.

     (7) To the extent not protected by the immunity conferred by

1964 PA 170, MCL 691.1401 to 691.1415, 691.1419, a city or village

that approves a business improvement zone within its boundaries is

immune from civil or administrative liability arising from any

actions of that business improvement zone.

     Sec. 10g. (1) The day-to-day activities of the business

improvement zone and implementation of the zone plan shall be

managed by a board of directors.

     (2) The board shall consist of an odd number of directors and

shall not be smaller than 5 and not larger than 15 in number. The

board may include 1 director nominated by the chief executive of

Senate Bill No. 257 (H-1) as amended September 12, 2013

the city or village and approved confirmed by the governing body of

the city or village. A nomination not disapproved by a governing

body within 60 days shall stand confirmed.

     (3) The duties and responsibilities of the board shall be

prescribed in the zone plan and to the extent applicable shall

include all of the following duties and responsibilities:

     (a) Developing administrative procedures relating to the

implementation of the zone plan.

     (b) Recommending amendments to the zone plan.

     (c) Scheduling and conducting an annual meeting of the

property owners.

     (d) Developing a zone plan for the next 7-year 10-year period.

     (4) Members of the board shall serve without compensation.

However, members of the board may be reimbursed for their actual

and necessary expenses incurred in the performance of their

official duties as members of the board.

     Sec. 10h. (1) A business improvement zone may be funded in

whole or in part by 1 or more assessments on assessable property,

as provided in the zone plan. An assessment under this chapter

shall be in addition to any taxes or special assessments otherwise

imposed on assessable property. The business improvement zone, with

the approval of the board, may enter into agreements with 1 or more

property owners in the city or village providing for the provision

of business zone activities or services to the property owner or

owners by the business improvement zone in exchange for monetary

contributions to the business improvement zone from the property

owner or owners. [An agreement providing for the provision of business

 zone activities or services described in this subsection shall be in writing and shall be made available to all property owners of assessable property in the zone area.]

     (2) An assessment shall be imposed against assessable property

only on the basis of the benefits to assessable property afforded

by the zone plan. There is a rebuttable presumption that a zone

plan and any project specially benefits all assessable property in

a zone area.

     (3) If a zone plan provides for an assessment, the treasurer

of the city or village in which the zone area is located as an

agent of the business improvement zone shall collect the assessment

imposed by the board under the zone plan on all assessable property

within the zone area in the amount authorized by the zone plan.

     (4) Except as provided in subsection (7) (6), assessments

shall be collected by the treasurer of the city or village as an

agent of the business improvement zone from each property owner and

remitted promptly to the business improvement zone. Assessment

revenue is the property of the business improvement zone and not

the city or village in which the business improvement zone is

located. The business improvement zone may, at the option and under

the direction of the treasurer, assist the treasurer of the city or

village in collecting the assessment to keep the expenses of

collecting the assessment at a minimum.

     (5) The business improvement zone may institute a civil action

to collect any delinquent assessment and interest.

     (6) An assessment imposed under this act is not a special

assessment collected under the general property tax act, 1893 PA

206, MCL 211.1 to 211.157.

(6) (7) An assessment is delinquent if it has not been paid

within 90 days after it was due as provided under the zone plan

Senate Bill No. 257 (H-1) as amended September 12, 2013

imposed under this chapter. Delinquent assessments shall be

collected by the business improvement zone. Delinquent assessments

shall accrue interest at a rate of 1.5% per month until paid.

(7) (8) If any portion of the assessment has not been paid

within 90 days after it was due, that portion of the unpaid

assessment shall constitute a lien on the property. The lien amount

shall be for the unpaid portion of the assessment and shall not

include any applicable interest. Alternatively, a delinquent and

unpaid assessment may, at the request of the business improvement

zone, be returned as delinquent by the treasurer of the city or

village and collected in the same manner as a delinquent tax

special assessment along with any associated interest, fees, and

costs under the general property tax act, 1893 PA 206, MCL 211.1 to

211.155. However, property is not subject to forfeiture,

foreclosure, and sale under sections 78 to 79a of the general

property tax act, 1893 PA 206, MCL 211.78 to 211.79a, for

nonpayment of an assessment under this chapter unless the property

also is subject to forfeiture, foreclosure, and sale under sections

78 to 79a of the general property tax act, 1893 PA 206, MCL 211.78

to 211.79a, for delinquent property taxes. [If a parcel of assessable

 property that has a delinquent and unpaid assessment is sold to a purchaser who is not related or affiliated to the seller, as determined by the board, the board may reduce or eliminate any delinquent and unpaid assessment on that parcel of assessable property if the property is not subject to forfeiture, foreclosure, and sale under sections 78 to 79a of the general property tax act, 1893 PA 206, MCL 211.78 to 211.79a. If the delinquent property taxes are paid, the property may not be forfeited, foreclosed, and sold for an unpaid assessment under this chapter.]

     Sec. 10i. (1) Expenses incurred in implementing any project or

service of a business improvement zone shall be financed in

accordance with the zone plan.

     (2) Assessment revenues under section 10h are the funds of the

business improvement zone and not funds of the state or of the city

or village in which the business improvement zone is located. All

money collected under section 10h shall be deposited in a financial

institution in the name of the business improvement zone.

Assessment revenues may be deposited in an interest generating

account. The business improvement zone shall use the funds only to

implement the zone plan.

     (3) All expenditures by a business improvement zone shall be

audited annually by a certified public accountant. The audit shall

be completed within 9 months of the close of the fiscal year of the

business improvement zone. Within 30 days after completion of an

audit, the certified public accountant shall transmit a copy of the

audit to the board and make copies of the audit available to the

property owners and the public.

     (4) If an annual audit required by this section contains

material exceptions, and the material exceptions are not

substantially corrected the board of the business improvement zone

shall within 90 days of the delivery of the audit , the business

improvement zone shall be dissolved in accordance with the zone

plan upon approval of the dissolution by the governing body of the

city or village in which the business improvement zone is

located.adopt a plan to remedy the exceptions and forward a copy of

that plan to the city or village in which the business improvement

zone is located.

     (5) The board shall publish an annual activity and financial

report. The report shall be available to the public. Each year,

every property owner shall be notified of the availability of the

annual activity and financial report.

     (6) As used in this section, "financial institution" means a

state or nationally chartered bank or a state or federally

chartered savings and loan association, savings bank, or credit

union whose deposits are insured by an agency of the United States

government and that maintains a principal office or branch office

located in this state under the laws of this state or of the United

States.

     Sec. 10k. (1) Prior to the expiration of any 7-year 10-year

period, the board shall notify the property owners within the

business improvement zone of a special meeting by first-class mail

at least 14 days prior to the scheduled date of the meeting to

approve a new zone plan for the next 7-year 10-year period. Notice

under this section shall include the specific location, scheduled

date, and time of the meeting.

     (2) Approval of the new zone plan at the special meeting by

more than 60% of the property owners of assessable property voting

at that meeting, with the vote of the property owners being

weighted in accordance with section 10f(2), constitutes

reauthorization of the business improvement zone for an additional

7-year 10-year period, commencing as of the expiration of the 7-

year 10-year period then in effect. If the new zone plan reflects

any new assessment, or reflects an extension of any assessment

beyond the period previously approved by the city or village in

which the business improvement zone is located, the new or extended

assessment shall be effective only with the approval of the

governing body of the city or village.

     Sec. 10l. (1) Upon written petition duly signed by 20% 30% of

the property owners of assessable property within a zone area and

submitted no sooner than 2 years following the adoption of the

business improvement zone and zone plan, the board shall place on

the agenda of the next annual meeting, if the next annual meeting

is to be held not later than 60 63 days after receipt of the

written petition or a special meeting not to be held later than 60

63 days after receipt of the written petition, the issue of

dissolution of the business improvement zone. Notice of the next

annual meeting or special meeting described in this subsection

shall be made to all property owners by first-class mail not less

than 14 days prior to the date of the annual or special meeting.

The notice shall include the specific location and the scheduled

date and time of the meeting.

     (2) The business improvement zone shall be dissolved upon a

vote of more than 50% of the property owners of assessable property

voting at the meeting, with the votes of the property owners

weighted in accordance with section 10f(2). A dissolution shall not

take effect until the later of the end of the second calendar year

after the vote for dissolution or all contractual liabilities of

the business improvement zone have been paid and discharged.

     (3) Upon dissolution of a business improvement zone, the board

shall dispose of the remaining physical assets of the business

improvement zone. The proceeds of any physical assets disposed of

by the business improvement zone and all money collected through

assessments that is not required to defray the expenses of the

business improvement zone shall be refunded on a pro rata basis to

persons from whom assessments were collected. If the board finds

that the refundable amount is so small as to make impracticable the

computation and refunding of the money, it may be transferred to

the treasurer of the city or village in which the business

improvement zone is located for deposit in the treasury of the city

or village to the credit of the general fund.

     (4) Upon dissolution of a business improvement zone, any

remaining assets of the business improvement zone shall be

transferred to the treasurer of the city or village in which the

business improvement zone is located for deposit in the treasury of

the city or village to the credit of the general fund.

     Sec. 10n. (1) Two or more business improvement zones within

the same city or village may merge into a single business

improvement zone if the board of each business improvement zone

approves a merger agreement among the merging zones and the merger

agreement also is approved by the governing body of the city or

village in which the zones are located.

     (2) The merger agreement shall include, without limitation, a

manner of selecting the board of directors of the merged business

improvement zone, a zone plan for the merged business improvement

zone, and a plan for establishing and collecting assessments under

the merged business improvement zone.

     Enacting section 1. Section 10d of 1961 PA 120, MCL 125.990d,

is repealed.