Bill Text: MI SB0792 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Economic development; development incentives; neighborhood improvement districts; establish. Creates new act.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-11-02 - Referred To Committee On Economic Development [SB0792 Detail]
Download: Michigan-2011-SB0792-Introduced.html
SENATE BILL No. 792
November 2, 2011, Introduced by Senator HUNTER and referred to the Committee on Economic Development.
A bill to provide for the creation, operation, and dissolution
of neighborhood improvement districts; to permit the creation of
certain boards; and to authorize the collection and disbursement of
revenue.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"neighborhood improvement district act".
Sec. 2. As used in this act:
(a) "Assessable property" means real property in a district
area that is classified as residential real property under section
34c of the general property tax act, 1893 PA 206, MCL 211.34c, that
is not exempt from the collection of taxes under the general
property tax act, 1893 PA 206, MCL 211.1 to 211.155.
(b) "Assessment" means an assessment imposed under this act
against assessable property for the benefit of the property owners.
(c) "Assessment revenues" means the money collected by a
neighborhood improvement district from any assessments, including
any interest on the assessments.
(d) "Blighted" means that term as described in section 2 of
the brownfield redevelopment financing act, 1996 PA 381, MCL
125.2652.
(e) "Board" means the board of directors of a neighborhood
improvement district.
(f) "District area" means the area designated in the district
plan as the area to be served by the neighborhood improvement
district.
(g) "District plan" means a set of goals, strategies,
objectives, and guidelines for the operation of a neighborhood
improvement district, as approved at a meeting of property owners
conducted under section 6.
(h) "Neighborhood improvement district" means a neighborhood
improvement district created under this act.
(i) "Person" means an individual, partnership, corporation,
limited liability company, association, or other legal entity.
(j) "Project" means any activity for the benefit of property
owners authorized by section 3 to enhance the neighborhood
improvement district.
(k) "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 neighborhood improvement district is located.
(l) "7-year period" means the period in which a neighborhood
improvement district is authorized to operate, beginning on the
date that the neighborhood improvement district is created or
renewed and ending 7 calendar years after that date.
Sec. 3. (1) A neighborhood improvement district is a public
body corporate and may do 1 or more of the following for the
benefit of property owners located in the neighborhood improvement
district:
(a) Acquire, through purchase, lease, or gift, construct,
develop, improve, maintain, operate, or reconstruct park areas,
planting areas, and related facilities within the district area.
(b) Acquire, construct, clean, improve, maintain, reconstruct,
or relocate sidewalks, street curbing, street medians, fountains,
and lighting within the district area.
(c) Develop and propose lighting standards within the district
area.
(d) Acquire, plant, and maintain trees, shrubs, flowers, or
other vegetation within the district 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 district area.
(f) Promote and sponsor cultural or recreational activities.
(g) Demolish abandoned buildings and make other improvements
in the district area.
(h) Engage in other activity with the purpose to enhance the
economic prosperity, enjoyment, appearance, image, and safety of
the district area.
(i) Acquire by purchase or gift, maintain, or operate real or
personal property necessary to implement this act.
(j) Solicit and accept gifts or grants to further the
development plan.
(k) Sue or be sued.
(2) A neighborhood improvement district 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 period.
(b) The amount of the loan does not exceed 50% of the annual
average assessment revenue of the neighborhood improvement district
during the previous year or, in the case of a neighborhood
improvement district 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 period.
(d) The loan is subject to the revised municipal finance act,
2001 PA 34, MCL 141.2101 to 141.2821.
(3) The services provided by and projects of a neighborhood
improvement district are services and projects of the neighborhood
improvement district and are not services, functions, or projects
of the municipality in which the neighborhood improvement district
is located. The services provided by and projects of a neighborhood
improvement district are supplemental to the services, projects,
and functions of the city or village in which the neighborhood
improvement district is located.
(4) The neighborhood improvement district has no other
authority than the authority described in this act.
Sec. 4. (1) One or more neighborhood improvement districts may
be established within a city or village.
(2) The majority of all parcels included in a district area,
both by area and by taxable value, shall be assessable property. A
district area shall be contiguous, with the exception of public
streets, alleys, parks, and other public rights-of-way.
Sec. 5. (1) A person may initiate the establishment of a
neighborhood improvement district by the delivery of a petition to
the clerk of the city or village in which a proposed district area
is located. The petition shall include all of the following:
(a) The boundaries of the district area.
(b) The signatures of property owners of parcels representing
not less than 30% of the property owners within the district area.
(c) A listing, by tax parcel identification number, of all
parcels within the district area, separately identifying assessable
property.
(2) After a petition is filed pursuant to subsection (1), the
clerk shall notify all property owners within the district area of
a public meeting of the property owners regarding the establishment
of the neighborhood improvement district 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. 6. (1) At the meeting required by section 5, the property
owners may adopt a district plan for submission to and approval by
the governing body of the city or village in which the neighborhood
improvement district is located.
(2) A district plan shall include all of the following:
(a) A description of the boundaries of the district area
sufficient to identify each assessable property included.
(b) The proposed initial board of directors, except for a
director of the board who may be appointed by the city or village
under section 9(2).
(c) The method for removal, appointment, and replacement of
the board.
(d) A description of projects planned during the 7-year
period, including the location, scope, nature, and duration of the
projects.
(e) An estimate of the total amount of expenditures for
projects planned during the 7-year period.
(f) The proposed source or sources of financing for the
projects.
(g) 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.
(h) A listing, by tax parcel identification number, of all
parcels within the district area, separately identifying assessable
property.
(i) A plan of dissolution for the neighborhood improvement
district.
(j) The identification of all blighted property inside the
district area.
(k) A written plan for providing hardship exemptions to the
assessment as determined by the board.
(3) A district plan shall be considered adopted by the
property owners if a majority of the property owners voting at the
meeting approve the district plan.
(4) Any district plan adopted under this section shall be
presented to the clerk of the city or village in which the district
area is located.
(5) The assessment shall not be greater than $300.00 if the
neighborhood improvement district is located in a city with a
population of 600,000 or more.
Sec. 7. (1) If a district plan is adopted and presented to the
clerk of the city or village in accordance with section 6, the
governing body of the city or village shall within 45 days schedule
a public hearing of the governing body to review the district plan
and any proposed assessment and to receive public comment. The
clerk shall notify all owners of parcels within the district area
of the public hearing by first-class mail.
(2) At the public hearing, 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 neighborhood
improvement district and the district plan as adopted by the
property owners under section 6(3). If the governing body rejects
the establishment of the neighborhood improvement district and the
district plan, the clerk shall notify all property owners within
the district area of a reconvened meeting of the property owners
which shall be held not sooner than 10 days or later than 21 days
after the date of the rejection by the governing body. If the
governing body rejects the establishment of the neighborhood
improvement district and the district plan, the clerk shall state
the specific reasons for the rejection. 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 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
neighborhood improvement district under section 4. At the
reconvened meeting, the property owners may amend the district plan
if approved by a majority of the property owners as provided in
this act. The amended district plan may be resubmitted to the clerk
of the city or village without the requirement of a new petition
under section 5 for approval or rejection at a meeting of the
governing body of the city or village not later than 60 days after
the amended district plan is resubmitted to the clerk. If a
district plan is not rejected within 60 days of the date the
amended district plan is resubmitted to the clerk, the amended
district plan is considered approved by the governing body of the
city or village. If the amended district plan is rejected by the
governing body, then the amended district plan may not be
resubmitted without the delivery of a new petition under section 5.
(3) Approval of the neighborhood improvement district and
district plan shall serve as a determination by the city or village
that any assessment set forth in the district plan, including the
basis for allocating the assessment, is appropriate, subject only
to the approval of the neighborhood improvement district and the
district plan by the property owners in accordance with section 8.
(4) If the governing body of the city or village approves the
neighborhood improvement district and district plan or if the
amended district plan is considered approved under subsection (2),
the clerk of the city or village shall set an election pursuant to
section 8 not more than 60 days following the approval.
(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 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 district area is located. The publication shall not be
less than 10 days or more than 30 days prior to the date scheduled
for the election.
(6) The election described in this section and section 8 is
not an election subject to the Michigan election law, 1954 PA 116,
MCL 168.1 to 168.992.
(7) The person who filed the petition under section 5, 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. 8. (1) All property owners as of the date of the delivery
of the petition as provided in section 5 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 district plan and the establishment of the
neighborhood improvement district, including the identity of the
initial board.
(2) A district plan and the proposal for the establishment of
a neighborhood improvement district, 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.
(3) Upon acceptance or rejection of a neighborhood improvement
district and district plan by the property owners, the resulting
neighborhood improvement district or the person filing the petition
under section 5 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 act. 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 act.
(4) Adoption of a neighborhood improvement district and
district plan under this section authorizes the creation of the
neighborhood improvement district and the implementation of the
district plan for the 7-year period.
(5) Adoption of a neighborhood improvement district and
district plan under this section and the creation of the
neighborhood improvement district does not relieve the neighborhood
improvement district from following, or does not waive any rights
of the city or village to enforce, any applicable laws, statutes,
or ordinances. A neighborhood improvement district created under
this act shall comply with all applicable state and federal laws.
(6) A city or village that approves a neighborhood improvement
district within its boundaries is immune from civil or
administrative liability arising from any actions of that
neighborhood improvement district to the same extent as protected
by the immunity conferred by 1964 PA 170, MCL 691.1401 to 691.1419.
Sec. 9. (1) The day-to-day activities of the neighborhood
improvement district and implementation of the district 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
the city or village and approved by the governing body of the city
or village.
(3) The duties and responsibilities of the board shall be
prescribed in the district 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 district plan.
(b) Recommending amendments to the district plan.
(c) Scheduling and conducting an annual meeting of the
property owners.
(d) Developing a district plan for the next 7-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. 10. (1) A neighborhood improvement district may be funded
in whole or in part by 1 or more assessments on assessable
property, as provided in the district plan. An assessment under
this act shall be in addition to any taxes or special assessments
otherwise imposed on assessable property.
(2) An assessment shall be imposed against assessable property
only on the basis of the benefits to assessable property afforded
by the district plan. There is a rebuttable presumption that a
district plan and any project specially benefits all assessable
property in a district area.
(3) If a district plan provides for an assessment, the
treasurer of the city or village in which the district area is
located as an agent of the neighborhood improvement district shall
collect the assessment imposed by the board under the district plan
on all assessable property within the district area in the amount
authorized by the district plan.
(4) Except as provided in subsection (7), assessments shall be
collected by the treasurer of the city or village as an agent of
the neighborhood improvement district from each property owner and
remitted promptly to the neighborhood improvement district.
Assessment revenue is the property of the neighborhood improvement
district and not the city or village in which the neighborhood
improvement district is located. The neighborhood improvement
district 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 neighborhood improvement district 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 211.155.
(7) An assessment is delinquent if it has not been paid within
90 days after it was due as provided under the district plan
imposed under this act. Delinquent assessments shall be collected
by the neighborhood improvement district. Delinquent assessments
shall accrue interest at a rate of 1.5% per month until paid.
(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
interest.
Sec. 11. (1) Expenses incurred in implementing any project or
service of a neighborhood improvement district shall be financed in
accordance with the district plan.
(2) Assessment revenues under section 10 are the funds of the
neighborhood improvement district and not funds of the state or of
the city or village in which the neighborhood improvement district
is located. All money collected under section 10 shall be deposited
in a financial institution in the name of the neighborhood
improvement district. Assessment revenues may be deposited in an
interest generating account. The neighborhood improvement district
shall use the funds only to implement the district plan.
(3) All expenditures by a neighborhood improvement district
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 neighborhood improvement district. 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 within 90 days of the delivery of the
audit, the neighborhood improvement district shall be dissolved in
accordance with the district plan upon approval of the dissolution
by the governing body of the city or village in which the
neighborhood improvement district 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. 12. A district plan may be amended. Amendments shall be
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. A district plan amendment
changing any assessment is effective only if also approved by the
governing body of the city or village in which the neighborhood
improvement district is located.
Sec. 13. (1) Prior to the expiration of any 7-year period, the
board shall notify the property owners of a special meeting by
first-class mail at least 14 days prior to the scheduled date of
the meeting to approve a new district plan for the next 7-year
period. Notice under this section shall include the specific
location, scheduled date, and time of the meeting.
(2) Approval of the new district plan at the special meeting
by 60% of the property owners of assessable property voting at that
meeting constitutes reauthorization of the neighborhood improvement
district for an additional 7-year period, commencing as of the
expiration of the 7-year period then in effect. If the new district
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 neighborhood improvement district is located,
the new or extended assessment shall be effective only with the
approval of the governing body of the city or village.
Sec. 14. (1) Upon written petition duly signed by 20% of the
property owners of assessable property within a district area, 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 days after
receipt of the written petition or a special meeting not to be held
later than 60 days after receipt of the written petition, the issue
of dissolution of the neighborhood improvement district. 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 neighborhood improvement district shall be dissolved
upon a vote of more than 50% of the property owners of assessable
property voting at the meeting. A dissolution shall not take effect
until all contractual liabilities of the neighborhood improvement
district have been paid and discharged.
(3) Upon dissolution of a neighborhood improvement district,
the board shall dispose of the remaining physical assets of the
neighborhood improvement district. The proceeds of any physical
assets disposed of by the neighborhood improvement district and all
money collected through assessments that is not required to defray
the expenses of the neighborhood improvement district 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 neighborhood improvement district is located
for deposit in the treasury of the city or village to the credit of
the general fund.
(4) Upon dissolution of a neighborhood improvement district,
any remaining assets of the neighborhood improvement district shall
be transferred to the treasurer of the city or village in which the
neighborhood improvement district is located for deposit in the
treasury of the city or village to the credit of the general fund.
Sec. 15. (1) The board shall conduct business at a public
meeting held in compliance with the open meetings act, 1976 PA 267,
MCL 15.261 to 15.275. Public notice of the time, date, and place of
the meeting shall be given in the manner required by the open
meetings act, 1976 PA 267, MCL 15.261 to 15.275.
(2) A meeting of property owners under section 5 shall be
conducted at a public meeting held in compliance with the open
meetings act, 1976 PA 267, MCL 15.261 to 15.275. Public notice of
the time, date, and place of the meeting shall be given in the
manner required by the open meetings act, 1976 PA 267, MCL 15.261
to 15.275.
(3) A writing prepared, owned, used, in the possession of, or
retained by the neighborhood improvement district in the
performance of its duties under this act is a public record under
the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.
(4) All meetings of the board or property owners described in
this act shall be conducted within the city or village in which the
neighborhood improvement district is or is to be located.
