BIZ: URBAN TOWNSHIPS S.B. 334 (S-2): ANALYSIS AS PASSED BY THE SENATE

Senate Bill 334 (Substitute S-2 as passed by the Senate) Sponsor: Senator Dave Hildenbrand Committee: Economic Development

Date Completed: 6-13-11

RATIONALE

Public Act 120 of 1961 governs principal Under Chapter 2, a person may initiate the shopping districts, business improvement establishment of a BIZ by the delivery of a districts, and business improvement zones. petition to the clerk of the city or village in Chapter 2 (Business Improvement Zone) of which a proposed zone is located. After a the Act allows one or more business petition is filed, the clerk must notify all improvement zones to be established within property owners within the zone area of a a city or village. A business improvement public meeting regarding the establishment zone (BIZ) may conduct certain activities, of the zone. At the meeting, the property pursuant to its zone plan, for the benefit of owners may adopt a zone plan for property owners within the zone. These submission to and approval by the activities generally involve enhancing the governing body of the city or village. If the economic prosperity, appearance, image, zone plan is adopted and presented to the and safety of the zone area, and may be clerk, the governing body of the city or funded through assessments on village must schedule a public hearing to nonresidential property in the zone area. In review the zone plan and any proposed recent years, certain townships have assessment, and to receive public comment. experienced significant commercial and At the public hearing, or at its next regularly retail development, and reportedly would scheduled meeting, the governing body of like to establish business improvement the city or village must approve or reject the zones. It has been suggested that Chapter establishment of the BIZ and the zone plan. 2 should accommodate this interest. An approved BIZ and zone plan must be CONTENT scheduled for an election for adoption of the plan and establishment of the zone, The bill would amend Public Act 120 of including the identity of the zone's board. 1961 to allow business improvement All owners of assessable (nonresidential) zones in "urban townships", as well as property in the zone are eligible to cities and villages. participate in the election. A BIZ may be funded in whole or in part by one or more Chapter 2 of the Act allows one or more assessments on assessable property, as business improvement zones to be provided in the zone plan. The treasurer of established within a city or village. The bill the city or village in which a zone is located instead would allow the establishment of one must collect the assessment, but or more business improvement zones in a assessment revenue is the property of the local governmental unit, and would define BIZ and not the city or village. "local governmental unit" as a city, village, or urban township. The bill would define Chapter 2 also contains provisions for the "urban township" as a township with a amendment of a zone plan and the population of at least 17,000, in a county dissolution of a BIZ, including the role of the with a population of 600,000 or more but city or village in those procedures. less than 800,000, as of the most recent Federal decennial census.

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Under the bill, all of the provisions described improvement zones to urban townships in above would apply to a "local governmental one county, as defined in the S-2 substitute, unit", rather than to a city or village. would impose an unreasonable barrier to economic development in many areas of the MCL 125.990-125.990m State. The population parameters in the bill would continue to preclude businesses in ARGUMENTS many growing, commercially developed townships throughout the State from (Please note: The arguments contained in this establishing business improvement zones. analysis originate from sources outside the Senate Indeed, Cascade Township would not have Fiscal Agency. The Senate Fiscal Agency neither qualified last year, as its population was supports nor opposes legislation.) below 17,000 before the 2010 U.S. census. Supporting Argument In addition, because the definition of urban Business improvement zones are based on a township is limited to one Michigan county, simple premise: Those with the greatest townships that have a population of 17,000 stake in an area's commercial prosperity or more but are in other counties still would assume collective responsibility for the be unable to have zones. Business area's improvement, and only those who associations in large, bustling townships, benefit from physical improvements or such as Meridian Township in Ingham services pay for them. Formation of a BIZ County and Delta Township in Eaton County, allows owners of a cluster of businesses in a would continue to be denied the benefits of particular area to band together and assess forming a BIZ, while business improvement themselves in order to pay for programs and zones may be established in any city or services that are supplemental to local village in Michigan, regardless of its governmental services. The Act authorizing population or level of commercial the establishment of a BIZ, however, allows development. the zones to be created only in cities and villages. Population trends and, Legislative Analyst: Patrick Affholter consequently, commercial development trends in certain areas have led to increased FISCAL IMPACT business activity in some townships. Business owners in at least one of these By expanding the provisions of business communities would like to take advantage of improvement zones to include urban the collective investment opportunities townships, the bill would increase local afforded by the creation of a BIZ, but they unit revenue and expenses in townships cannot establish a zone because they are by an unknown amount. The actual not located in a city or village. impact would depend upon the specific characteristics of property included within Cascade Township, in Kent County just a zone as well as the provisions of outside of Grand Rapids, has a rapidly applicable zone plans, including whether developing commercial corridor that could revenue for the plan were to be obtained benefit from the creation of a BIZ. Business through assessments on property within a owners in the area would like to form a zone. zone, but they lack the statutory authority to do so. Under the bill, a BIZ could be The definition of "urban township" would established in Cascade Township and three limit the bill's provisions to Byron, other townships in Kent County. The Cascade, Gaines and Plainfield Townships formation of a BIZ under Chapter 2 is in Kent County. voluntary, and the funds raised through assessment are separate from a business's tax liability, so locating BIZ in Cascade The bill would have no fiscal impact on Township or elsewhere in the county would State government. benefit the businesses, residents, and shoppers in the area without infringing on Fiscal Analyst: David Zin the collection of tax revenue by the township, county, or State. A1112\s334b. Response: The formation of a BIZ This analysis was prepared by nonpartisan Senate staff should be allowed in any township, as the for use by the Senate in its deliberations and does not bill originally proposed. Limiting business constitute an official statement of legislative intent.

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