BIZ: URBAN TOWNSHIPS S.B. 334 (S-1): ANALYSIS AS REPORTED FROM COMMITTEE

Senate Bill 334 (Substitute S-1 as reported) Sponsor: Senator Dave Hildenbrand Committee: Economic Development

Date Completed: 5-13-11

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, many townships have assessment, and to receive public comment. experienced significant commercial and At the public hearing, or at its next regularly retail development in certain areas, and scheduled meeting, the governing body of some reportedly would like to establish the city or village must approve or reject the business improvement zones. It has been establishment of the BIZ and the zone plan. suggested that Chapter 2 should accommodate this interest. An approved BIZ and zone plan must be scheduled for an election for adoption of the CONTENT plan and establishment of the zone, including the identity of the zone's board. The bill would amend Public Act 120 of All owners of assessable (nonresidential) 1961 to allow business improvement property in the zone are eligible to zones in "urban townships", as well as participate in the election. A BIZ may be cities and villages. funded in whole or in part by one or more assessments on assessable property, as Chapter 2 of the Act allows one or more provided in the zone plan. The treasurer of business improvement zones to be the city or village in which a zone is located established within a city or village. The bill must collect the assessment, but instead would allow the establishment of one assessment revenue is the property of the or more business improvement zones in a BIZ and not the city or village. local governmental unit, and would define "local governmental unit" as a city, village, Chapter 2 also contains provisions for the or urban township. The bill would define amendment of a zone plan and the "urban township" as a township with a dissolution of a BIZ, including the role of the population of at least 17,000, in a county city or village in those procedures. with a population of at least 600,000, 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, as above would apply to a "local governmental defined in the substitute bill, would impose unit", rather than to a city or village. an unreasonable barrier to economic development in many areas of the State. MCL 125.990-125.990m The population parameters in the bill would continue to preclude businesses in many ARGUMENTS growing, commercially developed townships from establishing business improvement (Please note: The arguments contained in this zones. Indeed, Cascade Township would not analysis originate from sources outside the Senate have qualified last year, as its population Fiscal Agency. The Senate Fiscal Agency neither was below 17,000 before the 2010 U.S. supports nor opposes legislation.) census. In addition, because the definition Supporting Argument of urban township is limited to the four Business improvement zones are based on a Michigan counties with a population of at simple premise: Those with the greatest least 600,000, townships that have a stake in an area's commercial prosperity population of 17,000 or more but are in assume collective responsibility for the counties with fewer than 600,000 residents area's improvement, and only those who still would be unable to have zones. benefit from physical improvements or Business associations in large, bustling services pay for them. Formation of a BIZ townships, such as Meridian Township in allows owners of a cluster of businesses in a Ingham County and Delta Township in Eaton particular area to band together and assess County, would continue to be denied the themselves in order to pay for programs and benefits of forming a BIZ, while business services that are supplemental to local improvement zones may be established in governmental services. The Act authorizing any city or village in Michigan, regardless of the establishment of a BIZ, however, allows its population or level of commercial the zones to be created only in cities and development. villages. Population trends and, consequently, commercial development Legislative Analyst: Patrick Affholter trends in many parts of the State have led to increased business activity in many FISCAL IMPACT townships. Business owners in some of these communities would like to take By expanding the provisions of business advantage of the collective investment improvement zones to include urban opportunities afforded by the creation of a townships, the bill would increase local unit BIZ, but they cannot establish a zone revenue and expenses in townships by an because they are not located in a city or unknown amount. The actual impact would village. depend upon the specific characteristics of property included within a zone as well as Cascade Township, in Kent County just the provisions of applicable zone plans, outside of Grand Rapids, has a rapidly including whether revenue for the plan were developing commercial corridor that could to be obtained through assessments on benefit from the creation of a BIZ. Business property within a zone. owners in the area would like to form a zone, but they lack the statutory authority The definition of "urban township" would to do so. Under the bill, a BIZ could be limit the bill's provisions to townships established in Cascade Township and other located in Kent, Macomb, Oakland, and urban townships. The formation of a BIZ Wayne Counties. Townships in these under Chapter 2 is voluntary, and the funds counties that would qualify under the bill raised through assessment are separate include: Byron, Cascade, Gaines, and from a business's tax liability, so locating Plainfield Townships in Kent County; BIZ in Cascade Township or elsewhere Chesterfield, Clinton, Harrison, Macomb, would benefit the businesses, residents, and Shelby, and Washington Townships in shoppers in the area without infringing on Macomb County; Bloomfield, Commerce, the collection of tax revenue by the Highland, Independence, Orion, Oxford, township, county, or State. Waterford, West Bloomfield, and White Lake Response: The formation of a BIZ Townships in Oakland County; and should be allowed in any township, as the Brownstown, Canton, Northville, Plymouth, bill originally proposed. Limiting business

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Redford, and Van Buren Townships in Wayne County.

The bill would have no fiscal impact on State government.

Fiscal Analyst: David Zin

A1112\s334a. This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.

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