May 23, 2012, Introduced by Reps. Haveman, Roy Schmidt, Lyons, Price, MacGregor, Crawford, Heise, Yonker, Wayne Schmidt, Haugh, Shaughnessy, Kowall, Foster, Dillon and Howze and referred to the Committee on Local, Intergovernmental, and Regional Affairs.
A bill to provide for the creation, operation, and dissolution
of neighborhood enhancement districts within certain local units of
government; to provide for neighborhood improvement and enhancement
projects; to provide for levying, collecting, and disbursement of a
special assessment against benefited parcels; to provide for the
issuance of bonds and other obligations; to provide for creating and
approving certain plans; and to provide for establishing advisory
boards.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"neighborhood enhancement act".
Sec. 2. As used in this act:
(a) "Assessable property" means real property in a district
that is not exempt from special assessment under applicable federal
or state law or by another provision in this act and any parcel of
property that is exempt from special assessment under applicable
federal or state law or by another provision in this act but for
which the property owner who owns the property at the time the
special assessment is levied has consented in writing to the levy
of the special assessment.
(b) "Assessment" means an assessment imposed under this act
against assessable property.
(c) "Assessment revenues" means the funds collected from
assessments levied within a district under this act, 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) "Chief administrative officer" means the manager or
administrator of a city or village in a city or village that has a
manager or administrator, or the mayor or village president in a
city or village that does not have a manager or administrator, or
the person designated by that chief administrative officer.
(f) "District plan" means a written plan meeting the
requirements of section 5 that is approved by resolution of the
governing body of the city or village in which the district is
located.
(g) "Governing body" means the governing body of a city or
village in which a district is located or proposed.
(h) "Neighborhood district" or "district" means the area
designated in a resolution adopted by the governing body of the
city or village as the area to be served by the projects to be
undertaken pursuant to a district plan.
(i) "Person" means an individual, partnership, corporation,
limited liability company, association, or other legal entity.
(j) "Property owner" means the record legal title holder, or
an agent authorized by the record legal title holder, of assessable
property according to the property tax records of the treasurer of
the city or village in which the district is located.
Sec. 3. The governing body of a city or village may establish
1 or more districts within its jurisdictional boundaries as
follows:
(a) The creation of a district may be initiated as follows:
(i) The governing body may initiate the creation of a district
by adopting a resolution of intent to create a district.
(ii) Alternatively, the property owners who own at least 51% of
the assessable property within the district as ultimately
determined may file a petition with the clerk of the city or
village in which the proposed district is located to initiate the
creation of a district and, if the governing body determines that
the creation of a district is in the best interests of the property
owners of property within the proposed district and those residing
in the proposed district, the governing body may then adopt a
resolution of intent to create a district.
(b) The resolution of intent to create a district shall
specify the proposed boundaries of the district, state the purpose
of the proposed district including the work to be done or the
projects to be undertaken within the proposed district, provide
estimates of the costs of the work to be done and the projects to
be undertaken in the proposed district, and set the date, time, and
place of a public hearing to be held on the creation of the
district.
(c) The clerk of the city or village shall give written notice
of the date, time, place, and purpose of the public hearing,
together with a drawing showing the boundaries of the proposed
district, by publication in a newspaper of general circulation in
the city or village at least 14 days prior to the date of the
hearing, by mailing by first-class mail to the property owners of
property within the proposed district, and, if the city or village
has a website, by posting on the city's or village's website. Any
notice given by mail may rely upon the last city or village tax
assessment records. The method of giving notice by mail as provided
in this section is declared to be the method that is reasonably
certain to inform those to be notified of the pending proceedings.
(d) At the public hearing, the governing body shall hear
anyone wishing to speak on the creation of the proposed district
and shall receive any written statements, documents, or other
information regarding the creation of the proposed district.
(e) If, prior to the close of the public hearing concerning
the proposed creation of a district, written objections to the
creation of the proposed district are filed by the property owners
of at least 30% of the assessable property in the district as it is
finally determined, the governing body shall not proceed to create
the district until petitions supporting the creation of the
district meeting the signature requirements of subdivision (a)(ii)
are filed with the clerk of the city or village in which the
district is located.
(f) After the public hearing held as required in subdivision
(d) and subject to the requirements of subdivisions (e) and (g),
the governing body may by resolution approved by a majority of its
members create a district. The resolution shall include a
description of and drawing depicting the district boundaries, a
list of the addresses and parcel numbers for each parcel included
in the district, and the purpose for which the district is created.
(g) Property shall not be added to the district unless notice
is given as provided in subdivision (c), or by personal service to
the property owners of the property in the entire proposed
district, and a hearing afforded to the property owners. If a
petition is required because property is added to the district
which makes the original petition insufficient, then a supplemental
petition shall be filed containing sufficient additional signatures
of property owners.
(h) The resolution adopted as provided in subdivision (f) may
also create the district advisory board as provided in section 4
and may also direct the preparation of a proposed district plan as
provided in section 5.
Sec. 4. (1) After creating a district, the governing body
shall form a district advisory board.
(2) A district advisory board shall consist of not fewer than
5 or more than 9 persons appointed by the chief administrative
officer with the consent of the governing body who are property
owners or representatives of property owners of assessable property
within the district or are residents of the district. At least 3
members of the district advisory board shall be residents of the
district. Alternatively, the governing body may designate the
governing board of a neighborhood association as the district
advisory board if the district is entirely located within the
neighborhood area of the neighborhood association.
(3) Meetings of the district advisory board shall be conducted
in compliance with the open meetings act, 1976 PA 267, MCL 15.261
to 15.275, and records of a district advisory board are public
records under the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246.
Sec. 5. (1) The district advisory board shall prepare or cause
to be prepared a district plan.
(2) A district plan shall include the district boundaries, the
activities and projects for the benefit and enhancement of a
district, together with cost estimates, proposed methods of
financing each activity and project, and timetables for undertaking
each activity and project.
(3) If included in the district plan approved as provided in
this act, a city or village may engage in or undertake the
following activities and projects within a district:
(a) Acquire real property for parks and acquire, construct,
install, improve, and maintain park improvements and recreational
facilities.
(b) Acquire, improve, and maintain rights-of-way including
streets, sidewalks, alleys, snow-melt systems, and other
improvements.
(c) Acquire, improve, and maintain other public open areas
such as plazas, gathering places, pavilions, shelters,
amphitheaters, and other improvements and amenities.
(d) Acquire, construct, install, maintain, and improve street
lighting improvements.
(e) Demolish abandoned, dilapidated, blighted, or
nonconforming structures.
(f) Provide enhanced public safety or security services that
may include additional policing, installation of surveillance
technology, and other work.
(g) Provide enhanced code enforcement services.
(h) Make and maintain landscaping improvements in public
areas, parks, and rights-of-way.
(i) Operate or sponsor recreational programs and operate
recreational facilities.
(j) Engage in promotional or marketing activities.
(k) Provide enhanced signage.
(l) Acquire property for, and make and maintain, parking
improvements.
(m) Undertake studies and planning.
(n) Provide enhanced broadband or other telecommunications
services.
(o) Create and finance the implementation of neighborhood
architectural or other themes.
(p) Engage in neighborhood organizational activities.
(4) A district plan shall provide a termination date.
(5) If a district plan will be financed in whole or in part by
levying special assessments pursuant to this act, the district plan
shall include the proposed special assessment roll, an explanation
of the special assessment methodology, the number of special
assessment installments, the interest rate to be charged on
installments, and the procedure, if any, that is available to
persons for whom paying the special assessment would constitute a
hardship.
(6) If a district plan will be financed in whole or in part by
the issuance of bonds in anticipation of the levy of special
assessments, the district plan shall detail the amount of the bond
issue, including the anticipated professional service fees and
other issuance costs.
(7) A plan may include as activity and project costs the
following:
(a) Amounts to be paid to contractors, subcontractors,
consultants, planners, attorneys, financial advisors, surveyors,
architects, engineers, and other professionals.
(b) Amounts to be paid to the city or village for special,
enhanced, or additional services to the district that are not
provided to others in the city or village.
(c) Amounts for the acquisition, leasing, construction,
installation, demolition, alteration, maintenance, repair,
replacement, operation, use, or improvement of real or personal
property in the district.
(d) Reimbursement of the city or village for administrative,
oversight, and other costs it incurs that are attributable to the
district and the planning and implementation of projects and
activities in the district.
(e) Any other costs paid for any activity or project permitted
under this act.
(8) If the nature of the activity or project is such that a
periodic redetermination of costs will be necessary without a
change in the district boundaries, the district plan shall include
in its estimate of costs any projected incremental increases. If at
any time during the term of the district plan an actual incremental
cost increase exceeds the estimate therefor by 10% or more, notice
shall be given as provided in section 6(c) and a hearing afforded
to the property owners of property to be assessed.
(9) A district plan may be amended or extended for a period
not to exceed 7 years or the useful life of any capital
improvements to be made pursuant to the plan in the same manner as
it was first approved.
Sec. 6. A district plan may be approved in the following
manner:
(a) The district advisory board shall make a recommendation
regarding any proposed district plan. A governing body shall not
consider a proposed district plan until the district advisory board
recommends the adoption of the proposed district plan.
(b) After receiving the recommendation of the district
advisory board, the governing body shall set the date, time, and
place of a public hearing to be held on the approval of the
district plan.
(c) The clerk of the city or village shall give written notice
of the date, time, place, and purpose of the public hearing,
together with a drawing showing the boundaries of the district and,
if any parcels are to be specially assessed, a list by addresses
and parcel number of the parcels to be specially assessed, by
publication in a newspaper of general circulation in the city or
village at least 14 days prior to the date of the hearing, by
mailing by first-class mail to the property owners of property
within the district, and, if the city or village has a website, by
posting on the city's or village's website. The notice shall also
state that a copy of the entire district plan is available for
inspection or copying in the office of the city or village clerk
during normal city or village visiting hours. If periodic
redeterminations of cost will be necessary, the notice shall state
that those redeterminations may be made without further notice to
property owners. Any notice given by mail may rely upon the last
city or village tax assessment records. The method of giving notice
by mail as provided in this section is declared to be the method
that is reasonably certain to inform those to be notified of the
pending proceedings. Failure to give notice as required in this
subdivision shall not invalidate an entire special assessment roll,
but only the assessment on property affected by the lack of notice.
A special assessment shall not be declared invalid as to any
property if the property owner actually received notice, waived
notice, or paid any part of the special assessment. If an
assessment is declared void by court or Michigan tax tribunal
decree or judgment, a reassessment against the property may be
made.
(d) At the public hearing the governing body shall hear anyone
wishing to speak regarding the proposed district plan and shall
receive any written statements, documents, or other information
regarding the proposed district plan.
(e) If, prior to the close of the public hearing concerning
the district plan, written objections to the district plan are
filed by the property owners of at least 30% of the assessable
property in the district, the approval the district plan shall be
approved only by a 2/3 vote of the members of the governing body.
(f) A governing body may, prior to approving a district plan,
modify the plan as it deems necessary or advisable after
considering the recommendations of the district advisory board and
information provided as the public hearing. However, if any
modification will result in the increase of any special assessment
levied against any parcel by 10% or more, notice shall be given as
provided in subdivision (b) and a hearing afforded to the property
owners of property to be assessed.
(g) Except as provided in subdivision (e), after the public
hearing held as required subdivision (d), the governing body may by
resolution approved by a majority of its members approve the
district plan.
(h) A city or village may take all steps necessary to
implement an approved district plan. In its resolution approving a
district plan or by a subsequent resolution, a governing body may
delegate part or all of the implementation of an approved district
plan to the district advisory board.
Sec. 7. A city or village may fund activities and projects in
a district from the following sources:
(a) Funds of the city or village that the governing body
budgets for that purpose.
(b) Federal, state, or private grants.
(c) Gifts and donations from individuals or entities.
(d) Fees or rents for services or the use of real or personal
property owned by the city or village within the district.
(e) Special assessments levied against assessable property
within the district in accordance with section 8.
(f) For capital improvement projects, the issuance of bonds in
anticipation of the collection of special assessments levied
pursuant to section 8.
Sec. 8. (1) The city or village may specially assess
assessable property within the district for costs of activities or
projects within the district.
(2) The special assessment roll shall be prepared by the chief
administrative officer of the city or village and included as part
of the district plan.
(3) The hearing on a proposed district plan shall constitute
the hearing on a proposed special assessment roll that is part of
the district plan. Approval of a district plan shall constitute
confirmation of a special assessment roll that is part of the
district plan. After the governing body's approval of a district
plan, all special assessments on a special assessment roll that is
part of the district plan shall be final and conclusive unless an
action contesting an assessment is filed in the Michigan tax
tribunal or a court of competent jurisdiction within 30 days after
the date of the approval of the district plan.
(4) An assessment roll that is part of a district plan shall
list by address and parcel number all of the parcels of land within
the district, the names of the property owners of each parcel, an
identification as to whether each parcel is assessable property,
and the total amount to be assessed against each parcel of land.
The amount to be assessed against an assessable parcel shall be the
relative portion of the whole sum to be levied against all parcels
of land in the special assessment district as the benefit to the
parcel of land bears to the total benefit to all parcels of land in
the special assessment district. If it is determined that all or
any portion of a special assessment should be levied based on the
value of the assessable property being assessed, that assessment or
portion of the assessment shall be based on the taxable value of
the property as determined under section 27a of the general
property tax act, 1893 PA 206, MCL 211.27a.
(5) A parcel of land within a district that has been specially
assessed for any other improvement or activity, which prior special
assessment has not been fully paid but no payments of which prior
special assessment are delinquent, shall be exempt from payment of
any special assessment installment due under this act for any year
in which that prior special assessment has not been fully paid but
no payments of that prior special assessment are delinquent. This
exemption does not apply to a special assessment made against any
parcel of land for failure to comply with requirements of any
federal or state law or local ordinance requirement.
(6) A parcel of land within a district against which a millage
has been levied by a downtown development authority pursuant to
section 12 of 1975 PA 197, MCL 125.1662, shall be exempt from
payment of any special assessment installment due under this act
for any year in which that millage levy is made against that parcel
of land.
(7) Except for capital expenditures, any special assessment or
installments approved pursuant to this act shall not exceed 7 years
in duration. Special assessments and special assessment
installments for capital expenditures shall not exceed the useful
life of the acquisition or other capital improvement.
(8) The governing body may provide that special assessments
are payable in 1 or more installments, but the amount of an
installment shall not be less than 1/2 of the amount of any
subsequent installment. The amount of each installment, if more
than 1, need not be extended upon the special assessment roll until
after approval of the district plan. Subject to the provisions of
section 6(f), the amount of installments for activities or projects
subject to periodic cost revision may be extended upon the special
assessment roll by the governing body without additional public
hearings or public notice. The first installment of a special
assessment shall be due on or before the time after approval of the
district plan as the governing body shall fix. Subsequent
installments shall be due at intervals of 12 months from the due
date of the first installment or from a date the governing body
shall fix.
(9) All installments shall include interest on the unpaid
principal amount of the special assessment, payable annually on
each installment due date, at a rate to be set by the governing
body, not exceeding 1% above the average rate of interest borne by
special assessment bonds issued by the city or village in
anticipation of all or part of the unpaid installments, or, if
bonds are not issued by the township, a county, a drainage
district, or an authority, not exceeding 8% per annum, commencing
in each case from a date fixed by the governing body. Future due
installments of an assessment against any parcel of land may be
paid to the city or village treasurer at any time in full, with
interest accrued through the month in which the final installment
is paid.
(10) If an installment of a special assessment is not paid
when due, then the installment shall be considered to be delinquent
and there shall be collected, in addition to interest as provided
by this section, a penalty at the rate of not more than 1% for each
month, or fraction of a month, that the installment remains unpaid
before being reported to the governing body for reassessment upon
the city or village tax roll.
(11) All special assessments, including any part of the
special assessment deferred as to payment, shall from the date of
approval of the district plan constitute a lien upon the respective
parcels of land assessed. That lien shall be of the same character
and effect as the lien created for city or village ad valorem
property taxes and shall include accrued interest and penalties.
(12) The approval of a district plan shall constitute
direction that any special assessments that are part of the
district plan be collected. The city or village clerk shall deliver
to the city or village treasurer that special assessment roll, to
which the clerk shall attach the clerk's warrant commanding the
treasurer to collect the special assessments in accordance with the
governing body's directions. That warrant shall further require the
treasurer, 90 days before the date on which the city or village
sends its ad valorem property tax bills, to submit to the governing
body a sworn statement setting forth the addresses, parcel numbers,
and property owners of the assessable property for which special
assessment installments are delinquent and the amount of the
delinquency, including accrued interest and penalties computed to
the date 90 days before the date on which the tax bills are sent.
Upon receiving the special assessment roll and warrant, the
treasurer shall proceed to collect the special assessments as they
become due.
(13) A property owner who by reason of hardship is unable to
pay a special assessment installment may have the assessment
deferred by application to the city or village treasurer. Upon
receipt of evidence of hardship, the city or village may defer
partial or total payment of the special assessment installment. The
governing body may adopt an ordinance to define hardship and to
permit deferred or partial payment of a special assessment
installment. As a condition of granting the deferred or partial
payment of a special assessment installment, the governing body
shall require that any deferred special assessment installment
constitute a recorded lien against the property.
(14) If the city or village treasurer reports as delinquent
any special assessment installment or part of the special
assessment installment, the governing body shall certify the same
to the city or village assessor, who shall reassess on the annual
city or village tax roll of the year in a column headed "special
assessments" the delinquent sum, with interest and penalties to 90
days before the date of sending the tax bills that year, and an
additional penalty of 6% of the total amount. Thereafter the laws,
charter provisions, and ordinances relating to city or village ad
valorem property taxes shall be applicable to the reassessments.
(15) If any parcel of land is divided after a district plan is
approved that includes a special assessment against that parcel,
but before the collection of that special assessment, the chief
administrative officer shall apportion the uncollected amounts
among the several divisions, and the report of the apportionment
shall be, unless appealed in writing by any party within 14 days of
the date of notice of the apportionment to the governing body,
conclusive upon all parties. The chief administrative officer shall
send a written notice of the apportionment to the parties at the
addresses as are on the city or village tax records or as provided
in writing to the chief administrative officer. If an appeal is
made, the governing body shall hold a public hearing providing at
least 14 days' notice by first-class mail of the date, time, and
place of the public hearing. After the public hearing, the
apportionment made by the governing body shall be conclusive upon
all parties.
(16) If the special assessments that are part of a district
plan prove insufficient for any reason, including the
noncollection, to pay for principal and interest on the bonds
issued in anticipation of the collection of the special assessment,
then the governing body shall make additional pro rata assessments
to supply the deficiency, but the total amount assessed against any
parcel of land shall not exceed the value of the benefits received
from the improvement. Should the total amount collected on
assessments prove larger than necessary by more than 5% of the
original special assessment roll approved as part of a district
plan, then the surplus shall be prorated among the properties
assessed in accordance with the amount assessed against each and
applied toward the payment of the next city or village tax levied
against the properties, respectively, or, if there be no such tax,
then it shall be refunded to the persons who are the property
owners of the properties on the date of the passage of the
governing body's resolution ordering such refund. Any surplus of 5%
or less may be used to fund other activities or projects benefiting
the district.
(17) If any special assessment is, in the opinion of the
governing body, invalid by reason of irregularities or
informalities in the proceedings, or if the Michigan tax tribunal
or any court of competent jurisdiction shall adjudge any special
assessment to be illegal, the governing body shall, whether the
activity or project has been undertaken or not and whether any part
of the special assessment has been paid or not, have power to
proceed from the last step at which the proceedings were legal and
cause a new special assessment to be made for the same purpose for
which the former special assessment was made. All proceedings on
the reassessment and its collection shall be conducted in the same
manner as provided for the original assessment, and whenever an
assessment or any part a special assessment levied upon any
premises has been so set aside, if that special assessment has been
paid and not refunded, the payment so made shall be applied to the
reassessment.
(18) Any public or private entity whose property in a district
is exempt by law from special assessment may agree to pay the
special assessments against that property and, if it does so, the
special assessment, including all installments, shall be a valid
claim against that entity and a valid lien upon that property.
Sec. 9. A city or village by resolution of its governing body
adopted after the district plan is approved may borrow money and
issue the bonds of the city or village in anticipation of the
collection of special assessments levied pursuant to an approved
district plan to defray all or any part of the cost of any capital
improvement made under this act. Bonds issued under this section
shall not exceed the amount of the special assessments in
anticipation of the collection of which they are issued. Bonds may
be issued in anticipation of the collection of special assessments
levied in respect to 1 or more public improvements, but no district
shall be compelled to pay the obligation of any other district. The
city or village may pledge its full faith and credit for the prompt
payment of the principal of and interest on the bonds authorized
under this section. The issuance of bonds under this section is
subject to the revised municipal finance act, 2001 PA 34, MCL
141.2101 to 141.2821.
Sec. 10. (1) If a governing body does not wish to issue bonds
to fund a capital improvements within a district, as an alternative
method of funding the cost of a capital improvement made within a
district under this act, after a district plan that includes a
special assessment roll is approved, the city or village may
advance the cost of the capital improvement from a city or village
neighborhood enhancement district revolving fund. The amount
advanced shall not exceed the amount that the governing body
anticipates will be collected by the special assessments. The
amount advanced by the city or village shall bear interest at a
rate not exceeding 6% per annum. Repayment of the advancements can
be made from special assessments or installments of special
assessments levied against the assessable property in the benefited
district.
(2) The governing body by resolution may create and designate
a fund to be known as the neighborhood enhancement district
revolving fund to be initially funded by the transfer of the city
or village funds as the governing body shall designate. The
governing body may transfer funds from the neighborhood enhancement
district revolving fund to the fund from which they were originally
transferred, together with interest earned on such funds, when in
the judgment of the governing body funds should be transferred.
Sec. 11. The powers granted in this act may be exercised by
any city or village and shall be in addition to the powers granted
by any other statute. However, the powers granted by this act are
those expressly provided in this act and do not include any
incidental or implied powers.
Sec. 12. Interest earned from the investment of money
collected under a special assessment levied under this act or of
money received as bond proceeds from a bond issued under this act,
or money from interest or penalties charged and collected on an
unpaid special assessment under this act, shall only be used for
the following:
(a) To pay for the activity or project for which the special
assessment is levied.
(b) To pay the principal and interest of bonds that are issued
for the capital improvement for which the special assessment is
levied.
(c) To pay the principal and interest of an advance from the
city or village made pursuant to section 10.
Sec. 13. A city or village exercising any powers under this
act shall publish an annual activity and financial report that, at
a minimum, details by district the activities and projects within
the district, the amounts of any specials assessments or other
funds that are collected, the uses of the special assessments and
other funds, and the amounts of all expenditures. The report or
links to the report shall be posted on the city or village website,
if any, and notice of the availability of the report shall be sent
to all property owners of property within a district.
Sec. 14. Revenues collected and expenditures made under this
act shall be audited for each district within the city or village
as part of the annual audit of the city or village required to be
made by law.