Session Laws

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

The General Laws are hereby amended by inserting after chapter 40N the following chapter:- `tuc CHAPTER 40 O. BUSINESS IMPROVEMENT DISTRICTS.

Section 1. As used in this chapter the following words shall, unless the context clearly requires otherwise, have the following meanings:

"Business improvement district board of directors" or "Board of directors", a locally designated board of property owners or their designees who are assigned responsibility for the management of a business improvement district.

"BID", a business improvement district formed pursuant to this chapter, which is a contiguous geographic area with clearly defined boundaries in which at least three-fourths of the area is zoned or used for commercial, industrial, retail, or mixed uses.

"BID member", a property owner who elects to participate in a BID.

"Elector", a BID member, or a natural person designated by a member to vote by proxy for such member; provided, however, that such designation shall be in writing and filed with the city or town clerk; provided, further, that only one such proxy may be designated by an owner.

"Fee", a payment for services or improvements specified by the BID improvement plan.

"Improvement plan", the strategic plan for the BID which sets forth the supplemental services and programs, revitalization strategy, budget and fee structure, as well as the management entity for the business improvement district, and is approved by the local municipal governing body as part of the creation of the BID. An improvement plan shall, within the limitations described in section nine, be updated at least once every three years by the BID board of directors, and a copy thereof shall be mailed or delivered to each BID member. The updated improvement plan shall take effect upon the approval of a majority of the electors. Any amendment to the improvement plan under section nine shall be deemed to be an update of the improvement plan.

"Local municipal governing body", the city council or board of aldermen in a city or the board of selectmen or town council in a town.

"Management entity", an entity designated in an improvement plan to receive funds to carry out and implement the purposes of the BID, and which shall be governed by the BID board of directors. The improvement plan may designate the BID board of directors to act as the management entity, or may designate that the management entity will be selected by the board of directors. If a management entity is utilized, such entity shall be required to furnish a surety bond conditioned on the faithful performance of its duties.

"Property", any real property located within the BID.

"Property owner", the owner of record of property.

"Standard government services", governmental functions, programs, activities, facilities, improvements and other services which a municipality is authorized to perform or provide.

"Supplemental service", the provision of programs, public services, activities, amenities, or information in addition to the standard governmental services provided to the BID.

Section 2. The rights and powers of a BID approved by a municipal governing body shall include: retaining or recruiting business; administering and managing central and neighborhood business districts; promoting economic development; managing parking; designing, engineering, constructing, maintaining, or operating buildings, facilities, urban streetscapes or infrastructures to further economic development and public purposes; conducting historic preservation activities; leasing, owning, acquiring, or optioning real property; supplementing maintenance, security, or sanitation; planning and designing services; formulating a fee structure; accumulating interest; incurring costs or indebtedness; entering into contracts; suing and being sued; employing legal and accounting services; undertaking planning, feasibility and market analyses; developing common marketing and promotional activities; and supporting public art and human and environmental services as related to the enhancement of the business district or other supplemental services or programs that would further the purposes of this chapter.

Section 3. The organization of a BID shall be initiated by a petition of the property owners within the proposed BID which shall be filed in the office of the clerk of the municipality.

Such petition shall contain:

(1) the signatures of the owners of at least fifty-one percent of the assessed valuation of all real property within the proposed BID and sixty percent of the real property owners within the proposed BID;

(2) a description of and a site map delineating the boundaries of the proposed BID;

(3) the proposed improvement plan which shall set forth the supplemental services and programs, revitalization strategy, update mechanism, and budget and fee structures;

(4) the identity and location of the management entity designated to implement and oversee the ongoing improvement plan; and

(5) the criteria for waiving the fee for any property owner within the BID who can provide evidence that the imposition of such fee would create a significant financial hardship.

Such petition may include a mechanism for reimbursing the municipality for the costs incurred in establishing the BID, and for costs incurred in collecting the district fees.

A copy of said petition shall be filed with the secretary of the executive office of communities and development within thirty days of receipt of such petition by the clerk of the municipality.

Section 4. The local municipal governing body shall hold a public hearing within sixty days of the receipt of a petition. Written notification of such hearing shall be sent to each property owner within the boundary of the proposed BID at least thirty days prior to such hearing, by mailing notice to the address listed in the property tax records. Notification of the hearing shall also be published for two consecutive weeks in a newspaper of general circulation in the area at least fourteen days prior to such hearing. Such public notice shall contain the proposed boundaries of the BID, the proposed fee level, the proposed benefits, the basis for determining the district fee, and the process by which a property owner may elect not to participate in or benefit from such BID.

Prior to the public hearing, the local municipal governing body shall direct the town clerk or city clerk or his designee to determine that the establishment criteria has been met as set forth in section three.

At the public hearing, the local municipal governing body shall determine if the petition satisfies the purposes set forth and the establishment criteria of this chapter and shall obtain public comment regarding the improvement plan and the effect the proposed BID will have on the property owners, tenants, and others within the BID. If it appears that said petition is not in conformity with the purposes and establishment criteria, the local municipal governing body shall dismiss the petition. At the public hearing, the presiding officer or clerk of said governing body shall read into the record the basis for determining the district fee pursuant to section seven and the process for property owners to follow who elect not to participate in or benefit from said BID in accordance with the provisions of this section.

Within forty-five days after the public hearing, the local municipal governing body, in its sole discretion, may by a vote declare the district organized and describe the boundaries and service area of the district. Upon such declaration, the BID may commence operations.

Notice of the declaration of the organization of the BID and of the time period within which an owner of real estate within the district may elect not to participate shall be mailed or delivered to each property owner within the proposed BID. Said notice shall describe the process by which a property owner may elect not to participate in the BID, explain that membership in the bid is irrevocable until dissolution of the BID or a transfer of BID property, and include a description of the basis for determining the district fee, the projected fee level, and the proposed services to be provided by the BID. Such notice shall also be published for two consecutive weeks in a newspaper of general circulation in the area, the last publication being at least seven days prior to the last date for an election not to participate.

Any property owner within the BID may, within thirty calendar days after such declaration of organization by the local municipal governing body, elect not to participate and not be subject to the BID fee. Such property owner shall notify, in writing, the city or town clerk of the intent not to participate in the BID. Such property owner shall not receive benefits or services from the BID. Property owners who choose not to participate in the BID may, at a later date, elect to participate in the BID by notifying the city or town clerk, the BID board of directors, and the management entity in writing. The decision to participate in the BID shall be permanent until dissolution of the BID as set forth in section ten, or until the transfer of such property as provided herein. Upon the transfer of any participating property, the new owner shall have the option to withdraw the property from BID participation within thirty days of closing; provided, however, that the new owner shall reimburse the BID for the allocable share of any debt which may have been incurred but remains unpaid prior to the date of withdrawal, as determined by the management entity.

Nothing in this section shall prevent the filing of a subsequent petition for a similar project.

Section 5. Each BID shall have a board of directors who shall oversee the management entity to insure the implementation of the improvement plan. The BID board of directors shall be designated by a majority vote of the electors, or their designees, who own real property participating in the BID. The local municipal governing body may establish rules and regulations governing the BID board of directors.

Section 6. All real property located within the proposed BID shall be considered in the fee formula for the supplemental services and programs as outlined in the improvement plan.

The municipality may exempt from fees certain properties, specifically classified as: (1) owner-occupied residential; (2) agricultural; or (3) tax exempt.

Section 7. By formal approval of a BID, the local municipal governing body shall adopt the district fee structure for the financing of items submitted in the improvement plan for the BID; provided, however, that the total fees assessed in any one year may not exceed one-half of one percent of the sum of the assessed valuation of the real property owned by participating members in the BID district.

The basis of such district fee may be determined by a formula utilizing any one or a combination of the following:

(1) different levels for varying classifications of real property;

(2) benefit zones;

(3) assessed valuation;

(4) square footage;

(5) street frontage; or

(6) any other formula which meets the objectives of the BID.

The BID, through its improvement plan, shall have the option to limit or cap the maximum annual fee derived from individual properties or the total annual revenue generated by the BID.

The formula for determining the district fee structure shall be set forth in the original petition as required by section three.

In addition to receiving funds from the district fee, the management entity shall be authorized to receive grants, donations or gifts on behalf of the BID.

Section 8. The collector-treasurer of each municipality is hereby authorized to collect such district fees in designated BIDs and to disburse the funds to the designated management entity.

The district fees collected shall be used solely to fund items identified and approved in the improvement plan for the BID.

The collector-treasurer shall disburse revenues to the management entity within thirty days of the collection of such fees, together with the interest earned on the holding of such fees.

Following establishment of the BID, all fees billed by or on behalf of the BID and unpaid after thirty days from the date of billing shall become a lien on the property, which shall have priority over all other liens except municipal liens and mortgages of record prior to the recording of a notice of lien, if notice of the lien is duly recorded by the management entity in the appropriate registry of deeds or land court registry district.

An annual audit, certified by a certified public accountant, of the revenues generated, grants, donations, and gifts received by the BID and its expenses shall be made within one hundred and twenty days of the close of the fiscal year, and shall be placed on file with the collector. Such accounting shall be a public record.

Section 9. At any time after the establishment of a BID pursuant to the provisions of this chapter, the improvement plan upon which the establishment was based may, upon the recommendation of the BID board of directors, with the concurrence of the owners of at least fifty-one percent of the assessed valuation of all participating real property within the BID and fifty-one percent of the participating real property owners within the BID, be amended by the local municipal governing body after compliance with the procedures set forth in this section.

Amendments to the BID improvement plan which provide for additional improvements, program services or expenditures which affect more than twenty-five percent of the total project budget, incurring indebtedness, changes to the fee structure or management entity or changes to the district boundaries shall be subject to the approval of the local municipal governing body; provided, however, that said governing body, after a public hearing, determines that it is in the public interest to adopt said amendments.

The local municipal governing body shall give notice of the public hearing for amendment by publication of a notice, in at least one newspaper having general circulation in the district, specifying the time and the place of such hearing and the amendments to be considered. Such notice shall be published once at least thirty days prior to the date of such hearing.

The local municipal governing body may, within thirty days of the public hearing and, in its sole discretion, declare the amendments approved or disapproved. If approved, such amendments shall be effective upon the date of such approval.

Upon the adoption of any amendment to the district boundaries which increases the size of the district, any owner of property to be added to the district shall be notified of the new boundaries of the district in accordance with section four and may elect not to participate in the BID as provided in such section.

Section 10. A BID may be dissolved by petition to the local municipal governing body and a subsequent decision by such governing body to authorize dissolution.

In order to be considered by the local municipal governing body, a petition to dissolve a BID shall contain the signatures of the owners of at least fifty-one percent of the assessed valuation within the district or at least fifty-one percent of the real property owners within the district.

The local municipal governing body shall hold a public hearing within thirty days of receipt of a completed petition on the issue of dissolution.

Following the public hearing, the local municipal governing body may declare the BID dissolved; provided, however, that no BID shall be dissolved until it has satisfied or paid in full all of its outstanding indebtedness, obligations, and liabilities; or until funds are on deposit and available therefor; or until a repayment schedule has been formulated and municipally approved therefor. In addition, the BID shall be prohibited from incurring any new or increased financial obligations.

Any liabilities, either current or future, incurred as a result of action to accomplish the purposes of the BID improvement plan shall not be an obligation of the municipality, but said liabilities shall be paid for entirely from revenue gained from the project or facilities authorized, or from the fees on the properties in the BID.

Upon the dissolution of a BID, any remaining revenues derived from the sale of assets acquired with fees collected shall be refunded to the property owners in the BID in which fees were charged by applying the same formula used to calculate the fee in the fiscal year in which the BID is dissolved.