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HB501 ENROLLED
Page 0
HB501
84695F2-2
By Representative Bracy (N & P)
RFD: Mobile County Legislation
First Read: 24-Feb-26
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First Read: 24-Feb-26
Enrolled, An Act,
Relating to the City of Prichard; to establish a
procedure for the establishment, operation, modification,
renewal, and dissolution of self-help business improvement
districts.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. For purposes of this act, the following
terms have the following meanings:
(1) AUTHORIZING ORDINANCE. An ordinance adopted by the
Prichard City Council that authorizes the formation or renewal
of a district and the levying of benefit assessments.
(2) BENEFIT ASSESSMENT. A levy for the purpose of
funding activities and improvements that will provide benefits
to businesses located within a district.
(3) BUSINESS. Any business establishment of the types
or classes that are described in the district plan and the
authorizing ordinance.
(4) BUSINESS OWNER. A person recognized by the city as
the owner of the business.
(5) BUSINESS OWNERS' ASSOCIATION. A new or existing
nonprofit corporation, entity, agency, or public corporation
that is under contract with the city to administer the
district and implement activities and improvements specified
in the district plan.
(6) CITY. The City of Prichard.
(7) CITY COUNCIL. The City Council of the City of
Prichard.
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Prichard.
(8) DISTRICT. A self-help business improvement district
established pursuant to this act.
(9) DISTRICT PLAN. A plan as prescribed in Section 4.
(10) IMPROVEMENT. An acquisition, construction,
installation, or maintenance relating to tangible property
that is designed to provide benefits to assessed businesses.
Section 2. The city council may create and maintain
districts within its corporate limits pursuant to this act.
Section 3. (a) Upon receipt of a written petition
signed by 60 percent or more of the business owners or
authorized representatives of the businesses proposed to be
subject to the benefit assessment, the city council may
initiate proceedings to form a district by adopting a
resolution expressing its intention to form a district.
(1) Wherever this act requires the signature of the
business owner, the signature of the authorized representative
of the business shall suffice.
(2) The city has no obligation to obtain other
information as to the ownership of a business, and its
determination of ownership as reflected in its records shall
be conclusive for the purposes of this act in the absence of
contrary documentation provided by the owner or authorized
representative of the business.
(b) The petition of business owners required under
subsection (a) shall include a summary of a district plan
formulated pursuant to Section 4. The summary shall include
all of the following:
(1) A map showing the boundaries of the district.
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(1) A map showing the boundaries of the district.
(2) The types or classes of businesses that will be
subject to the benefit assessment.
(3) The benefit assessment rate for each type or class
of business that will be subject to the benefit assessment. If
the assessment is based on a percentage of gross business
revenue, the rate may not be greater than four percent.
(4) Information specifying where the complete district
plan may be obtained.
(5) Information specifying that the complete district
plan shall be furnished upon request.
(c) The resolution of intention described in subsection
(a) shall contain all of the following:
(1) A brief description of the proposed activities and
improvements.
(2) The estimated amount of the proposed benefit
assessment. If the assessment is based on a percentage of
gross business revenue, the rate may not be greater than four
percent.
(3) A statement describing the businesses within the
proposed district which will be subject to the benefit
assessment.
(4) A description of the boundaries of the proposed
district, which may be made by reference to any plan or map
that is on file with the city council.
(5) A time and place for a public hearing on the
establishment of the district and the levy of the benefit
assessment.
(d) The descriptions and statements required by
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(d) The descriptions and statements required by
subdivisions (c)(1) through (4) shall be sufficient if they
enable a business owner to generally identify the nature and
extent of the activities and improvements and the location and
extent of the proposed district.
Section 4. A tourism improvement district plan shall
include, but not be limited to, all of the following:
(1) A map that identifies the district boundaries in
sufficient detail to allow a business owner to reasonably
determine whether a business is located within the district
boundaries. The boundaries of a district may overlap with
other districts established pursuant to this act.
(2) The name of the proposed district.
(3)a. The name of the business owners' association.
b. In the case of a newly formed nonprofit corporation
designated as the business owners' association, the
certificate of incorporation or by-laws shall provide that a
majority of the business owners' association's governing board
shall be business owners, or their authorized representatives,
who pay the district benefit assessment.
c. Where an existing nonprofit corporation is
designated as the business owners' association, the nonprofit
corporation shall create a committee, with a majority of
members being business owners, or their authorized
representatives, who pay the district benefit assessment, and
who shall be charged with managing the funds raised by the
district and fulfilling the obligations of the district plan.
d. A business owners' association shall have full
discretion to select the specific activities and improvements
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discretion to select the specific activities and improvements
within the authorized parameters of the district plan which
shall be funded with district benefit assessment revenue,
provided that there is a rational relationship between the
benefit of the activities and improvements to each business
and the assessment amount levied on the business.
(4) The activities and improvements proposed for each
year of operation of the district and the estimated cost of
those activities and improvements. Improvements shall have an
estimated useful life of five years or more. If the activities
and improvements proposed for each year of operation are the
same, the plan shall include a description of the first year's
proposed activities and improvements and a statement that the
same activities and improvements are proposed for subsequent
years.
(5) The estimated annual amount proposed to be expended
for activities and improvements during each year of operation
of the district. This amount may be estimated based upon the
assessment rate. If the estimated annual amount proposed to be
expended in each year of operation of the district is not
significantly different from year to year, the amount proposed
to be expended in the initial year and a statement that a
similar amount applies to subsequent years shall satisfy the
requirements of this subdivision.
(6) The source or sources of financing, including the
proposed method and basis of levying the assessment, in
sufficient detail to allow each business owner to calculate
the amount of the assessment to be levied against his or her
business. The assessment may be based on a percent of gross
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business. The assessment may be based on a percent of gross
business revenue, a fixed dollar amount per transaction, or
any other reasonable method approved by the city. If the
assessment is based on a percent of gross business revenue,
then the rate may not be greater than four percent. The
district plan may set forth increases in assessments for any
year of operation of the district, except that any assessment
based on a percent of gross business revenue may not exceed
four percent.
(7) The time and manner of collecting the benefit
assessments and any interest or penalties for nonpayment.
(8) The specific number of years, not to exceed 10,
during which benefit assessments will be levied, except that a
district that finances improvements with bonds may levy
assessments during the time to maturity of the bonds if that
period exceeds 10 years.
(9) Any proposed rules to be applicable to the
district.
(10) A definition describing the type or class of
businesses to be included in the district and subject to the
district benefit assessment.
(11) Any other item or matter required to be
incorporated in the plan by the city council.
Section 5. (a) If the city council has adopted a
resolution of intention to establish or renew a district and
levy a new or increased district benefit assessment, the city
council shall hold a public hearing on the establishment or
renewal of the district prior to adoption of the authorizing
ordinance. Notice of the public hearing shall be mailed to the
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ordinance. Notice of the public hearing shall be mailed to the
owners of the businesses proposed to be subject to the benefit
assessment.
(b) The city council shall provide at least 30 days'
written notice of the public hearing at which the city council
proposes to establish or renew the district and levy the
benefit assessment.
Section 6. At the conclusion of the public hearing to
establish or renew a district, the city council may adopt,
revise, change, reduce, or modify the proposed district
benefit assessment, the boundaries of the district, or the
types or classes of businesses within the district which would
be subject to the benefit assessment. Proposed benefit
assessments may only be revised by reducing them, either
independently or together in a uniform manner. The proposed
district boundary may only be revised to exclude territory
that will not benefit from the proposed activities and
improvements. The types or classes of businesses that will be
subject to the proposed benefit assessment may only be revised
to exclude the business types or classes that will not benefit
from the proposed activities and improvements. Any
modifications, revisions, reductions, or changes to the
proposed district plan shall be reflected in the district plan
prior to the city council's adoption of the ordinance creating
or renewing the district.
Section 7. (a) If the city council, following the
public hearing, decides to establish or renew a proposed
district, the city council shall adopt an authorizing
ordinance that shall include, but not be limited to, all of
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ordinance that shall include, but not be limited to, all of
the following:
(1) A brief description of the proposed activities and
improvements.
(2) The amount of the proposed benefit assessment. If
the assessment is based on a percent of gross business
revenue, the rate may not be greater than four percent.
(3) A statement as to the types or classes of
businesses that will be subject to the benefit assessment,
with the time and manner of the collection of the annual
assessment by the city council.
(4) A description of the boundaries of the district,
which may be made by reference to any plan or map that is on
file with the city council.
(5) The number, date of adoption, and title of the
resolution of intention.
(6) The time and place where the public hearing was
held concerning the establishment or renewal of the district.
(7) The number of protests that were received.
(8) A statement that the businesses in the district
established by the ordinance shall be subject to any
amendments to this act.
(9) A statement that the activities and improvements to
be conferred on businesses in the district will be funded by
the proceeds of the benefit assessment.
(10) A statement that the revenue from the benefit
assessment collected in the district shall not be used for any
purpose other than the purposes specified in the district
plan.
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plan.
(b) The descriptions and statements required by
subdivisions (a)(1) through (4) need not be detailed and shall
be considered sufficient if they enable an owner to generally
identify the nature and extent of the activities and
improvements and the location and extent of the district.
(c) The adoption of the authorizing ordinance shall
authorize the levy of benefit assessments in each of the years
referred to in the district plan.
(d) The city council shall enter into a contract with a
business owners' association to carry out the purposes of the
district.
(e)(1) The authorizing ordinance shall take effect 30
days after passage unless written protests are received from
more than 50 percent of business owners or their authorized
representatives.
(2) Any business owner that will be subject to the
proposed benefit assessment may make a protest of the
establishment or renewal of a district during the 30-day
period after the ordinance is passed and before the ordinance
is effective. Every protest shall be in writing and shall be
filed with the city council.
(3) The protest shall be in writing, shall be filed
with the city council, shall clearly identify the business
owned by the individual who filed the protest, and if the
individual is not shown in the city records as the owner of
the business, shall include documentation that the individual
is the owner of the business or the authorized representative.
(4) A written protest that does not comply with this
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(4) A written protest that does not comply with this
subsection shall not be counted in determining a majority
protest, but the city council may waive any irregularity in
the form or content of any written protest.
(5) A written protest may be withdrawn in writing at
any time before the ordinance's effective date.
(6) If written protests are received from more than 50
percent of business owners or their authorized
representatives, and protests are not withdrawn so as to
reduce the protests to 50 percent or less before the
ordinance's effective date, the ordinance establishing or
renewing the district will not go into effect and the city
shall not levy the assessment.
Section 8. If a district expires due to the time limit
set pursuant to Section 4(8), a new district plan may be
established or the expiring district may be renewed pursuant
to this act.
Section 9. (a) The collection of the benefit
assessments levied pursuant to this act shall be made at the
time and in the manner set forth by the city council in the
authorizing ordinance. All delinquent payments for benefit
assessments levied pursuant to this act may be charged
interest and penalties. A percentage of the benefit
assessments will be retained by the city council to offset the
cost of collection as set forth in the authorizing ordinance.
(b) Any delinquent payments for benefit assessments,
along with any interest or penalties, shall constitute a debt
owed to the city council and may be collectable by the city
council as a debt under law.
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council as a debt under law.
(c) Any delinquent payments for benefit assessments,
interest, or penalties recovered under this section shall be
expended in the same manner as provided in the authorizing
ordinance for proceeds of the benefit assessment.
Section 10. Bonds may be issued by the city or the
business owners' association to pay for improvements in the
district, provided that any bond issue is not included in the
city's indebtedness for the purpose of Section 225 of the
Constitution of Alabama of 2022, and otherwise complies with
any applicable provision imposed by law. Benefit assessments
levied in two or more districts may be pledged to secure a
single bond issue to finance district improvements.
Section 11. (a) The business owners' association, at
any time, may request that the city council modify the
district plan. Any modification of the district plan shall be
made pursuant to this act. The district plan shall not be
modified, including the levy of a new or increased benefit
assessment, the expansion of the district boundaries, or
expansion of the types or classes of business subject to the
benefit assessment, except by the request of the business
owners' association.
(b) Upon the written request of the business owners'
association, the city council may modify the district plan by
adopting a resolution determining to make the modifications
after conducting one public hearing on the proposed
modifications. If the modification includes the levy of a new
or increased benefit assessment, expansion of the district's
boundaries, or expansion of the types or classes of business
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boundaries, or expansion of the types or classes of business
subject to the benefit assessment, the city council shall
comply with the procedures required by Sections 5 and 6 and
the majority protest procedure provided by Section 7(e).
Notice of all other public hearings pursuant to this section
shall comply with both of the following:
(1) The resolution of intention to modify shall be
published once at least seven days before the public hearing
in a newspaper of general circulation in the city.
(2) A complete copy of the resolution of intention to
modify shall be mailed by first class mail, at least 10 days
before the public hearing, to each business owner affected by
the proposed modification.
(c) The city council, prior to the public hearing
required by this section, shall adopt a resolution of
intention to modify. The resolution shall state the proposed
modification. The public hearing shall be held not more than
45 days after the adoption of the resolution of intention to
modify.
Section 12. (a) The business owners' association shall
prepare a prospective report for each fiscal year, except the
first year, for which benefit assessments are to be levied and
collected to pay the costs of the activities described in the
report. The owners' association's first report shall be due 90
days after the first year of operation of the district.
(b) The report shall be filed with the city council and
shall refer to the district by name, specify the fiscal year
to which the report applies, and, with respect to that fiscal
year, shall contain all of the following information:
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year, shall contain all of the following information:
(1) The activities and improvements to be provided for
that fiscal year.
(2) An estimate of the cost of providing the activities
and improvements for that fiscal year.
(3) The estimated amount of any surplus or deficit
revenues to be carried over from a previous fiscal year.
(c) The city council may approve the report as filed by
the business owners' association or may make recommendations
for approval to the annual report within 45 days of receiving
the annual report. The annual report shall be final and
approved within 90 days following its submission by the
business owners' association to the city council.
(d) Within 90 days after the close of the business
owners' association's fiscal year, the business owners'
association shall have an annual audit of its books, accounts,
and financial transactions made by a certified public
accountant. The business owners' association's annual audit
shall be completed and filed with the city council within 120
days after the close of the business owners' association's
fiscal year.
Section 13. (a) Any district previously established
whose term has expired, or shall expire, may be renewed by
following the procedures for establishment as provided in this
act.
(b) Upon renewal, any remaining revenues derived from
the benefit assessment, or any revenues derived from the sale
of assets acquired with the revenues, shall be transferred to
the renewed district.
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the renewed district.
(c) There is no requirement that the boundaries,
benefit assessment, activities, or improvements of a renewed
district be the same as the original or prior district.
Section 14. (a) A district established or renewed
pursuant to this act may be dissolved by adoption of an
ordinance by the city council after public notice and hearing
required by this section when there is no indebtedness,
outstanding and unpaid, incurred to accomplish any of the
purposes of the district.
(b) During each year of operation of the district,
there shall be a 30-day period in which businesses subject to
the benefit assessment may request dissolution of the
district. The first period shall begin two years after the
date of establishment of the district and shall continue for
30 days. Each successive year of operation of the district
shall have such a 30-day period. Upon the written petition of
60 percent or more of business owners or their authorized
representatives, the city council shall pass a resolution of
intention to dissolve the district. The city council shall
give public notice of any hearing on dissolution.
(c) The city council, prior to the public hearing
required by this section, shall adopt a resolution of
intention to dissolve the district. The resolution shall state
the reason for the potential dissolution, shall state the time
and place of the public hearing, and shall contain a proposal
to dispose of any assets acquired with the revenues of the
assessments levied within the district. The notice of the
hearing on dissolution required by this section shall be given
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hearing on dissolution required by this section shall be given
by mail to the owner of each business subject to benefit
assessments in the district. The city council shall conduct
the public hearing not less than 30 days after mailing the
notice to the business owners. The public hearing shall be
held not more than 60 days after the adoption of the
resolution of intention. At the conclusion of the public
hearing, the city council may adopt an ordinance dissolving
the district.
Section 15. Upon the dissolution or expiration without
renewal of a district, any remaining revenues, after all
outstanding debts are paid, derived from the levy of benefit
assessments or derived from the sale of assets acquired with
the revenues, shall be spent in accordance with the district
plan or shall be refunded to the owners of the businesses then
located and operating within the district in which benefit
assessments were levied by applying the same method and basis
that was used to calculate the benefit assessments levied in
the fiscal year in which the district is dissolved or expires.
Section 16. This act shall become effective
immediately.
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immediately.
________________________________________________
Speaker of the House of Representatives
________________________________________________
President and Presiding Officer of the Senate
House of Representatives
I hereby certify that the within Act originated in and
was passed by the House 31-Mar-26.
John Treadwell
Clerk
Senate 02-Apr-26 Passed
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