HB318 Alabama 2023 Session

Summary

Primary Sponsor

Andy WhittRepresentative

Republican

Session

Regular Session 2023

Title

Relating to municipalities; to add a new Article 3, commencing with Section 11-54B-80 to Title 11, Chapter 54B, Code of Alabama 1975, to provide that Class 3 municipalities may establish self-help business improvement districts.

Summary

HB318 would let Class 3 municipalities in Alabama create self-help business improvement districts to boost economic growth or tourism, funded by special assessments on property owners or certain businesses, and run by a nonprofit district management corporation.

What This Bill Does

It authorizes Class 3 municipalities to establish self-help BID districts, administered by a district management corporation and funded by assessments on district members. It sets the process for creation, including plans, public hearings, and notices, and limits the district to a maximum of five years for the funded assessments. It provides governance and financial management rules for the district management corporation, requires annual budgets and audits, and allows expansion, reduction, or termination of a district with specified public processes. It also preserves municipal police powers, prohibits eminent domain for the district, and grants tax exemptions to the district management corporation.

Who It Affects

• Real property owners and, in the case of a tourism-focused district, businesses within the proposed district area, who would pay a special assessment to fund supplemental services and could benefit from improved economic activity or tourism.
• Class 3 municipalities and the designated district management corporation, which would gain authority to create, govern, administer, contract for services, and manage funds for self-help districts, with public reporting and nonprofit tax exemptions.

Key Provisions

• Authorizes Class 3 municipalities to create self-help business improvement districts to promote economic growth or tourism.
• Districts are administered by a nonprofit district management corporation and funded by special assessments on real property owners or businesses within the district.
• Defines key terms: AREA, DISTRICT MANAGEMENT CORPORATION, DISTRICT MEMBER, MUNICIPALITY, OWNER OF REAL PROPERTY, and SELF-HELP BUSINESS IMPROVEMENT DISTRICT.
• Establishes the creation and maintenance of districts as the exclusive procedure for Class 3 municipalities, including requiring an ordinance, district plan, and district management corporation.
• Requires a public process with notices and hearings before creating or modifying a district, including mailed notices to district members or property/business owners and postings on public spaces and websites.
• Special assessments are collected to fund supplemental services; delinquent assessments create a lien with priority over most other liens except taxes, prior assessments, and prior mortgages.
• District management corporation must prepare an annual budget, have it approved by its board, hold public hearings for budget actions, and undergo CPA audits each year.
• Board of directors for the district management corporation must have 3-13 members, with initial terms; majority must be district members; bylaws and officers are established; municipality may attend meetings but not vote.
• Expansion, reduction, or termination of a district follows specified steps, including signatures, notices, and public hearings; termination may involve refunding or using remaining revenues per the district plan.
• The district management corporation is exempt from state corporate income tax, corporate franchise tax, and various state/local taxes.
• Municipality retains street-related police powers and rights; eminent domain is not granted to the district; contracts between the municipality and the district management corporation are allowed to provide services.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Economic Development and Tourism, provide Business Improvement Districts for Class 3 Municipalities