California Assembly Speaker John Perez has introduced legislation to clarify requirements in forming property and business improvement districts (PBID's) in California. In the post-Redevelopment era, the PBID will become an even more important method for cities in California to eliminate blight and address local business concerns. PBID's can be a useful tool for communities to allow business and property owners to collectively focus resources on district-wide issues such as business promotion, public amenities, and enhances police services.

AB 2618 adopts the holding of the Court of Appeals decision in Dahms v. Downtown Pomona Property and Business Improvement (2009) 174 Cal. App. 4th 708. The case was argued at both the trial and appellate levels by AGC Partner Scott Nichols. Mr. Nichols was also instrumental in the assisting the City of Pomona in the formation of the Downtown Pomona Property and Business Improvement District (PBID), as well as extending the PBID for an additional 10 year term after his success in the Dahms case.

As noted by AB 2618, "The lack of legislative guidance [currently in PBID legislation] appears to have created uncertainty among various courts with regard to the determination of special benefits, which could be perceived as providing an unclear or inconsistent standard. It is of utmost importance that property-based districts created under [the PBID] act have clarity regarding restrictions on assessments they may levy and the proper determination of special benefits. Legislative clarity with regard to [the PBID] act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property-based assessments, and the manner in which special benefits should be determined.

"Of the appellate cases in which [the PBID] act has been interpreted Dahms v. Downtown Pomona Property and Business Improvement District (2009) 174 Cal. App. 4th 708, most squarely relates to property-based districts and its ruling provides clarity with regard to how special benefits are determined and assessed with regard to those districts.

"It is the intent of the Legislature that [the PBID] act should reflect the provisions of Article XIII D of the Constitution and the guidance regarding the application of those provisions set forth in Dahms v. Downtown Pomona Property and Business Improvement District (2009) 174 Cal. App. 4th 708 including the manner in which special benefits should be determined."

AGC is proud to have represented the City of Pomona in the formation and extension of the PBID and is pleased to see that Mr. Nichols' efforts in obtaining a victory for Pomona are being considered by the California Assembly.

Should you have any questions regarding the case or need assistance with PBID formation, please contact Scott Nichols at AGC's offices in the City of Industry at (562) 699-5500 or at snichols@agclawfirm.com.