AB 420

This bill modifies the current law requirement for the board of a business

improvement district (BID) to include an independent certified audit in its annual

report describing the current status of the BID. Under current law, based on the

receipt of a petition from certain business owners in a designated area of a city,

village, or town (municipality), a municipality may create a BID, which consists of

contiguous parcels of land. A BID is governed by a board, whose members are

appointed by the creating municipality's chief executive officer (mayor, city manager,

village president, or town board chair). The board is required to adopt an initial

operating plan for the BID, and may make changes to the operating plan each year,

subject to the approval of the municipality's governing body.

The creating municipality may impose special assessments on the property in

the BID, and may appropriate other money to the BID. All such funds must be placed

in a segregated account. Generally, the funds in the account must be spent for the

benefit of the BID to put into effect its operating plan, and to pay for certain required

audits. Generally, the board determines how such funds are spent. The creating

municipality may terminate the BID by following certain procedures that are

specified in the statutes.

The bill requires the board of a BID that had a cash balance of less than

$300,000 at all times during the prior fiscal year to include a reviewed financial

statement in its public annual report instead of an independent certified audit. If

the cash balance equaled or exceeded $300,000 at any time during the prior fiscal

year, the BID is required to include an independent certified audit in its annual

report.

Under the bill, the reviewed financial statement must be prepared in

accordance with generally accepted accounting principles and include a review of the

financial statement by an independent certified public accountant. Current law

requires a BID's board to include an independent certified audit in its mandatory

public annual report describing the current status of the BID, irrespective of the cash

balance in the BID's segregated account.