SB 735

Under current law, a municipality may create a neighborhood improvement district (NID) upon being petitioned to do so by an owner of real property that is located in the proposed NID. In general, an NID is an area within a municipality consisting of parcels that are near to one another, but not necessarily contiguous, at least some of which are used for residential purposes and subject to general real estate taxes. An NID is governed by a board, whose members are elected. A municipality may adopt an initial operating plan for the NID, and the board may annually make changes to the operating plan, subject to the approval of the municipality’s governing body. Under current law, the creating municipality may impose special assessments on the property in an NID, and may appropriate other money to the NID. These funds must be placed in a segregated account and must be spent on implementing the NID’s operating plan. Generally, the NID board determine how funds are spent.

This bill allows a municipality to create an NID that also has the authority to approve a special charge against properties within the NID. The NID may be created only upon petition by all owners of real property subject to general real estate taxes in the proposed NID. In this type of NID, upon request by the NID, the municipality may impose a special charge on properties within the NID with all proceeds of the special charge to be used to fund infrastructure related to residential development within the NID. Special charges imposed under this authority may be collected in installments and may be included on property tax bills.

Under current law, with certain exceptions, an owner selling residential real property or vacant land must give a prospective buyer a form, known as a real estate condition report for residential real property and known as the vacant land disclosure report for vacant land (real estate condition report), on which the owner discloses certain conditions of, and other information about, the real property of which the owner is aware. Currently, as part of the real estate condition report, an owner must disclose whether the owner is aware of pending special assessments. Under the bill, the owner must also disclose whether the owner is aware of any NID special charges.