HOUSE BILL No. 5868 May 19, 1998, Introduced by Reps. Bobier and Wetters and referred to the Committee on Agriculture. A bill to amend 1921 PA 207, entitled "City and village zoning act," by amending the title and sections 13, 14, 15, and 20 (MCL 125.593, 125.594, 125.595, and 125.600), the title as amended and sections 13, 14, 15, and 20 as added by 1996 PA 571, and by adding section 14a. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 TITLE 2 An act to provide for the establishment in cities and vil- 3 lages of districts or zones within which the use of land and 4 structures and the height, area, size,andlocation, LIGHT, AND 5 VENTILATION of buildings AND THE DENSITY OF POPULATION may be 6 regulated by ordinance;, and for which districts regulations7shall be established for the light and ventilation of those8buildings, and for which districts or zones the density of01343'97 TMV 2 1population may be regulated by ordinance;to designate the use 2 of certain state licensed residential facilities; to provide by 3 ordinance for the acquisition by purchase, condemnation, or oth- 4 erwise of private property that does not conform to the regula- 5 tionsand restrictionsof the various zones or districts; 6provided;to provide for the administering of this act; to pro- 7 vide for amendments, supplements, or changes in zoning ordi- 8 nances, zones, or districts; to provide for conflict with the 9 state housing code or other acts, ordinances, or regulations; to 10 provide sanctions for the violation of this act; to authorize the 11 purchase AND TRANSFER of development rights; to authorize the 12 issuance of bonds and notes; and to provide for special 13 assessments. 14 Sec. 13. (1) The legislative body of a city or village may 15 adopt a development rights ordinance limited to the establish- 16 ment, financing, and administration of a PDR program OR TDR PRO- 17 GRAM, OR BOTH, as provided under this section and sections 14 18andTO 15.TheA PDR program OR TDR PROGRAM may be used only 19 to protect agricultural land and other eligible land. This sec- 20 tion and sections 14andTO 15 do not expand the condemnation 21 authority of a city or village as otherwise provided for in this 22 act. A PDR program shall not acquire development rights by 23 condemnation. This section and sections 14andTO 15 do not 24 limit any authority that may otherwise be provided by law for a 25 city or village to protect natural resources, preserve open 26 space, provide for historic preservation, or accomplish similar 27 purposes. 01343'97 3 1 (2) A city or village shall not establish, finance, or 2 administer a PDR program OR TDR PROGRAM unless the legislative 3 body of the city or village adopts a development rights 4 ordinance. If the city or village has a zoning ordinance, the 5 development rights ordinance may be adopted as part of the zoning 6 ordinance pursuant to the procedures governing adoption of a 7 zoning ordinance set forth in this act. Whether or not the city 8 or village has a zoning ordinance, the development rights ordi- 9 nance may be adopted as a separate ordinance pursuant to the pro- 10 cedures governing ordinance adoption in general. 11 (3) The legislative body of a city or village may promote 12 and enter into agreements between counties, cities, villages, and 13 townships for the purchase AND TRANSFER of development rights, 14 including cross-jurisdictional purchase AND TRANSFER, subject to 15 applicable development rights ordinances of cities and villages 16 and similar ordinances of counties and townships. 17 Sec. 14. (1) A development rights ordinanceshallMAY 18 provide for a PDR program. Under a PDR program, the city or vil- 19 lagepurchasesMAY PURCHASE development rights, but only from a 20willinglandowner WHO IS A WILLING SELLER. A development 21 rights ordinance providing for a PDR program shall specify all of 22 the following: 23 (a) The public benefits that the city or village may seek 24 through the purchase of development rights. 25 (b) The procedure by which the city or village or a land- 26 owner may by application initiate a purchase of development 27 rights. 01343'97 4 1 (c) The development rights authorized to be purchased 2 subject to a determination under standards and procedures 3 required by subdivision (d). 4 (d) The standards and procedure to be followed by the legis- 5 lative body of the city or village for approving, modifying, or 6 rejecting an application to purchase development rights including 7 the determination of all of the following: 8 (i) Whether to purchase development rights. 9 (ii) Which development rights to purchase. 10 (iii) The intensity of development permitted after the pur- 11 chase on the land from which the development rights are 12 purchased. 13 (iv) The price at which development rights will be purchased 14 and the method of payment. 15 (v) The procedure for ensuring that the purchase or sale of 16 development rights is legally fixed so as to run with the land. 17 (e) The circumstances under which an owner of land from 18 which development rights have been purchased under a PDR program 19 may repurchase those development rights and how the proceeds of 20 the purchase are to be used by the city or village. 21 (2) If the city or village has a zoning ordinance, the pur- 22 chase of development rights shall be consistent with the plan 23 referred to in section 1 upon which the zoning ordinance is 24 based. 25 (3) Development rights acquired under a PDR program may be 26 conveyed only as provided pursuant to subsection (1)(e). 01343'97 5 1 SEC. 14A. (1) A DEVELOPMENT RIGHTS ORDINANCE MAY PROVIDE 2 FOR A TDR PROGRAM. UNDER A TDR PROGRAM, ONLY A WILLING 3 LANDOWNER'S DEVELOPMENT RIGHTS MAY BE TRANSFERRED. A DEVELOPMENT 4 RIGHTS ORDINANCE PROVIDING FOR A TDR PROGRAM SHALL SPECIFY ALL OF 5 THE FOLLOWING: 6 (A) THE PUBLIC BENEFITS THAT THE CITY OR VILLAGE MAY SEEK 7 THROUGH THE TRANSFER OF DEVELOPMENT RIGHTS, AND THE DEVELOPMENT 8 RIGHTS AUTHORIZED TO BE TRANSFERRED. 9 (B) THE PROCEDURES TO BE FOLLOWED BY THE LEGISLATIVE BODY OF 10 THE CITY OR VILLAGE FOR ESTABLISHING THE PRECISE LOCATION OF EACH 11 SENDING ZONE AND RECEIVING ZONE AND LIMITING THE DEVELOPMENT 12 RIGHTS THAT MAY BE TRANSFERRED TO EACH RECEIVING ZONE. THOSE 13 PROCEDURES SHALL ENSURE, BUT NEED NOT BE LIMITED TO, ALL OF THE 14 FOLLOWING: 15 (i) CONSIDERATION OF AN ESTIMATE OF POPULATION AND ECONOMIC 16 GROWTH DURING THE NEXT 10 YEARS IN THE CITY OR VILLAGE AND AN 17 ESTIMATE OF THE DEVELOPMENT POTENTIAL OF EACH PROPOSED SENDING 18 ZONE AND RECEIVING ZONE. 19 (ii) IF THE CITY OR VILLAGE HAS A ZONING ORDINANCE, CONSIS- 20 TENCY WITH THE PLAN REFERRED TO IN SECTION 1 UPON WHICH THE 21 ZONING ORDINANCE IS BASED. 22 (iii) CONSIDERATION OF AN ESTIMATE OF THE EXISTING AND PRO- 23 POSED INFRASTRUCTURE, INCLUDING SERVICES AND FACILITIES, OF EACH 24 PROPOSED RECEIVING ZONE. 25 (iv) THAT A RECEIVING ZONE BE ABLE TO ACCOMMODATE, IN TERMS 26 OF BOTH CAPACITY AND AVAILABILITY, THE INTENSITY OF DEVELOPMENT 01343'97 6 1 ASSOCIATED WITH DEVELOPMENT RIGHTS THAT MAY BE TRANSFERRED FROM A 2 SENDING ZONE. 3 (v) AVOIDANCE OF UNDUE BURDEN UPON THE PEOPLE AND LAND 4 WITHIN THE RECEIVING ZONE. 5 (vi) CONSISTENCY WITH THE PURPOSES OF THIS SECTION AND WITH 6 THIS ACT. 7 (vii) CONSIDERATION OF THE INTENSITY OF DEVELOPMENT OTHER- 8 WISE ALLOWED UNDER APPLICABLE ZONING, BUILDING, AND OTHER ORDI- 9 NANCES BEFORE THE ADOPTION OF TDR PROGRAM PROVISIONS IN A DEVEL- 10 OPMENT RIGHTS ORDINANCE. 11 (C) THE PROCEDURE FOR A TRANSFER OF DEVELOPMENT RIGHTS, 12 INCLUDING THE PROCEDURE BY WHICH THE CITY OR VILLAGE OR A PROP- 13 ERTY OWNER MAY BY APPLICATION INITIATE A TRANSFER OF DEVELOPMENT 14 RIGHTS. EXCEPT AS PROVIDED IN SUBDIVISION (E) AND 15 SUBSECTION (3)(B), AN APPLICATION TO TRANSFER DEVELOPMENT RIGHTS 16 SHALL INCLUDE, BUT NEED NOT BE LIMITED TO, THE IDENTITY OF THE 17 LAND WITHIN A SENDING ZONE FROM WHICH THE DEVELOPMENT RIGHTS ARE 18 PROPOSED TO BE SEVERED AND THE IDENTITY OF LAND WITHIN A RECEIV- 19 ING ZONE TO WHICH THE DEVELOPMENT RIGHTS ARE PROPOSED TO BE 20 ATTACHED. 21 (D) THE STANDARDS AND PROCEDURE TO BE FOLLOWED BY THE LEGIS- 22 LATIVE BODY OF THE CITY OR VILLAGE FOR APPROVING, MODIFYING, OR 23 REJECTING AN APPLICATION TO TRANSFER DEVELOPMENT RIGHTS, INCLUD- 24 ING THE DETERMINATION OF ALL OF THE FOLLOWING: 25 (i) WHETHER TO TRANSFER DEVELOPMENT RIGHTS. 26 (ii) WHICH DEVELOPMENT RIGHTS TO TRANSFER. 01343'97 7 1 (iii) THE INTENSITY OF DEVELOPMENT PERMITTED AFTER THE 2 TRANSFER ON THE LAND FROM WHICH THE DEVELOPMENT RIGHTS ARE 3 SEVERED AND THE INTENSITY OF DEVELOPMENT PERMITTED AFTER THE 4 TRANSFER ON THE LAND TO WHICH THE DEVELOPMENT RIGHTS ARE 5 ATTACHED. 6 (iv) THE PROCEDURE FOR ENSURING THAT THE SEVERANCE OF DEVEL- 7 OPMENT RIGHTS FROM LAND IN A SENDING ZONE AND THE ATTACHMENT OF 8 THOSE DEVELOPMENT RIGHTS TO LAND IN A RECEIVING ZONE ARE LEGALLY 9 FIXED SO AS TO RUN WITH THE LAND FROM WHICH THE DEVELOPMENT 10 RIGHTS HAVE BEEN SEVERED AND TO WHICH THE DEVELOPMENT RIGHTS HAVE 11 ATTACHED. 12 (E) THE CIRCUMSTANCES UNDER WHICH A LANDOWNER FROM WHOM 13 DEVELOPMENT RIGHTS HAVE BEEN ACQUIRED UNDER A TDR PROGRAM MAY 14 REPURCHASE THOSE DEVELOPMENT RIGHTS. 15 (2) THE INTENSITY OF DEVELOPMENT ALLOWED IN A RECEIVING ZONE 16 IF DEVELOPMENT RIGHTS ARE TRANSFERRED SHALL BE GREATER THAN THE 17 INTENSITY OF DEVELOPMENT THAT WAS ALLOWED IN THAT AREA OF LAND 18 UNDER ANY APPLICABLE ZONING ORDINANCE 1 YEAR BEFORE THE DEVELOP- 19 MENT RIGHTS ORDINANCE'S TDR PROGRAM PROVISIONS WERE ADOPTED. THE 20 INTENSITY OF DEVELOPMENT ALLOWED IN A RECEIVING ZONE IF DEVELOP- 21 MENT RIGHTS ARE NOT TRANSFERRED SHALL NOT BE LESS THAN THE INTEN- 22 SITY OF DEVELOPMENT THAT WAS ALLOWED IN THAT AREA OF LAND UNDER 23 THE APPLICABLE ZONING ORDINANCE 1 YEAR BEFORE THE DEVELOPMENT 24 RIGHTS ORDINANCE'S TDR PROGRAM PROVISIONS WERE ADOPTED. 25 (3) A CITY OR VILLAGE WITH A TDR PROGRAM MAY DO 1 OR BOTH OF 26 THE FOLLOWING: 01343'97 8 1 (A) FACILITATE TRANSFERS OF DEVELOPMENT RIGHTS DIRECTLY 2 BETWEEN WILLING LANDOWNERS AT THE PRICE AGREED UPON BY THE 3 WILLING LANDOWNERS. 4 (B) PURCHASE DEVELOPMENT RIGHTS IN A SENDING ZONE FROM A 5 LANDOWNER WHO IS A WILLING SELLER, TEMPORARILY HOLD THE DEVELOP- 6 MENT RIGHTS, AND SELL THE DEVELOPMENT RIGHTS TO A PURCHASER FOR 7 ATTACHMENT TO LAND IN A RECEIVING ZONE. THE PURCHASE AND SALE OF 8 DEVELOPMENT RIGHTS SHALL BE AT FAIR MARKET VALUE, BASED UPON A 9 BONA FIDE APPRAISAL. 10 (4) EXCEPT AS PROVIDED PURSUANT TO SUBSECTION (1)(E), DEVEL- 11 OPMENT RIGHTS ACQUIRED UNDER A TDR PROGRAM MAY BE SOLD ONLY TO A 12 LANDOWNER IN A RECEIVING ZONE FOR ATTACHMENT TO LAND IN A RECEIV- 13 ING ZONE. 14 (5) EXCEPT AS PROVIDED PURSUANT TO SUBSECTION (1)(E) OR 15 UNDER SUBSECTION (3)(B), DEVELOPMENT RIGHTS SHALL NOT BE SEVERED 16 UNLESS THE CITY OR VILLAGE HAS APPROVED THE ATTACHMENT OF THOSE 17 DEVELOPMENT RIGHTS TO LAND IN A RECEIVING ZONE. EXCEPT FOR THE 18 PERIOD DURING WHICH DEVELOPMENT RIGHTS MAY BE TEMPORARILY HELD BY 19 A CITY OR VILLAGE UNDER SUBSECTION (3)(B), THE SEVERANCE OF 20 DEVELOPMENT RIGHTS FROM LAND IN A SENDING ZONE SHALL BE SIMULTA- 21 NEOUS WITH THE ATTACHMENT OF THOSE DEVELOPMENT RIGHTS TO LAND IN 22 A RECEIVING ZONE. 23 (6) A CITY OR VILLAGE SHALL NOT APPROVE THE TRANSFER OF 24 DEVELOPMENT RIGHTS FROM OR TO LAND THAT IS SUBJECT TO THE ZONING 25 ORDINANCE OF A COUNTY, A TOWNSHIP, OR ANOTHER CITY OR VILLAGE 26 UNLESS THE CITY OR VILLAGE AND THE COUNTY, THE TOWNSHIP, OR THE 01343'97 9 1 OTHER CITY OR VILLAGE, RESPECTIVELY, HAVE ENTERED INTO AN 2 AGREEMENT UNDER SECTION 13(3). 3 (7) A LANDOWNER MAY DEVELOP LAND WITHIN A RECEIVING ZONE AT 4 THE INTENSITY OF DEVELOPMENT ALLOWED UNDER APPLICABLE ZONING, 5 BUILDING, AND OTHER ORDINANCES APART FROM THE DEVELOPMENT RIGHTS 6 ORDINANCE OR, IF DEVELOPMENT RIGHTS ARE TRANSFERRED FROM THE 7 LAND, MAY DEVELOP THE LAND AT A HIGHER INTENSITY OF DEVELOPMENT 8 AS ALLOWED UNDER THE DEVELOPMENT RIGHTS ORDINANCE. IF DEVELOP- 9 MENT RIGHTS HAVE NOT BEEN TRANSFERRED FROM LAND IN A SENDING 10 ZONE, THE LANDOWNER MAY DEVELOP LAND AT THE INTENSITY OF DEVELOP- 11 MENT ALLOWED UNDER APPLICABLE ZONING, BUILDING, AND OTHER ORDI- 12 NANCES APART FROM THE DEVELOPMENT RIGHTS ORDINANCE. 13 Sec. 15. (1) A PDR program OR, EXCEPT AS PROVIDED IN SUBDI- 14 VISION (G), A TDR PROGRAM may be financed through 1 or more of 15 the following sources: 16 (a) General appropriations by the city or village. 17 (b) Proceeds from the sale of development rights by the city 18 or village subject tosectionSECTIONS 14(3) AND 14A(4). 19 (c) Grants. 20 (d) Donations. 21 (e) Bonds or notes issued under subsections (2) to (6). 22 (f) General fund revenue. 23 (g)SpecialFOR A PDR PROGRAM ONLY, SPECIAL assessments 24 under subsection (7). 25 (h) Other sources approved by the city or village and per- 26 mitted by law. 01343'97 10 1 (2) The city or village may borrow money and issue bonds or 2 notes under the municipal finance act,Act No. 202 of the Public3Acts of 1943, being sections 131.1 to 139.3 of the Michigan4Compiled Laws1943 PA 202, MCL 131.1 TO 139.3, subject to the 5 general debt limit applicable to the city or village. The bonds 6 or notes may be revenue bonds or notes; general obligation 7 limited tax bonds or notes; subject to section 6 of article IX of 8 the state constitution of 1963, general obligation unlimited tax 9 bonds or notes; or bonds or notes to refund in advance bonds or 10 notes issued under this section. 11 (3) The legislative body of the city or village may secure 12 bonds or notes issued under this section by mortgage, assignment, 13 or pledge of property including, but not limited to, anticipated 14 tax collections, revenue sharing payments, or special assessment 15 revenues. A pledge made by the legislative body of the city or 16 village is valid and binding from the time the pledge is made. 17 The pledge IS immediatelyshall besubject to the lien of the 18 pledge without a filing or further act. The lien of the pledge 19shall beIS valid and binding as against parties having claims 20 in tort, contract, or otherwise against the city or village, 21 irrespective of whether the parties have notice of the lien. 22 Filing of the resolution, the trust agreement, or another instru- 23 ment by which a pledge is created is not required. 24 (4) Bonds or notes issued under this section are exempt from 25 all taxation in this state except inheritance and transfer taxes, 26 and the interest on the bonds or notes is exempt from all 01343'97 11 1 taxation in this state, notwithstanding that the interest may be 2 subject to federal income tax. 3 (5) The bonds and notes issued under this section may be 4 invested in by the state treasurer and all other public officers, 5 state agencies and political subdivisions, insurance companies, 6 banks, savings and loan associations, investment companies, and 7 fiduciaries and trustees, and may be deposited with and received 8 by the state treasurer and all other public officers and the 9 agencies and political subdivisions of this state for all pur- 10 poses for which the deposit of bonds or notes is authorized. The 11 authority granted by this section is in addition to all other 12 authority granted by law. 13 (6) The legislative body of the city or village may borrow 14 money and issue bonds or notes for refunding all or part of 15 existing bond or note indebtedness only if the net present value 16 of the principal and interest to be paid on the refunding bonds 17 or notes, excluding the cost of issuance, will be less than the 18 net present value of the principal and interest to be paid on the 19 bonds or notes being refunded, as calculated using a method 20 approved by the department of treasury. 21 (7) A development rights ordinance may authorize the legis- 22 lative body of the city or village to finance a PDR program by 23 special assessments. In addition to meeting the requirements of 24 section 14, the development rights ordinance shall include in the 25 procedure to approve and establish a special assessment district 26 both of the following: 01343'97 12 1 (a) The requirement that there be filed with the legislative 2 body a petition containing all of the following: 3 (i) A description of the development rights to be purchased, 4 including a legal description of the land from which the purchase 5 is to be made. 6 (ii) A description of the proposed special assessment 7 district. 8 (iii) The signatures of the owners of at least 66% of the 9 land area in the proposed special assessment district. 10 (iv) The amount and duration of the proposed special 11 assessments. 12 (b) The requirement that the legislative body specify how 13 the proposed purchase of development rights will specially bene- 14 fit the land in the proposed special assessment district. 15 Sec. 20. (1) As used in this act: 16 (a) "Agricultural land" means substantially undeveloped land 17 devoted to the production of plants and animals useful to humans, 18 including forage and sod crops; grains, feed crops, and field 19 crops; dairy and dairy products; poultry and poultry products; 20 livestock, including breeding and grazing of cattle, swine, and 21 similar animals; berries; herbs; flowers; seeds; grasses; nursery 22 stock; fruits; vegetables; Christmas trees; and other similar 23 uses and activities. 24 (b) "Development rights" means the rights to develop land to 25 the maximum intensity of development authorized by law. 01343'97 13 1 (c) "Development rights ordinance" means an ordinance, which 2 may comprise part of a zoning ordinance, adopted under 3 section 13. 4 (d) "Intensity of development" means the height, bulk, area, 5 density, setback, use, and other similar characteristics of 6 development. 7 (e) "Other eligible land" means land that has a common prop- 8 erty line with agricultural land from which development rights 9 have been purchased OR TRANSFERRED and that is not divided from 10 that agricultural land by a state or federal limited access 11 highway. 12 (f) "PDR program" means a program under section 14 for the 13 purchase of development rights by a city or village. 14 (G) "RECEIVING ZONE" MEANS AN AREA OF LAND IDENTIFIED PURSU- 15 ANT TO A DEVELOPMENT RIGHTS ORDINANCE WHERE DEVELOPMENT COULD BE 16 MORE INTENSE THAN PERMITTED BY THE DEVELOPMENT RIGHTS ATTACHED TO 17 THAT LAND WITHOUT ADVERSELY AFFECTING PUBLIC HEALTH, SAFETY, OR 18 WELFARE, AND TO WHICH DEVELOPMENT RIGHTS CAN BE TRANSFERRED FROM 19 A SENDING ZONE. 20 (H) "SENDING ZONE" MEANS AN AREA OF LAND IDENTIFIED PURSUANT 21 TO A DEVELOPMENT RIGHTS ORDINANCE WHERE DEVELOPMENT SHOULD BE 22 LESS INTENSE THAN PERMITTED BY THE DEVELOPMENT RIGHTS ATTACHED TO 23 THAT LAND TO ACHIEVE A PUBLIC BENEFIT SET FORTH IN THE DEVELOP- 24 MENT RIGHTS ORDINANCE AND FROM WHICH DEVELOPMENT RIGHTS CAN BE 25 TRANSFERRED TO A RECEIVING ZONE. 26 (I) "TDR PROGRAM" MEANS A PROGRAM UNDER SECTION 14A FOR THE 27 TRANSFER OF DEVELOPMENT RIGHTS BY SEVERING DEVELOPMENT RIGHTS 01343'97 14 1 FROM CERTAIN LAND AND ATTACHING THOSE DEVELOPMENT RIGHTS TO OTHER 2 LAND. 3 (2) This act shall be known and may be cited as the "city 4 and village zoning act". 01343'97 Final page. 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