Municipal Business Improvement Districts

Del. Code tit. 22, ch. 15

in effect

Del. Code tit. 22, § 1501 Findings and declaration of policy.

The General Assembly hereby finds and declares that: (1) Preserving and enhancing commercial enterprise in the traditional business centers of the cities and towns of Delaware are critical to the long-term financial well-being of the State; (2) The availability of enhanced municipal services within Delaware’s urban commercial centers, which result in significantly improved street and sidewalk sanitation, facilities and infrastructure maintenance and public security, serve as a magnet to the consuming public; (3) Numerous cities and towns throughout the United States, including Philadelphia, Baltimore, Buffalo and Allentown, have successfully funded and witnessed the benefit of such enhancements through the creation of business improvement districts as authorized by State legislative enactment; (4) The cost of the enhanced municipal services provided for within a business improvement district is funded exclusively by the principal beneficiaries thereof, the commercial enterprises within each such district, thereby avoiding further demand on the strained public treasury.

Del. Code tit. 22, § 1502 Definitions.

(a) “Assessable property” means all property owned or used by a commercial enterprise which is located within a business improvement district (whether or not it is subject to a real property tax abatement) and which is not part of a class of property which is exempted from assessment pursuant to § 1503(a) of this title. (b) “Assessment base” means any tax or license fee lawfully imposed by a municipality relating to real property or the operation of a commercial enterprise. (c) “Assessment zone” means an area of a business improvement district designated by the municipality to fund a certain percentage of the district’s annual budget within which the assessment rate is uniform. (d) “Authority” means a body politic or corporate exercising public powers of the State as an agency thereof in accordance with the provisions of this chapter and the ordinance creating such authority. (e) “Business improvement district” or “district” means an area of a city designated for the provision of services by an authority or management company as defined by an ordinance adopted by the city in accordance with this chapter. (f) “City” or “municipality” means any incorporated municipality or town. (g) “Management company” means an authority which in accordance with the express terms of the ordinance creating it is duly incorporated under the not-for-profit incorporation provisions of the Delaware General Incorporation Law [Chapter 1 of Title 8]. (h) “Services” means those functions undertaken directly or indirectly by an authority or management company for the benefit and advantage of the business improvement district.

Del. Code tit. 22, § 1503 Establishment.

(a) The Mayor and Council or other governing body of any municipality of this State may create 1 or more business improvement districts comprising all or any portions of any area within such municipality which is either zoned for commercial use or predominantly used for commercial purposes. Such ordinance shall include the following: (1) A description of the geographic boundaries of such district, including the geographic boundaries of any assessment zones within the district; (2) A description of the authority or management company which will govern such district, which authority or management company shall be comprised of not less than 5 members or directors respectively who either own a commercial property within such district, or are the designee of such owner; (3) A general description of the services and/or improvements which the district shall be authorized to provide; (4) The specific assessment base through which the annual budget of the district shall be funded; (5) If the district is divided into assessment zones, the percentage of the district’s annual budget which each zone shall fund; (6) Any limitations on the special assignment or borrowing authority of the district; (7) The duration of the existence of the district, which shall not exceed 30 years; (8) The properties to be exempted from the district; provided, that all residential properties having not more than 4 rental units shall be exempt, and provided further, that the municipality may specifically exempt all properties owned by organizations exempt from the municipality’s real property tax; and (9) The method, manner and frequency of reports which each such district must file with the municipality with respect to its affairs. (b) The ordinance required by this section shall, in addition to any other applicable public notice procedures, be advertised in a periodical which is generally circulated within the area designated as the district not less than 10 days prior to its introduction. Such ordinance shall, unless the ordinance shall otherwise expressly provide, be effective 30 days after the date of its enactment.

Del. Code tit. 22, § 1504 Creation and powers of the authority or management company.

(a) The authority or management company authorized by ordinance to govern a district shall be created by the filing of a certificate of authority or incorporation with the Secretary of State, which certificate shall include: (1) Citation to the ordinance authorizing its creation; (2) The names and business addresses of those nominated and approved as the initial members or directors of the authority or management company; (3) The term of existence of the authority or management company; (4) Any express terms or conditions proposed by the enabling ordinance regarding the powers, duties or restrictions imposed upon the authority or management company. (b) Except as restricted by this chapter or the ordinance creating it, an authority or management company shall have, by way of example not limitation, the power: (1) To acquire, hold and use property necessary to achieve its purposes; (2) To make contracts; (3) To sue and be sued; (4) To incur debt, and pledge or hypothecate its assets in security thereof; (5) To propose an annual budget, and to calculate and assess against all assessable properties within the district, through the assessment base selected by the municipality, such amount as is necessary to fund such budget; (6) To adopt by-laws for its governance; (7) To indemnify its members, officers and employees to the full extent authorized by the General Corporation Law [Chapter 1 of Title 8]; and (8) To otherwise exercise all necessary powers with respect to the conduct of the functions of a business improvement district.

Del. Code tit. 22, § 1505 Method of assessment.

(a) The authority or management company shall assess each assessable property within the district by multiplying the total service and improvement cost as reflected in the adopted budget for each year (less any allocated surplus or estimated revenue from other sources) by the ratio of the amount of such assessable property’s assessment base to the total amount of the assessment base for all assessable properties in the district or, if the district is divided into assessment zones, in the respective assessment zone; provided, that in all cases the assessment base shall be the one designated in the enabling ordinance by the municipality to fund the district; and provided further, that notwithstanding the above, the authority or management company shall have the power to impose an assessment of a minimum amount; and provided further, that notwithstanding the above, the authority or management company may impose a lower rate or minimum amount of assessment on properties owned by organizations exempt from the municipality’s real property tax if the municipality has chosen not to exempt such properties from the district. (b) The authority or management company may by resolution authorize the payment of such assessment in annual, or more frequent, equal installments, over such time and bearing interest at such rate as may be specified in such resolution. (c) All assessments imposed by an authority shall constitute a lien on each property so assessed, the nonpayment of which shall be collectable in the same manner as the collection of a property tax delinquency by the municipality in which the district lies. No action taken to enforce a claim by the authority or management company for any annual payment or installment payment shall affect the status of any subsequent installment of the same or the next assessment, each of which shall constitute a lien upon the property.

Del. Code tit. 22, § 1506 Prohibitions.

(a) No authority or management company shall issue bonds or other forms of securities; nor shall any authority or management company pledge the full faith and credit of the municipality in which its district lies for the payment of its debts, or of the State. (b) No authority or management company shall undertake or make any assessment in support of the provision of a service which is presently offered by the municipality in which the district lies. (c) No authority or management company may make any assessment for the provision of any service which is not for the direct benefit and advantage of the business improvement district.

Del. Code tit. 22, § 1507 Annual review by municipality.

Not less frequently than annually, the municipality shall review the performance of each authority or management company created by such municipality and shall prepare for public inspection a report which certifies that: (1) The authority or management company is in compliance with its enabling ordinance, its certificate of incorporation and by-laws and the provisions of this chapter; (2) The authority or management company is fiscally sound; and (3) The authority or management company has not discriminated against any person based upon race, sex, national origin, religion, age or disability.

Source: DE Code (Official Site)URL: https://delcode.delaware.gov/title22/c015/index.htmlFetched: 6/28/2026