Dick Roche (Wicklow, Fianna Fail)

I move: "That the Bill be now read a Second Time."

As the festive season beckons, I am pleased to bring before the Dáil the Local Government (Business Improvement Districts) Bill 2006. The Bill has already been passed by Seanad Éireann having benefited from a wide-ranging and worthwhile debate on its provisions in the Seanad. The primary purpose of the Bill is to provide the legislative framework for the operation in Ireland of business improvement district schemes. It will introduce two technical amendments to the rating and valuation systems that will terminate an anomaly between these two codes and introduce more equity into the rating system.

Business improvement district schemes have been in operation for many years. A BID scheme can be described as an organisational and financing mechanism with legal backing through which businesses can develop and implement initiatives in defined areas to improve those areas for the betterment of the trading environment.

Essentially, in a BID scheme a group of businesses come together and decide first that they want enhanced services, a wider range of services, new facilities or new activities in an area. Second, these businesses decide that they are willing to pay for such services, facilities or activities. A specially established BID company is charged with responsibility for implementing the provisions of the BID scheme. The local authority plays a key role in such a company. In addition, the local authority collects the annual BID contributions that fund the scheme.

Originating in Toronto, Canada in 1971, business improvement district schemes are now in operation in many cities and towns throughout the world. It is estimated that there are more than 400 BID type schemes in operation in Canada and the United States. BID schemes are becoming increasingly popular in Europe. In the United Kingdom, for example, a legislative framework for BIDS was put in place in 2003. In so far as the UK is concerned, 42 BID ballots have taken place to date, of which 34 have been successful. The type of BIDS vary from town centre BIDS to mixed use, leisure, commercial and industrial BIDS and vary in location from Bolton to Liverpool to Swansea. In London alone, 12 BID schemes have been approved to date.

A wide range of activities can be carried out under a BID scheme, ranging from street cleaning, hospitality, promotions and special events to the provision of street furniture, signage and special lighting. A fundamental feature of the legislation is that the geographical boundary of a business improvement district and the range of services and improvements to be carried out in the district are determined by the business community. Thus, the business community, rather than central or local government, is the sponsoring party for BID schemes.

BIDS will represent a new and unique partnership arrangement between business and local government. While occasional tensions exist between local government and the business sector, important advances have been made in recent years in terms of formal partnership arrangements. A number of structures are now in place at local authority level which facilitate direct input by business into the development of policy at local level. Strategic policy committees at county and city level and municipal policy committees at town level are providing a direct channel for engagement by business in local authority areas. These changes have made a positive impact. Chambers Ireland has been very proactive in engaging with local authorities through these structures and local government has benefited greatly from this interaction. The BIDS will further enhance current partnership arrangements at local government level.

An important point I want to emphasise is that the services in a BID scheme will be additional to, not a substitute for, the services already being provided by the local council. I have included important benchmarking provisions in the Bill which will ensure that the level of services provided by a local council will be fully quantified in advance of a BID scheme being developed. These provisions will allay any concerns that local authorities might reduce the level of existing services following the introduction of a BID scheme.

In developing the provisions of the Bill, extensive consultation has been carried out with a wide range of interested parties. As key partners in BIDS, it was essential that early engagement took place with local authorities on this new and novel concept. In November 2001, my Department circulated local authorities with a draft framework for the operation of business improvement districts in Ireland. The concept of BIDS was outlined in the accompanying documentation. The observations of local authorities provided at the time were extremely useful in the further development of the framework.

There is also considerable engagement with the business community. The Dublin City Business Association in particular has been to the forefront in this regard.

I would like to set out for the House the main elements of the Bill and the principal issues associated with the development, running and financing of a scheme. Given the link between local government and BIDS, the legislative framework for BIDS will be incorporated into the Local Government Act 2001. The BID provisions are contained in section 4 of the Bill as passed by Seanad Éireann. The Bill inserts 20 new sections into the 2001 Act and these are numbered sections 129A to 129T. For ease of reference in discussing the Bill, I will refer to the new section numbers as they appear in the 2001 Act.

Section 129C provides that people wishing to undertake a business improvement district scheme must submit a proposal to the local authority for approval. The section sets out in detail the elements that must form part of a BID proposal. These include the boundary of the proposed BID area; a description of the objectives to be achieved under the scheme; a detailed description of the scheme itself specifying each project, service and work to be carried out or provided; the timeframe for operation of the scheme; details of the BID company which would be responsible for administering and managing the scheme; details of the current level of services being provided by the local authority; and details of the income and expenditure for the scheme. In addition, the proposal must include a current list of each rateable property in the proposed BID area.

In practice, the development of a proposal will require the BID proponents and the local authority to work together in a partnership approach. A key to the ultimate success of any BID proposal will be the extent to which there is meaningful engagement with the public and business community in an area. The Bill sets out a framework for such comprehensive consultation. In the first instance, a BID proposal submitted to a local authority must be made available for public inspection under section 129D. In response to an Opposition amendment on Committee Stage in the Seanad, I brought forward an amendment which provides that a BID proposal may be made available on the Internet.

Following publication of a BID proposal, the local authority must, by way of public notice, invite submissions from the public on the proposal. Following consideration of the submissions received, if the local authority is of the opinion that the BID proposal may be inconsistent with the interests of the local community, it must notify the BID proponents of the nature of the inconsistency. Where the local authority notifies the BID proponents that there may be inconsistency with local community interests, this would represent a clear signal that the BID proposal needs to be reviewed. Where any BID proposal is withdrawn or deemed to be withdrawn under section 129F, the BID proponents will be liable for all costs incurred by the local authority regarding the proposal.

Section 129G provides for the holding of a plebiscite to determine the level of support among ratepayers in the area. The financing of a BID scheme is a matter for the business community. It will involve the payment of an annual contribution by each business in a BID area. It is vital, therefore, that all businesses have a formal say on whether a BID proposal is to proceed. The plebiscite will be organised by the local authority. In the BID plebiscite, each business will have one vote. The vote of the corner shop is as valuable as that of the major department store. This is important because a BID scheme must have widespread and popular support. When a majority of the ratepayers who vote in the plebiscite vote in favour, the BID scheme can then be submitted for consideration by the local authority.

Section 129I provides that a BID company will be responsible for implementing and managing a BID scheme. The board of directors will be made up of businesses or their representatives and nominees of the local authority. At least two thirds of the directors must be ratepayers or ratepayer representatives. The Bill provides that where the board consists of fewer than 13 members, one will be selected by the elected council and one by the manager. Where the board consists of 13 members or more, two will be selected by the elected council and two by the manager.

I have given some thought to the balance of representation between local authority members and officials on a BID board. I believe that the equal level of representation provided for in the Bill is appropriate. Members of the councils have a clear role as policy makers and as guardians of the public interest, while the official representation is desirable in view of the high level of interaction which will take place with the BID proponents in the development and implementation of a BID scheme.

The BID company adopts a budget for the forthcoming year. The amount of the levy on any individual business is determined by the rateable valuation of that business. The local authority collects a BID contribution levy from each business in the BID area. The Bill provides for relief of 50% of the amount of the levy where a property is unoccupied. Current rating law contains similar provisions on rate refunds where a property is unoccupied. In effect, the 50% rate will apply where no income is being derived from a property and this is an equitable provision.

Two important provisions, which are not related to BIDs, deserve a mention. Section 5 provides that owners of newly erected properties will be liable to pay a levy to local authorities from the date the properties are entered on the valuation list. This ends an effective rating holiday which existed because of the inflexibility of current arrangements and increases equity in the rating system. Section 6 provides for an amendment to the Valuation Act 2001. Section 56 of that Act sought to ensure that the revaluation process, to be carried out by the Valuation Office, would not lead to disproportionate gains in rates income by local authorities in the year following a revaluation. The primary aim was to limit any negative consequences for the business community. In limiting the amount of income a local authority could raise through rates in the year following revaluation, section 56 did not provide for the rates buoyancy from new properties to accrue to local authorities. Section 6 addresses this anomaly.

I will table an amendment to the Bill on Committee Stage to provide that local authority audit committees can operate in line with best practice. I will deal with this issue in more detail on Committee Stage

The Bill provides an innovative framework for businesses and local authorities to work together for the betterment of towns and cities throughout the country. Research on the operation of BIDs in the USA has indicated that they provide a vehicle for innovative and proactive management of an area and yield significant positive impacts on the economic vitality and viability of cities and towns. All investment made through BIDs will be additional and complementary to the current level of services provided by the local authority. Investment under BIDs will leverage further investment into BIDs and surrounding areas as a consequence of the goodwill and impetus which will be generated by such schemes. There has been a broad welcome for this Bill across all sectors. I am grateful for the cross-party support for the Bill during its passage through Seanad Éireann and I look forward to similar support today.

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