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City Business Improvement Districts
 
Entity Determination in Accordance with GASB Statement 14
 
Prepared by Georgia Department of Audits and Accounts
 

Entity:  City Business Improvement Districts

A City Business Improvement District should be reported as part of the primary government in the municipality's financial statements because the entity is not created legally separate and the primary government holds the entities corporate powers.

Basis for Conclusion

1.  Is the entity legally separate?
 
An organization has separate legal standing if it is created as a body corporate or a body corporate and politic, or if it otherwise possesses the corporate powers that would distinguish it as being legally separate from the primary government.  Generally, corporate powers give an organization the capacity to have a name; the right to sue and be sued in its own name without recourse to a state or local governmental unit; and the right to buy, sell, lease, and mortgage property in its own name.
 
There is nothing in the statutes [OCGA 36-34] that indicate that a city business improvement district is created as a body corporate and politic.  It is not given the corporate powers that would distinguish it as being legally separate from the primary government.

CONCLUSION: City Business Improvement Districts are not legally separate.

2. Does the primary government hold the entities corporate powers?
 
The corporate powers granted to a separate organization are enumerated in its coporate charter or in the legislation authorizing its creation.  A special-purpose government (or any other organization) that is not legally separate should be considered, for financial reporting purposes, part of the primary government that holds the corporate powers.
 
This is not explicitly defined in OCGA 36-43.  Any powers relating to city business improvement districts rests with the governing authority of the municipality [OCGA 36-43-4].

CONCLUSION: The primary government holds the corporate powers of the City Business Improvement District.

 
Based on the above conclusions, a City Business Improvement District should be included as a part of the primary governement (municipality).