The new Catalan Law of urban economic promotion areas (LAPEU) allows the creation of privately managed areas in which compulsory fees may be charged to the premises included in its scope, with the possibility of a collection through a municipal levy procedure.

On January 13, 2021, Law 15/2020 of December 22, 2021, on urban economic promotion areas (hereinafter, LAPEU – Llei d’àrees de promoció econòmica urbana) came into force. According to the explanatory memorandum of the law, it is based on the example of Business Improvement Districts in countries such as Canada or Germany and aims to offer a new public-private partnership mechanism to “revitalize and revitalize areas where industrial, commercial or service activities are concentrated”.

Specifically, one of the phenomena that this law aims to put an end to is that of the so-called free riders establishments, which benefit from the promotional tasks carried out by voluntary retail associations (such as, for example, the installation of Christmas lighting by the association of retail establishments in a shopping district) but do not participate in their financing.

According to its introduction, the law is approved in accordance with the exclusive competences of Catalonia in the areas of commerce and fairs, tourism and industry, as well as the competence in the promotion of economic activity.

The law defines the urban economic promotion areas (APEU) as “continuous urban areas in which economic activities are carried out” (Article 2.1) and also as ” previously delimited geographical areas of one or more municipalities”, which are made up of “premises”, according to the definition of the law itself. According to Article 5.2 of the Law, a premises is “the part of a building, or the entire building, with direct access from the public street, in which an economic business activity is held, or in which it is likely to be held”, as well as the “unbuilt plot of land with the capacity to admit a building in which any type of economic business activity can be carried out”.

The delimitation of an APEU shall be carried out following an administrative procedure administered by the corresponding town council. The initiative to promote it is not only attributed to the municipality itself (Article 5.1.c) but is also conferred to individuals. Specifically, “any territorial business association in the area” of the future APEU that proves that it has been active in the area for a minimum uninterrupted period of five years (Article 5.1.b) or a quorum of 25% of the holders of the right of possession of the premises included in the APEU project, which in turn represent 25% of the votes calculated in accordance with the calculation of the law itself (Article 5.1.a).

The creation of an APEU requires the prior incorporation of a “managing entity” for the area, of a private nature, “not for profit and with its own legal personality” (Article 3), which has certain similarities with figures existing in other areas, such as the compensation boards (juntes de compensació) regulated in the urban development legislation. The managing entity of the APEU is constituted by the holders of the rights of possession of the premises included in the APEU that adhere to it and, once the APEU has been delimited, must sign an agreement with the city council for a maximum period of five years (article 12.2h) and carry out all the functions provided for in the LAPEU, which essentially correspond to activities of promotion and support of the economic activity carried out within the APEU (article 4).

The most important innovation of the law is that an APEU will be financed, among other resources, with “the economic contributions or fees that are compulsorily established”, which will have the status of “non-tax public economic payment” (prestació de caràcter públic no tributari) in accordance with tax legislation (sections 3 and 4 of article 2 LAPEU). The obligation to pay the fee will not arise from the delimitation of the APEU itself but from the corresponding municipal tax ordinance. In the event that there is no such tax ordinance, the initial approval of the delimitation of an APEU will entail the initiation of the procedure for approval or modification of the tax ordinance on the APEU fee (article 10.1.b LAPEU).

Consistent with the nature of the public ecoomic payment  (prestació de caràcter públic), the law does not provide that non-adherence to the managing entity implies exemption from the fee, and, although the collection of the mandatory fees corresponds to the managing entity of the APEU, in the event of non-payment, the Town Council may be requested to initiate the collection procedure by means of a levy (Article 26.6).

On January 13, 2021, Law 15/2020 of December 22, 2021, on urban economic promotion areas (hereinafter, LAPEU – Llei d’àrees de promoció econòmica urbana) came into force. According to the explanatory memorandum of the law, it is based on the example of Business Improvement Districts in countries such as Canada or Germany and aims to offer a new public-private partnership mechanism to “revitalize and revitalize areas where industrial, commercial or service activities are concentrated”.

Specifically, one of the phenomena that this law aims to put an end to is that of the so-called free riders establishments, which benefit from the promotional tasks carried out by voluntary retail associations (such as, for example, the installation of Christmas lighting by the association of retail establishments in a shopping district) but do not participate in their financing.

According to its introduction, the law is approved in accordance with the exclusive competences of Catalonia in the areas of commerce and fairs, tourism and industry, as well as the competence in the promotion of economic activity.

The law defines the urban economic promotion areas (APEU) as “continuous urban areas in which economic activities are carried out” (Article 2.1) and also as ” previously delimited geographical areas of one or more municipalities”, which are made up of “premises”, according to the definition of the law itself. According to Article 5.2 of the Law, a premises is “the part of a building, or the entire building, with direct access from the public street, in which an economic business activity is held, or in which it is likely to be held”, as well as the “unbuilt plot of land with the capacity to admit a building in which any type of economic business activity can be carried out”.

The delimitation of an APEU shall be carried out following an administrative procedure administered by the corresponding town council. The initiative to promote it is not only attributed to the municipality itself (Article 5.1.c) but is also conferred to individuals. Specifically, “any territorial business association in the area” of the future APEU that proves that it has been active in the area for a minimum uninterrupted period of five years (Article 5.1.b) or a quorum of 25% of the holders of the right of possession of the premises included in the APEU project, which in turn represent 25% of the votes calculated in accordance with the calculation of the law itself (Article 5.1.a).

The creation of an APEU requires the prior incorporation of a “managing entity” for the area, of a private nature, “not for profit and with its own legal personality” (Article 3), which has certain similarities with figures existing in other areas, such as the compensation boards (juntes de compensació) regulated in the urban development legislation. The managing entity of the APEU is constituted by the holders of the rights of possession of the premises included in the APEU that adhere to it and, once the APEU has been delimited, must sign an agreement with the city council for a maximum period of five years (article 12.2h) and carry out all the functions provided for in the LAPEU, which essentially correspond to activities of promotion and support of the economic activity carried out within the APEU (article 4).

The most important innovation of the law is that an APEU will be financed, among other resources, with “the economic contributions or fees that are compulsorily established”, which will have the status of “non-tax public economic payment” (prestació de caràcter públic no tributari) in accordance with tax legislation (sections 3 and 4 of article 2 LAPEU). The obligation to pay the fee will not arise from the delimitation of the APEU itself but from the corresponding municipal tax ordinance. In the event that there is no such tax ordinance, the initial approval of the delimitation of an APEU will entail the initiation of the procedure for approval or modification of the tax ordinance on the APEU fee (article 10.1.b LAPEU).

Consistent with the nature of the public ecoomic payment  (prestació de caràcter públic), the law does not provide that non-adherence to the managing entity implies exemption from the fee, and, although the collection of the mandatory fees corresponds to the managing entity of the APEU, in the event of non-payment, the Town Council may be requested to initiate the collection procedure by means of a levy (Article 26.6).

Finally, it should be noted that, in its Title II, the law contains a specific regulation of the APEU “in the economic activity estates”, which are defined as areas on urban land larger than 0.5 hectares “in which the urban planning establishes industrial use or logistic use as predominant” (Article 31.a).

Dr. Pol Fontboté Pradilla

Pareja i Associats, Advocats

Llei 15-2020, del 22 de desembre, de les àrees de promoció econòmica urbana