Business Improvement Districts (BIDs) are a type of assessment district in which business owners choose to be assessed a fee, which is collected on their behalf by the city, for use in promoting and improving the business area. In California , BIDs date back to 1965 with the approval of Assembly Bill 103 - the "Parking and Business Improvement Area Law." Today there are approximately 200 BIDs in the state.

A BID provides a business area with the resources to develop marketing campaigns, increase awareness and lobbying efforts, secure additional funding and enhance public improvement and beautification projects in partnership with the city. An organized change and increase support for businesses in the area. in San Diego, BIDs work closely with elected officials and city staff to voice collective concerns, monitor business regulations and obtain funding and support for their business developement projects.

The BIDs have developed a variety of successful marketing activities that generate business for the districts. These activities range from special events such as restaurant tours, block parties, weekly farmers markets and holiday festivals to developing public relations and marketing materials. BIDs use the internet, develop coupon books, coordinate cooperative advertising campaigns and develop and distribute district brochures. BIDs also coordinate some of San Diego's most popular , large-scale street festivals, including Adam's Avenue Street Fair, Gaslamp's Mardi Gras and Hillcrest's City Fest. BIDs also market the districts to potential businesses and strengthen the BID. All of these activities help to further market the district to customers.

These fees help to fund BID board-approved business-related activities and improvements which will benefit the business. Activities,programs and improvements range from farmers' markets to business promotions to installing street lighting and removing graffiti. By pooling private resources, business owners in BIDs collectively pay for activities which they could not afford on an individual basis. Further, since a BID fee is a benefit assessment and not a tax, BIDs can consistently enact programs and activities without relying on scarce public funding. BIDs are one of the most valuable and effective finance tools available to the small business community.

The city collects the fee on an annual basis. The BID assessment is included as a seperate charge on the business tax certificate bill that every business recieves. All assessment funds are returned to the BIDs through annual contract agreements. The City of San Diego does not charge BIDs for the City staff or administrative costs associated with this service.