SB2324 102ND GENERAL ASSEMBLY

LRB102 17067 AWJ 22495 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2324

Introduced 2/26/2021, by Sen. Sara Feigenholtz

SYNOPSIS AS INTRODUCED:

New Act

Creates the Tourism Marketing and Recovery District Law. Provides that a governmental unit (a municipality, county, township, or any combination thereof) may, by ordinance, initiate proceedings to create a tourism marketing and recovery district that would allow a transaction charge to be imposed upon customer transactions entered into by tourism businesses in the district and such charges may be based on revenue, sales, or any other business-related factor deemed appropriate by the governing body. Provides that the transaction charge collected by the governmental unit shall be remitted to a tourism and convention bureau to be used for marketing, promotions, sales efforts, events, and other activities that are reasonably related to the enhancement of tourism. Provides for the creation of a district plan, public hearing requirements, requirements of an ordinance forming a district, annual reports, modification of a district plan, expiration and renewal, termination, and challenges to the validity of the creation of the district or transaction charges. Defines terms.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning local government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Tourism Marketing and Recovery District Law.

Section 5. Definitions. As used in this Law:

"Baseline" means to the existing level of services, or funding for services, provided by the governmental unit prior to creation of a district.

"Benefit zone" means a zone within a district established by the governing body based upon the degree of benefit derived from the services to be provided within the zone and in which a governing body may impose different transaction charges from other zones relative to the degree of benefit intended to be provided.

"Business owner" means any person recognized by the governmental unit as the owner of a tourism business subject to a transaction charge and may include an owner's authorized representative.

"Clerk" means the clerk or similar administrative personnel of the governing body.

"District" means a tourism marketing and recovery district created pursuant to this Law.

"Governing body" means the legislative body of the governmental unit.

"Governmental unit" means any municipality, county, or township, or any combination thereof.

"Improvement" means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of 5 years or more that is reasonably related to the enhancement of tourism.

"Services" means marketing, promotions, sales efforts, events, and other activities that are reasonably related to the enhancement of tourism.

"Tourism and convention bureau" means a local tourism and convention bureau that is: (i) either a unit of local government or incorporated as a nonprofit organization; (ii) operating with a paid, full-time staff whose sole purpose is to promote tourism in the designated service area; and (iii) recognized by the Department of Commerce and Economic Opportunity as a certified local tourism and convention bureau entitled to receive State tourism grant funds.

"Tourism business" means all business establishments which provide tourism or tourist-related goods or services.

"Transaction charge" means a special charge imposed upon customer transactions entered into by tourism businesses in the district and may be based on revenue, sales, or any other business-related factor deemed appropriate by the governing body, including, but not limited to, a fixed rate per occupied hotel room per night.

Section 10. Ordinance of intent to create a district.

(a) A governing body may initiate proceedings to create a district by adopting an ordinance expressing its intention to create the district. The ordinance shall include:

(1) The name of the district.

(2) The boundaries of the district, which need not be contiguous.

(3) The type or types of tourism businesses that will pay a transaction charge.

(4) The initial and maximum transaction charge rates to be paid by each category of tourism business in sufficient detail for each business owner to estimate the amount of transaction charges each tourism business would pay.

(5) If a specific term is proposed, the proposed term of the district.

(6) A brief description of the services and improvements proposed to be provided.

(7) The time and place of a public hearing on the proposed district.

(8) A statement that any tourism business proposed to be subject to a transaction charge has the opportunity to be heard at the hearing regarding the district formation and an opportunity to file objections to the district formation with the clerk at any time prior to the conclusion of the public hearing.

(b) A governmental unit may include territory or tourism businesses within the jurisdiction of another governmental unit to the extent that the governing body of the other governmental unit consents.

Section 15. District plan.

(a) A district plan shall be prepared before the public hearing on the proposed district and include the following:

(1) The estimated annual budget. The budget may include specific allocations to expedite the recovery of the tourism industry.

(2) The initial and maximum transaction charge rates to be paid by each category of tourism business in sufficient detail for each business owner to estimate the amount of transaction charges each tourism business would pay.

(3) A statement that, after the first imposition of a transaction charge within the district, the transaction charge may continue to be imposed in subsequent years without the requirement of an additional public hearing if the transaction charge rate does not exceed the rate specified in the district plan.

(4) The frequency and manner of collecting the transaction charges.

(5) The manner of contesting the calculation of any specific transaction charge by a specific tourism business.

(6) The amount or rate of penalties and interest applicable to delinquent payments, if any, and the method of collection of penalties and interest.

(7) The nature of the proposed services and improvements to be provided.

(8) The existing baseline and the baseline the governmental unit will continue to provide.

(9) A map of the district boundaries, which need not be contiguous nor include every tourism business.

(10) The specific categories of tourism businesses that will pay a transaction charge.

(11) A map showing the district boundaries and benefit zones, if any.

(12) A list of the tourism businesses to be subject to a transaction charge, including the address of each business.

(13) A statement that a tourism business may pass a transaction charge onto customers, and the specific title to be used when the transaction charge is disclosed to the customer.

(14) The name and general structure of the tourism and convention bureau.

(b) For purposes of transaction charges in a district plan, the governing body may define categories of businesses based upon the degree of benefit each will derive from the services and improvements and may impose a different transaction charge on each category relative to the degree of benefit provided as the governing body may determine.

(c) The district plan may also include a statement authorizing the issuance of bonds or other debt instruments in accordance with the provisions of general laws in the amounts and for the periods necessary to finance needed improvements within the proposed tourism and recovery district.

Section 20. Public hearing.

(a) The governing body shall hold a public hearing on the proposed district. Notice of the public hearing shall be given by the United States mails addressed to the owner of each tourism business proposed to pay a transaction charge, as shown on the governmental unit's most recent records, and shall include the ordinance regarding the governmental unit's intent to establish the district. Such notice shall be mailed not less than 30 days prior to the public hearing.

(b) At the hearing, the governing body shall consider public testimony regarding the proposed district. Any tourism business proposed to be subject to a transaction charge may submit a written objection to the clerk at any time prior to the conclusion of the public hearing. If written objections are received from tourism businesses that would pay more than 50% of the proposed transaction charges in the proposed district, no further proceedings to form the district may be undertaken by the governmental unit for a period of one year. The hearing may be adjourned to another date without further notice other than a motion to be entered upon the minutes fixing the time and place it will reconvene.

(c) At the public hearing, the governing body may remove territory or tourism businesses from the district, reduce a transaction charge rate, or make administrative clarifications to the district plan.

(d) If, at the conclusion of the public hearing, the clerk determines that all of the written objections submitted do not represent tourism businesses that would pay more than 50% of the proposed transaction charges, the governing body may adopt an ordinance forming the district.

Section 25. Formation ordinance. If written protests submitted do not represent tourism businesses that would pay more than 50% of the proposed transaction charges, the governing body may adopt an ordinance forming the district. The ordinance shall contain:

(1) A statement regarding the date of adoption of the ordinance regarding the governmental unit's intent to establish the district.

(2) A reference to the district plan, which shall be on file and available for inspection with the clerk.

(3) A determination as to the total amount of any written protests received from tourism businesses to be subject to a transaction charge.

(4) The name of the district.

(5) The effective date of the transaction charge.

(6) If a specific term is intended, the term of the district.

(7) The transaction charge rate to be paid by each type of tourism business in sufficient detail for each business owner to estimate the amount of transaction charge their business would pay.

(8) If a specific term is proposed, the proposed term of the district.

(9) The name of the tourism and convention bureau.

(10) Confirmation that no further appropriation action by the governmental unit will be necessary for the ongoing collection from tourism businesses of transaction charges and the remitting of such transaction charges for the benefit of the tourism and convention bureau throughout the term of the district.

(11) Authorization for the governmental unit to remit the collected transaction charges to the tourism and convention bureau in exchange for the tourism and convention bureau providing services.

Section 30. Business owners; tourism and convention bureaus.

(a) A governmental unit may determine if an owner is a business owner through use of the governmental unit's records, by the business owner's authorized representative, or by any other means. The governmental unit has no obligation to obtain other information as to the ownership of a tourism business and the governmental unit's determination of ownership shall be final and conclusive for purposes of this Law.

(b) An tourism and convention bureau shall not be considered a public agency or entity for any purpose.

Section 35. Annual report. Each year, the tourism and convention bureau shall submit a report of activities and expenditures to the governing body. The report shall be submitted no later than 30 days prior to the anniversary of the transaction charge start date. The report shall include:

(1) A summary of the activities provided in the current year to date.

(2) A summary of the expenditures for the current year to date.

(3) The amount of any revenue to be carried over from prior years.

(4) A list of the directors and officers of the tourism and convention bureau.

(5) A list of the accomplishments attributable to the district.

Section 40. Transaction charges; collection and remittance. Transaction charges paid by a tourism business shall be collected by the governmental unit. On a prompt basis, the collected transaction charges shall be remitted by the governmental unit to the tourism and convention bureau in accordance with the district plan and the formation ordinance. During any period that the governmental unit may hold such collected transaction charges, the governmental unit shall at all times maintain the collected transaction charges in a specially-designated fund segregated from other funds; except, for the adoption of the formation ordinance, the governmental unit may provide for the ongoing retention of an amount not to exceed 2% of the total amount of transaction charges collected to defray (in whole or in part) the governmental unit's administrative costs related to the district.

Collected transaction charges held by the governmental unit may not be commingled with other governmental unit funds.

Section 45. Modification.

(a) Upon the written request from the tourism and convention bureau, the governmental unit may notice a public hearing under Section 20 on modifications to a district for any of the following modifications:

(1) In any year other than that initial year, a transaction charge rate is proposed to exceed that described in the district plan.

(2) The boundaries of a district are changed.

(3) There is a change in designation of tourism businesses subject to the transaction charge and any tourism business pays a new or increased transaction charge.

(b) Upon the written request from the tourism and convention bureau, the governmental unit may make any modifications not described in subsection (a) after holding at least one public hearing.

(c) Any modification shall be reflected in an updated district plan to be on file and available for inspection with the clerk.

Section 50. Renewal after expiration. If a formation ordinance under Section 25 defines a term for the district and the district's term expires, the district may be renewed by creating a new district plan pursuant to Section 15 and following the procedures detailed in Sections 20, 25, and 30. Upon expiration when a district is not renewed, any funds remaining shall be used in accordance with the district plan or refunded to the tourism businesses in equal proportion to the amount of transaction charges paid by each tourism business.

Section 55. Termination.

(a) The district shall be terminated by the governing body if written objections are received from tourism businesses that, in the most recently completed fiscal year, paid (or in the case of a district that has not completed a fiscal year following the initial imposition of the transaction charges, would be expected to pay) more than 50% of the transaction charges. Written objections must be signed by the business owner and dated within 30 days after their submission to the clerk. A public hearing shall be held on the written objection within 30 days after the clerk's receipt of the written objection. Written objections may be submitted once per year in the 30 days following the anniversary of district formation.

(b) The district may be terminated by the governing body if the governing body finds that there has been a violation of law, malfeasance, or misappropriation of funds. After holding a noticed hearing, the governing body shall notify the tourism and convention bureau to remedy the findings of the governing body within 30 days. Such public hearing shall be held and notice given to the tourism businesses and the tourism and convention bureau not less than 30 days prior to the hearing.

If the tourism and convention bureau does not remedy the violations within 30 days of notification, or the governing body has not approved a plan to remedy the violation, at the conclusion of a hearing conducted under this Section, the governing body may vote to terminate the district.

(c) Upon termination, any funds remaining shall be used in accordance with the district plan or refunded to the tourism businesses in equal proportion to the amount of transaction charges paid by each tourism business.

Section 60. Contesting validity. The validity of a transaction charge imposed or a district created under this Law may not be contested in any action or proceeding unless the action or proceeding is commenced within 30 days after the formation ordinance is adopted. Any appeal from a final judgment in an action or proceeding shall be concluded within 30 days after the entry of judgment.

Section 65. No limitation on home rule. The powers granted to governmental units in this Law shall not be construed as a limitation on the powers of a home rule unit granted by Article VII of the Illinois Constitution.