Sen. Sara Feigenholtz

Filed: 1/3/2023

 

 


 

 


 
10200SB2324sam001LRB102 17067 AWJ 42350 a

1
AMENDMENT TO SENATE BILL 2324

2    AMENDMENT NO. ______. Amend Senate Bill 2324 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This Act may be cited as the
5Tourism Preservation and Sustainability District Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Benefit zone" means a zone (i) located within a district,
8(ii) established by the governing body of the district based
9upon the degree of benefit derived from the services to be
10provided within the zone, and (iii) in which the governing
11body may impose unique transaction charges based on the degree
12of benefit intended to be provided.
13    "Business owner" means a hotel owner or the hotel owner's
14representative.
15    "Clerk" means the clerk of a governing body or, if the
16governing body has no clerk, the individual designated as the

 

 

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1clerk by the governing body.
2    "District" means a tourism preservation and sustainability
3district created under this Act.
4    "Governing body" means the legislative body of a
5governmental unit that establishes a district by resolution of
6intent and ordinance under this Act.
7    "Governmental unit" means a municipality, county, or
8township located in whole or part within the district.
9    "Hotel" means any building or buildings in which the
10public may, for consideration, obtain living quarters or
11sleeping or housekeeping accommodations that will benefit from
12a district's services or improvements. "Hotel" includes, but
13is not limited to, inns, motels, tourist homes or courts,
14lodging houses, rooming houses, retreat centers, conference
15centers, and hunting lodges. "Hotel" does not include a
16short-term rental.
17    "Improvement" means the acquisition, construction,
18installation, or maintenance of any tangible property that has
19an estimated useful life of 5 years or more and that is
20reasonably related to the enhancement of tourism.
21    "Local tourism and convention bureau" means either a unit
22of local government or a nonprofit corporation (i) that has as
23its sole purpose the promotion of tourism; (ii) that is
24operating with a paid, full-time staff; (iii) that receives
25local hotel or motel tax receipts from one or more
26municipalities or counties; (iv) that represents one or more

 

 

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1municipalities or counties; and (v) that either is recognized
2by the Department of Commerce and Economic Opportunity as a
3certified local tourism and convention bureau or has been in
4legal existence as a nonprofit corporation for a minimum of
5two years before contracting with a governmental unit to
6implement services and improvements in a district.
7    "Services" means marketing, promotions, sales efforts,
8events, and other activities that are reasonably related to
9the enhancement of tourism.
10    "Short-term rental" means a single-family dwelling or a
11residential dwelling unit in a multi-unit apartment structure,
12condominium, cooperative, timeshare, or similar joint property
13ownership arrangement that is rented for a fee for less than 30
14consecutive days. "Short-term rental" includes a dwelling unit
15rented for business travel or recreation.
16    "Tourism" means travel by either State residents or
17out-of-state visitors traveling away from home overnight in
18paid accommodations or on day trips to places away from the
19resident's or visitor's home.
20    "Transaction charge" means a special charge that is
21imposed upon a hotel in a district that is either a fixed
22dollar or percentage rate per hotel room per night.
 
23    Section 10. Petition and resolution of intent to create a
24district.
25    (a) To initiate the process of creating a district,

 

 

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1business owners must file a written petition with the clerk of
2a governmental unit in which the proposed district lies. The
3petition must include a summary of the district plan, which
4shall include all of the following:
5        (1) the name of the district;
6        (2) a map showing the boundaries of the district,
7    which need not be contiguous but shall not encompass more
8    than 6 counties;
9        (3) the initial and maximum rates of the transaction
10    charge for hotels within the boundaries of the district;
11        (4) the length of the proposed term of the district,
12    not to exceed 5 years upon formation or 10 additional
13    years upon each renewal;
14        (5) a brief description of the services and
15    improvements proposed to be provided by the local tourism
16    and convention bureau;
17        (6) information specifying where the complete district
18    plan can be obtained by the governing body; and
19        (7) information specifying that the complete district
20    plan shall be furnished to the governing body upon
21    request.
22    The business owners that file the petition under
23subsection (a) must certify on the petition that they believe
24they will pay more than 50% of the transaction charges
25proposed to be levied by the district, as determined by the
26last 12 months of State and local taxes paid preceding the date

 

 

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1of the petition, for the proposed district.
2    Petitions may be filed with a county clerk only if more
3than 50% of the land within the county is included in the
4district.
5    (b) Within 60 days after the filing of the written
6petition under subsection (a), the governing body may adopt a
7resolution that expresses the intention to create the district
8proposed in the written petition. The resolution of intent
9shall include the following information:
10        (1) the name of the district;
11        (2) a description of the boundaries of the district,
12    which need not be contiguous but shall not encompass more
13    than 6 counties;
14        (3) the initial and maximum rates of the transaction
15    charge for hotels within the boundaries of the district;
16        (4) the length of the proposed term of the district,
17    not to exceed 5 years upon formation or up to 10 additional
18    years upon each renewal;
19        (5) a brief description of the services and
20    improvements proposed to be provided by the district;
21        (6) the time and place of a public hearing on the
22    formation of the proposed district; and
23        (7) a statement that any hotel proposed to be subject
24    to a transaction charge has the opportunity to be heard at
25    the public hearing regarding the district formation and an
26    opportunity to file objections to the district formation

 

 

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1    with the clerk at any time prior to the conclusion of the
2    public hearing.
 
3    Section 15. District plan. A district plan shall be
4prepared by the business owners who submitted the petition
5under Section 10 before the public hearing on the proposed
6district. The district plan shall include or identify the
7following:
8    (1) the estimated annual budget of the district, which may
9include specific allocations to expedite the recovery of the
10tourism industry;
11    (2) the initial and maximum rates of the transaction
12charge for each business that will be subject to the
13transaction charge, in sufficient detail for each of those
14business owners to estimate the amount of transaction charges
15for which each hotel would be responsible;
16    (3) the method for calculating the transaction charge;
17    (4) a statement that, after the first imposition of a
18transaction charge within the district, the transaction charge
19may continue to be imposed until the end of the district's term
20without the requirement of an additional public hearing if the
21transaction charge rate does not exceed the rate specified in
22the district plan;
23    (5) the frequency and manner that the governmental unit
24shall collect the transaction charges;
25    (6) the frequency and manner that the governmental unit

 

 

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1shall remit the transaction charges to the local tourism and
2convention bureau;
3    (7) the name of the district;
4    (8) the manner by which a business owner may contest the
5calculation of the transaction charge;
6    (9) the amount or rate of penalties and interest
7applicable to delinquent payments, if any, and the method of
8collection of penalties and interest;
9    (10) a description of the proposed services and
10improvements to be provided;
11    (11) a map that depicts the district's proposed boundaries
12but need not depict every hotel;
13    (12) a map showing the district's benefit zones, if any;
14    (13) a statement that a hotel may pass a transaction
15charge onto customers and the specific title to be used when
16the transaction charge is passed on to the customer;
17    (14) the name and general structure of the local tourism
18and convention bureau proposed to receive and use the revenues
19of the transaction charges for the proposed services and
20improvements; and
21    (15) the term of the district, which shall not exceed 5
22years upon formation or 10 additional years upon each renewal.
 
23    Section 20. Territory of other governmental units in a
24district.
25    (a) Except as provided in subsection (b), if the proposed

 

 

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1district's boundaries include territory of a governmental unit
2other than the governmental unit in which the petition was
3filed under Section 10, the governmental unit in which the
4petition was filed must enter into an intergovernmental
5agreement with the other governmental unit authorizing, on
6mutually agreed terms, the governmental unit in which the
7petition was filed to form or renew the district and to perform
8any action authorized under this Act.
9    (b) If a petition under Section 10 is filed with the clerk
10of a municipality and the proposed district boundaries do not
11extend beyond the boundaries of the municipality, the
12municipality may form or renew the district without an
13intergovernmental agreement with a county or township that has
14territory within the municipality.
15    If a petition under Section 10 is filed with the clerk of a
16township and the proposed district boundaries do not extend
17beyond the boundaries of the township, the township may form
18or renew the district without an intergovernmental agreement
19with the county in which the township lies, but the township
20must enter into an intergovernmental agreement with any
21municipality that has territory within the township.
22    If a petition under Section 10 is filed with the clerk of a
23county and the proposed district boundaries are solely within
24the county, the county may form or renew the district without
25an intergovernmental agreement with any municipalities or
26townships with territory within the county. If a petition

 

 

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1under Section 10 is filed with the clerk of a county and the
2proposed district boundaries includes portions of another
3county, the county in which the petition was filed must only
4enter into an intergovernmental agreement with the county or
5counties in which the other territory is situated in order to
6form or renew a district.
 
7    Section 25. Public hearing.
8    (a) The governing body shall hold a public hearing on the
9proposed district at the day and time indicated in the
10resolution of intent. The governing body shall give notice of
11the public hearing by United States mail to each governmental
12unit within the district and each business owner that may be
13subjected to a transaction charge, based on the governmental
14unit's most recent records. The notice shall include the
15resolution of intent and the name, address, email address, and
16phone number of the clerk of the governing body, and it shall
17be mailed not less than 30 days before the public hearing.
18    (b) At the hearing, the governing body shall consider
19public testimony regarding the proposed district. Any business
20owner that may be subjected to a transaction charge may submit
21a written objection to the formation of the district to the
22clerk at any time before voting has begun on the formation
23ordinance. If written objections are received from hotels that
24would pay 50% or more of the proposed transaction charges in
25the proposed district, as determined by the last 12 months of

 

 

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1State and local taxes paid preceding the date of the petition,
2the hearing shall end and no further proceedings to form a
3district may be undertaken by the governmental unit for a
4period of one year from the date of the hearing.
5    The hearing may be adjourned to another date without
6further notice, other than a motion to be entered upon the
7minutes fixing the time and place the governing body will
8reconvene.
9    (c) At the public hearing, the governing body may remove
10territory or hotels from the district that will not benefit
11from the district's services or improvements, reduce a
12transaction charge rate, or make administrative clarifications
13to the district plan.
14    (d) If, at the conclusion of the public hearing, the clerk
15determines that the written objections submitted under
16subsection (b) do not represent hotels that would pay 50% or
17more of the proposed transaction charges, as determined by the
18last 12 months of State and local taxes paid preceding the date
19of the petition, then the governing body may adopt an
20ordinance forming the district under Section 30.
 
21    Section 30. Formation ordinance; management of funds.
22    (a) The formation ordinance shall contain:
23        (1) the date the district is established;
24        (2) a reference to the district plan, which shall be
25    on file and available for inspection with the clerk;

 

 

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1        (3) a statement that the clerk determined that the
2    total amount of written objections received from hotels
3    that will be subjected to a transaction charge did not
4    represent hotels that would pay 50% or more of the
5    proposed transaction charges, as determined by the last 12
6    months of State and local taxes paid preceding the date of
7    the petition;
8        (4) the name of the district;
9        (5) the effective date of the transaction charge;
10        (6) the term of the district, not to exceed 5 years
11    upon formation or up to 10 additional years upon each
12    renewal;
13        (7) a description of the boundaries of the district,
14    which need not be contiguous but shall not encompass more
15    than 6 counties;
16        (8) the name of the local tourism and convention
17    bureau and authorization for the governmental unit to
18    remit the collected transaction charges to the local
19    tourism and convention bureau in exchange for the local
20    tourism and convention bureau providing services and
21    improvements; and
22        (9) the amount, if any, that the governmental unit
23    will retain of the total amount of transaction charges
24    collected to defray (in whole or in part) the governmental
25    unit's administrative costs related to the district, in an
26    amount not more than 2% of the collected transaction

 

 

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1    charges.
2    (b) Before a tourism and convention bureau may receive
3transaction charges under this Act, the tourism and convention
4bureau must be organized as follows:
5        (1) for a local tourism and convention bureau that is
6    a unit of local government that does not have a nonprofit
7    corporation existing on the date the formation ordinance
8    is adopted, the local tourism and convention bureau must
9    create a nonprofit corporation solely for purposes of this
10    Act and that corporation's certificate of incorporation or
11    bylaws must provide that the Board of Directors of the
12    nonprofit corporation must be composed of the business
13    owners subject to the transaction charge, or their
14    designees, and the Board of Directors shall be responsible
15    for managing funds raised by the district for the local
16    tourism and convention bureau, which shall fulfill the
17    obligations of the district plan; or
18        (2) for a local tourism and convention bureau that is
19    a nonprofit corporation, the local tourism and convention
20    bureau must create a committee composed of the business
21    owners subject to the transaction charge, or their
22    designees, and the committee shall be responsible for
23    managing funds raised by the district and fulfilling the
24    obligations of the district plan.
 
25    Section 35. Baseline funding and services. The funds for

 

 

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1services and improvements that are provided to a local tourism
2and convention bureau for purposes of this Act shall be
3considered supplemental funding and services and shall not
4supplant existing funding or services provided by the State or
5any unit of local government.
 
6    Section 40. Annual report.
7    (a) Each year, a local tourism and convention bureau that
8receives transaction charges shall submit to the governing
9body a report of the bureau's activities and expenditures. The
10report shall be submitted no later than 30 days after the
11anniversary of the date upon which the transaction charge is
12first imposed. The report shall include:
13        (1) a summary of the activities provided in the
14    previous year through use of the transaction charges;
15        (2) a summary of the expenditures for the previous
16    year showing the use of the transaction charges;
17        (3) the amount of any revenue from transaction charges
18    to be carried over from prior years;
19        (4) a list of the directors and officers of the local
20    tourism and convention bureau; and
21        (5) a list of the accomplishments, improvements, and
22    services attributable to the district.
23    (b) The governing body shall also submit to the Department
24of Commerce and Economic Opportunity, no later than 60 days
25after the anniversary of the date upon which the transaction

 

 

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1charge is first imposed, the annual report provided by the
2local tourism and convention bureau and a report of the amount
3of total revenue received from the transaction charges and how
4much the governmental unit, if any, withheld for
5administrative costs related to the district under the
6district plan.
 
7    Section 45. Modification.
8    (a) Upon a written request from business owners whose
9hotels pay the majority of the transaction charges proposed to
10be levied by a district, as determined by the last 12 months of
11State and local taxes paid from the date of the written
12request, the governing body of the district shall, after
13providing notice, hold a public hearing as provided in Section
1425 for modifications to the district for any one or more of the
15following purposes:
16        (1) to increase, in any year other than the initial
17    year, the rate of a transaction charge to an amount
18    exceeding the maximum rate described in the district plan;
19        (2) to change the boundaries of the district; or
20        (3) for any other purpose that is agreed to by the
21    governing body.
22    (b) Any modification shall be reflected in an updated
23district plan to be on file and available for inspection with
24the clerk.
25    (c) If the governmental unit is a county, the county may

 

 

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1not modify the district boundaries to include less than 50% of
2the land within the county.
 
3    Section 50. Transaction charges; collection and
4remittance. Transaction charges paid by a hotel shall be
5collected by the governmental unit that passed the ordinance
6creating the district. The collected transaction charges shall
7be remitted on a prompt basis by the governmental unit that
8passed the ordinance creating the district to the local
9tourism and convention bureau in accordance with the district
10plan and the formation ordinance. During any period that the
11governmental unit that passed the ordinance creating the
12district may hold the collected transaction charges, the
13governmental unit shall at all times maintain the collected
14transaction charges in a specially designated fund segregated
15from all other funds.
16    Collected transaction charges held by the governmental
17unit that passed the ordinance creating the district may not
18be commingled with other funds of the governmental unit or
19units.
20    A transaction charge may not exceed 5% of the hotel room
21rate per occupied hotel room per night and may not be imposed
22upon any customer transactions at restaurants or for food,
23drinks, or merchandise. In addition, a transaction charge may
24not be charged for the rental of hotel rooms to a permanent
25occupant of a hotel. As used in this paragraph, "permanent

 

 

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1occupant" means a person or company that occupies or has the
2right to occupy a hotel room for at least 30 consecutive days.
 
3    Section 55. Renewal. Before a district's term expires, the
4district may be renewed by following the petition process
5outlined in Section 10, creating a new district plan under
6Section 15, and adopting a new formation ordinance following
7the procedures detailed in Sections 25, 30, and 35 on or before
8the date the district's term expires. The governmental unit
9that passed the ordinance creating the district must enter
10into, amend, or extend all intergovernmental agreements, if
11applicable, as required by Section 20 before renewing a
12district.
13    If the district's term expires, any funds remaining from
14transaction charges shall be used in accordance with the
15district plan or refunded to the hotels in equal proportion to
16the amount of transaction charges paid by each hotel.
 
17    Section 60. Termination.
18    (a) The governing body of a district may initiate
19termination of the district by either of the following
20methods:
21        (1) The governing body may hold a public hearing to
22    determine if there has been a violation of law,
23    malfeasance, or misappropriation of funds.
24        (2) If written objections are filed with the clerk

 

 

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1    from the business owners that, in the most recently
2    completed fiscal year, paid 50% or more of the transaction
3    charges or if, in the case of a district that has not
4    completed a fiscal year, written objections are received
5    from business owners that paid 50% or more of the
6    transaction charges following the initial imposition of
7    the transaction charges would be expected to pay, as
8    determined by the last 12 months of State and local taxes
9    paid, then the governing body may hold a public hearing
10    within 45 days after the anniversary of the district's
11    formation to discuss the written objections. A written
12    objection under this paragraph must be signed by the
13    business owner and dated within 30 days before submission
14    to the clerk and must contain a statement as to why the
15    district should be terminated. Written objections under
16    this paragraph may be submitted only during the 30 days
17    before the anniversary of the district's formation.
18    (b) After holding a hearing under paragraph (1) of
19subsection (a) at which the governing body finds that there
20has been a violation of law, malfeasance, or misappropriation
21of funds, the governing body shall: (i) notify the local
22tourism and convention bureau to remedy the violation within
2330 days; or (ii) either in the public meeting held under
24paragraph (1) of subsection (a) or a separate public meeting,
25approve a plan for the local tourism and convention bureau to
26remedy violations. If the local tourism and convention bureau

 

 

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1does not remedy the violations within 30 days after
2notification or the violations are not remedied according to
3the governing body's plan to remedy the violation, the
4governing body may terminate the district by ordinance or
5resolution.
6    In a hearing under paragraph (2) of subsection (a), the
7governing body shall determine if the reasons for termination
8in the written objections justify termination of the district
9and, if the governing body finds that the reasons do justify
10termination, may terminate the district by ordinance or
11resolution.
12    (c) A public hearing held under this Section shall be held
13only after notice has been given to the business owners and the
14local tourism and convention bureau not less than 30 days
15before the hearing.
16    (d) Upon termination, any funds remaining shall be used by
17the local tourism and convention bureau in accordance with the
18district plan or refunded to the hotels in equal proportion to
19the amount of transaction charges paid by each hotel, as
20required by the governing body in the ordinance or resolution
21terminating the district.
 
22    Section 65. Contesting validity. The validity of a
23district created, district plan established, or transaction
24charge imposed under this Act may not be contested in any
25action or proceeding unless the action or proceeding is

 

 

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1commenced within 30 days after the formation ordinance is
2adopted or, with respect to modifications to a district plan,
3within 30 days after a district plan has been modified. If a
4party appeals a final judgment, the party filing the appeal
5shall request discretionary acceleration under Supreme Court
6Rule 311(b).
 
7    Section 70. No limitation on home rule. The powers granted
8to a governmental unit in this Act are not a limitation on the
9powers of a home rule unit granted by Article VII of the
10Illinois Constitution.
 
11    Section 75. Special service areas and business improvement
12districts. Nothing in this Act prevents a tourism preservation
13and sustainability district from sharing area with a special
14service area or a business improvement district.
 
15    Section 900. The Department of Revenue Law of the Civil
16Administrative Code of Illinois is amended by adding Section
172505-810 as follows:
 
18    (20 ILCS 2505/2505-810 new)
19    Sec. 2505-810. Tourism Preservation and Sustainability
20District Act. Upon request of a governmental unit for
21information relating to the amount of State and local taxes
22paid by hotels within a proposed or existing tourism

 

 

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1preservation and sustainability district, the Department shall
2provide information or documents to the governmental unit so
3that the governmental unit may determine hotel taxes paid as
4needed under the Tourism Preservation and Sustainability
5District Act. As used in this Section, "governmental unit" has
6the meaning ascribed to that term in Section 5 of the Tourism
7Preservation and Sustainability District Act.".