Illinois General Assembly - Full Text of HB0268
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Full Text of HB0268  102nd General Assembly

HB0268enr 102ND GENERAL ASSEMBLY

  
  
  

 


 
HB0268 EnrolledLRB102 10079 AWJ 15399 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
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
17clerk by the governing body.
18    "District" means a tourism preservation and sustainability
19district created under this Act.
20    "Governing body" means the legislative body of a
21governmental unit that establishes a district by resolution of
22intent and ordinance under this Act.
23    "Governmental unit" means a municipality, county, or

 

 

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1township located in whole or part within the district.
2    "Hotel" means any building or buildings in which the
3public may, for consideration, obtain living quarters or
4sleeping or housekeeping accommodations that will benefit from
5a district's services or improvements. "Hotel" includes, but
6is not limited to, inns, motels, tourist homes or courts,
7lodging houses, rooming houses, retreat centers, conference
8centers, and hunting lodges. "Hotel" does not include a
9short-term rental.
10    "Improvement" means the acquisition, construction,
11installation, or maintenance of any tangible property that has
12an estimated useful life of 5 years or more and that is
13reasonably related to the enhancement of tourism.
14    "Local tourism and convention bureau" means either a unit
15of local government or a nonprofit corporation (i) that has as
16its sole purpose the promotion of tourism; (ii) that is
17operating with a paid, full-time staff; (iii) that receives
18local hotel or motel tax receipts from one or more
19municipalities or counties; (iv) that represents one or more
20municipalities or counties; and (v) that either is recognized
21by the Department of Commerce and Economic Opportunity as a
22certified local tourism and convention bureau or has been in
23legal existence as a nonprofit corporation for a minimum of
24two years before contracting with a governmental unit to
25implement services and improvements in a district.
26    "Services" means marketing, promotions, sales efforts,

 

 

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1events, and other activities that are reasonably related to
2the enhancement of tourism.
3    "Short-term rental" means a single-family dwelling or a
4residential dwelling unit in a multi-unit apartment structure,
5condominium, cooperative, timeshare, or similar joint property
6ownership arrangement that is rented for a fee for less than 30
7consecutive days. "Short-term rental" includes a dwelling unit
8rented for business travel or recreation.
9    "Tourism" means travel by either State residents or
10out-of-state visitors traveling away from home overnight in
11paid accommodations or on day trips to places away from the
12resident's or visitor's home.
13    "Transaction charge" means a special charge that is
14imposed upon a hotel in a district that is either a fixed
15dollar or percentage rate per hotel room per night.
 
16    Section 10. Petition and resolution of intent to create a
17district.
18    (a) To initiate the process of creating a district,
19business owners must file a written petition with the clerk of
20a governmental unit in which the proposed district lies. The
21petition must include a summary of the district plan, which
22shall include all of the following:
23        (1) the name of the district;
24        (2) a map showing the boundaries of the district,
25    which need not be contiguous but shall not encompass more

 

 

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1    than 6 counties;
2        (3) the initial and maximum rates of the transaction
3    charge for hotels within the boundaries of the district;
4        (4) the length of the proposed term of the district,
5    not to exceed 5 years upon formation or 10 additional
6    years upon each renewal;
7        (5) a brief description of the services and
8    improvements proposed to be provided by the local tourism
9    and convention bureau;
10        (6) information specifying where the complete district
11    plan can be obtained by the governing body; and
12        (7) information specifying that the complete district
13    plan shall be furnished to the governing body upon
14    request.
15    The business owners that file the petition under
16subsection (a) must certify on the petition that they believe
17they will pay more than 50% of the transaction charges
18proposed to be levied by the district, as determined by the
19last 12 months of State hotel operators' occupation taxes paid
20preceding the date of the petition, for the proposed district.
21    Petitions may be filed with a county clerk only if more
22than 50% of the land within the county is included in the
23district.
24    (b) Within 60 days after the filing of the written
25petition under subsection (a), the governing body may adopt a
26resolution that expresses the intention to create the district

 

 

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1proposed in the written petition. The resolution of intent
2shall include the following information:
3        (1) the name of the district;
4        (2) a description of the boundaries of the district,
5    which need not be contiguous but shall not encompass more
6    than 6 counties;
7        (3) the initial and maximum rates of the transaction
8    charge for hotels within the boundaries of the district;
9        (4) the length of the proposed term of the district,
10    not to exceed 5 years upon formation or up to 10 additional
11    years upon each renewal;
12        (5) a brief description of the services and
13    improvements proposed to be provided by the district;
14        (6) the time and place of a public hearing on the
15    formation of the proposed district; and
16        (7) a statement that any hotel proposed to be subject
17    to a transaction charge has the opportunity to be heard at
18    the public hearing regarding the district formation and an
19    opportunity to file objections to the district formation
20    with the clerk at any time prior to the conclusion of the
21    public hearing.
 
22    Section 15. District plan. A district plan shall be
23prepared by the business owners who submitted the petition
24under Section 10 before the public hearing on the proposed
25district. The district plan shall include or identify the

 

 

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1following:
2    (1) the estimated annual budget of the district, which may
3include specific allocations to expedite the recovery of the
4tourism industry;
5    (2) the initial and maximum rates of the transaction
6charge for each business that will be subject to the
7transaction charge, in sufficient detail for each of those
8business owners to estimate the amount of transaction charges
9for which each hotel would be responsible;
10    (3) the method for calculating the transaction charge;
11    (4) a statement that, after the first imposition of a
12transaction charge within the district, the transaction charge
13may continue to be imposed until the end of the district's term
14without the requirement of an additional public hearing if the
15transaction charge rate does not exceed the rate specified in
16the district plan;
17    (5) the frequency and manner that the governmental unit
18shall collect the transaction charges;
19    (6) the frequency and manner that the governmental unit
20shall remit the transaction charges to the local tourism and
21convention bureau;
22    (7) the name of the district;
23    (8) the manner by which a business owner may contest the
24calculation of the transaction charge;
25    (9) the amount or rate of penalties and interest
26applicable to delinquent payments, if any, and the method of

 

 

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1collection of penalties and interest;
2    (10) a description of the proposed services and
3improvements to be provided;
4    (11) a map that depicts the district's proposed boundaries
5but need not depict every hotel;
6    (12) a map showing the district's benefit zones, if any;
7    (13) a statement that a hotel may pass a transaction
8charge onto customers and the specific title to be used when
9the transaction charge is passed on to the customer;
10    (14) the name and general structure of the local tourism
11and convention bureau proposed to receive and use the revenues
12of the transaction charges for the proposed services and
13improvements; and
14    (15) the term of the district, which shall not exceed 5
15years upon formation or 10 additional years upon each renewal.
 
16    Section 20. Territory of other governmental units in a
17district.
18    (a) Except as provided in subsection (b), if the proposed
19district's boundaries include territory of a governmental unit
20other than the governmental unit in which the petition was
21filed under Section 10, the governmental unit in which the
22petition was filed must enter into an intergovernmental
23agreement with the other governmental unit authorizing, on
24mutually agreed terms, the governmental unit in which the
25petition was filed to form or renew the district and to perform

 

 

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

 

 

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1    Section 25. Public hearing.
2    (a) The governing body shall hold a public hearing on the
3proposed district at the day and time indicated in the
4resolution of intent. The governing body shall give notice of
5the public hearing by United States mail to each governmental
6unit within the district and each business owner that may be
7subjected to a transaction charge, based on the governmental
8unit's most recent records. The notice shall include the
9resolution of intent and the name, address, email address, and
10phone number of the clerk of the governing body, and it shall
11be mailed not less than 30 days before the public hearing.
12    (b) At the hearing, the governing body shall consider
13public testimony regarding the proposed district. Any business
14owner that may be subjected to a transaction charge may submit
15a written objection to the formation of the district to the
16clerk at any time before voting has begun on the formation
17ordinance. If written objections are received from hotels that
18would pay 50% or more of the proposed transaction charges in
19the proposed district, as determined by the last 12 months of
20State hotel operators' occupation taxes paid preceding the
21date of the petition, the hearing shall end and no further
22proceedings to form a district may be undertaken by the
23governmental unit for a period of one year from the date of the
24hearing.
25    The hearing may be adjourned to another date without
26further notice, other than a motion to be entered upon the

 

 

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1minutes fixing the time and place the governing body will
2reconvene.
3    (c) At the public hearing, the governing body may remove
4territory or hotels from the district that will not benefit
5from the district's services or improvements, reduce a
6transaction charge rate, or make administrative clarifications
7to the district plan.
8    (d) If, at the conclusion of the public hearing, the clerk
9determines that the written objections submitted under
10subsection (b) do not represent hotels that would pay 50% or
11more of the proposed transaction charges, as determined by the
12last 12 months of State hotel operators' occupation taxes paid
13preceding the date of the petition, then the governing body
14may adopt an ordinance forming the district under Section 30.
 
15    Section 30. Formation ordinance; management of funds.
16    (a) The formation ordinance shall contain:
17        (1) the date the district is established;
18        (2) a reference to the district plan, which shall be
19    on file and available for inspection with the clerk;
20        (3) a statement that the clerk determined that the
21    total amount of written objections received from hotels
22    that will be subjected to a transaction charge did not
23    represent hotels that would pay 50% or more of the
24    proposed transaction charges, as determined by the last 12
25    months of State hotel operators' occupation taxes paid

 

 

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1    preceding the date of the petition;
2        (4) the name of the district;
3        (5) the effective date of the transaction charge;
4        (6) the term of the district, not to exceed 5 years
5    upon formation or up to 10 additional years upon each
6    renewal;
7        (7) a description of the boundaries of the district,
8    which need not be contiguous but shall not encompass more
9    than 6 counties;
10        (8) the name of the local tourism and convention
11    bureau and authorization for the governmental unit to
12    remit the collected transaction charges to the local
13    tourism and convention bureau in exchange for the local
14    tourism and convention bureau providing services and
15    improvements; and
16        (9) the amount, if any, that the governmental unit
17    will retain of the total amount of transaction charges
18    collected to defray (in whole or in part) the governmental
19    unit's administrative costs related to the district, in an
20    amount not more than 2% of the collected transaction
21    charges.
22    (b) Before a tourism and convention bureau may receive
23transaction charges under this Act, the tourism and convention
24bureau must be organized as follows:
25        (1) for a local tourism and convention bureau that is
26    a unit of local government that does not have a nonprofit

 

 

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

 

 

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1    Section 40. Annual report.
2    (a) Each year, a local tourism and convention bureau that
3receives transaction charges shall submit to the governing
4body a report of the bureau's activities and expenditures. The
5report shall be submitted no later than 30 days after the
6anniversary of the date upon which the transaction charge is
7first imposed. The report shall include:
8        (1) a summary of the activities provided in the
9    previous year through use of the transaction charges;
10        (2) a summary of the expenditures for the previous
11    year showing the use of the transaction charges;
12        (3) the amount of any revenue from transaction charges
13    to be carried over from prior years;
14        (4) a list of the directors and officers of the local
15    tourism and convention bureau; and
16        (5) a list of the accomplishments, improvements, and
17    services attributable to the district.
18    (b) The governing body shall also submit to the Department
19of Commerce and Economic Opportunity, no later than 60 days
20after the anniversary of the date upon which the transaction
21charge is first imposed, the annual report provided by the
22local tourism and convention bureau and a report of the amount
23of total revenue received from the transaction charges and how
24much the governmental unit, if any, withheld for
25administrative costs related to the district under the
26district plan.
 

 

 

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1    Section 45. Modification.
2    (a) Upon a written request from business owners whose
3hotels pay the majority of the transaction charges proposed to
4be levied by a district, as determined by the last 12 months of
5State and local taxes paid from the date of the written
6request, the governing body of the district shall, after
7providing notice, hold a public hearing as provided in Section
825 for modifications to the district for any one or more of the
9following purposes:
10        (1) to increase, in any year other than the initial
11    year, the rate of a transaction charge to an amount
12    exceeding the maximum rate described in the district plan;
13        (2) to change the boundaries of the district; or
14        (3) for any other purpose that is agreed to by the
15    governing body.
16    (b) Any modification shall be reflected in an updated
17district plan to be on file and available for inspection with
18the clerk.
19    (c) If the governmental unit is a county, the county may
20not modify the district boundaries to include less than 50% of
21the land within the county.
 
22    Section 50. Transaction charges; collection and
23remittance. Transaction charges paid by a hotel shall be
24collected by the governmental unit that passed the ordinance

 

 

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1creating the district. The collected transaction charges shall
2be remitted on a prompt basis by the governmental unit that
3passed the ordinance creating the district to the local
4tourism and convention bureau in accordance with the district
5plan and the formation ordinance. During any period that the
6governmental unit that passed the ordinance creating the
7district may hold the collected transaction charges, the
8governmental unit shall at all times maintain the collected
9transaction charges in a specially designated fund segregated
10from all other funds.
11    Collected transaction charges held by the governmental
12unit that passed the ordinance creating the district may not
13be commingled with other funds of the governmental unit or
14units.
15    A transaction charge may not exceed 5% of the hotel room
16rate per occupied hotel room per night and may not be imposed
17upon any customer transactions at restaurants or for food,
18drinks, or merchandise. In addition, a transaction charge may
19not be charged for the rental of hotel rooms to a permanent
20occupant of a hotel. As used in this paragraph, "permanent
21occupant" means a person or company that occupies or has the
22right to occupy a hotel room for at least 30 consecutive days.
 
23    Section 55. Renewal. Before a district's term expires, the
24district may be renewed by following the petition process
25outlined in Section 10, creating a new district plan under

 

 

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1Section 15, and adopting a new formation ordinance following
2the procedures detailed in Sections 25, 30, and 35 on or before
3the date the district's term expires. The governmental unit
4that passed the ordinance creating the district must enter
5into, amend, or extend all intergovernmental agreements, if
6applicable, as required by Section 20 before renewing a
7district.
8    If the district's term expires, any funds remaining from
9transaction charges shall be used in accordance with the
10district plan or refunded to the hotels in equal proportion to
11the amount of transaction charges paid by each hotel.
 
12    Section 60. Termination.
13    (a) The governing body of a district may initiate
14termination of the district by either of the following
15methods:
16        (1) The governing body may hold a public hearing to
17    determine if there has been a violation of law,
18    malfeasance, or misappropriation of funds.
19        (2) If written objections are filed with the clerk
20    from the business owners that, in the most recently
21    completed fiscal year, paid 50% or more of the transaction
22    charges or if, in the case of a district that has not
23    completed a fiscal year, written objections are received
24    from business owners that paid 50% or more of the
25    transaction charges following the initial imposition of

 

 

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1    the transaction charges would be expected to pay, as
2    determined by the last 12 months of State hotel operators'
3    occupation taxes paid, then the governing body may hold a
4    public hearing within 45 days after the anniversary of the
5    district's formation to discuss the written objections. A
6    written objection under this paragraph must be signed by
7    the business owner and dated within 30 days before
8    submission to the clerk and must contain a statement as to
9    why the district should be terminated. Written objections
10    under this paragraph may be submitted only during the 30
11    days before the anniversary of the district's formation.
12    (b) After holding a hearing under paragraph (1) of
13subsection (a) at which the governing body finds that there
14has been a violation of law, malfeasance, or misappropriation
15of funds, the governing body shall: (i) notify the local
16tourism and convention bureau to remedy the violation within
1730 days; or (ii) either in the public meeting held under
18paragraph (1) of subsection (a) or a separate public meeting,
19approve a plan for the local tourism and convention bureau to
20remedy violations. If the local tourism and convention bureau
21does not remedy the violations within 30 days after
22notification or the violations are not remedied according to
23the governing body's plan to remedy the violation, the
24governing body may terminate the district by ordinance or
25resolution.
26    In a hearing under paragraph (2) of subsection (a), the

 

 

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1governing body shall determine if the reasons for termination
2in the written objections justify termination of the district
3and, if the governing body finds that the reasons do justify
4termination, may terminate the district by ordinance or
5resolution.
6    (c) A public hearing held under this Section shall be held
7only after notice has been given to the business owners and the
8local tourism and convention bureau not less than 30 days
9before the hearing.
10    (d) Upon termination, any funds remaining shall be used by
11the local tourism and convention bureau in accordance with the
12district plan or refunded to the hotels in equal proportion to
13the amount of transaction charges paid by each hotel, as
14required by the governing body in the ordinance or resolution
15terminating the district.
 
16    Section 65. Contesting validity. The validity of a
17district created, district plan established, or transaction
18charge imposed under this Act may not be contested in any
19action or proceeding unless the action or proceeding is
20commenced within 30 days after the formation ordinance is
21adopted or, with respect to modifications to a district plan,
22within 30 days after a district plan has been modified. If a
23party appeals a final judgment, the party filing the appeal
24shall request discretionary acceleration under Supreme Court
25Rule 311(b).
 

 

 

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1    Section 70. No limitation on home rule. The powers granted
2to a governmental unit in this Act are not a limitation on the
3powers of a home rule unit granted by Article VII of the
4Illinois Constitution.
 
5    Section 75. Special service areas and business improvement
6districts. Nothing in this Act prevents a tourism preservation
7and sustainability district from sharing area with a special
8service area or a business improvement district.
 
9    Section 80. Hotel operator's occupation tax information.
10Upon request of a governmental unit for information relating
11to the amount of State hotel operators' occupation taxes paid
12by hotels within a proposed or existing tourism preservation
13and sustainability district, the Department of Revenue shall
14provide information or documents to the governmental unit so
15that the governmental unit may determine State hotel
16operators' occupation taxes paid as needed under this Act. The
17Department shall make available to the governmental unit
18information contained on transaction reporting returns
19required to be filed under Section 6 of the Hotel Operators'
20Occupation Tax Act that report the amount of rental receipts
21received within the proposed or existing tourism preservation
22and sustainability district. The disclosure shall be made
23pursuant to a written agreement between the Department and the

 

 

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1governmental unit, which is an official purpose within the
2meaning of Section 11 of the Retailers' Occupation Tax Act.
3The written agreement between the Department and the
4governmental unit shall provide for reciprocity, limitations
5on access, disclosure, and procedures for requesting
6information. Information so provided shall be subject to all
7confidentiality provisions of Section 11 of the Retailers'
8Occupation Tax Act.
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.