Sen. Sara Feigenholtz

Filed: 1/5/2023

 

 


 

 


 
10200HB0268sam001LRB102 10079 AWJ 42422 a

1
AMENDMENT TO HOUSE BILL 268

2    AMENDMENT NO. ______. Amend House Bill 268 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 hotel operators' occupation taxes paid

 

 

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

 

 

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

 

 

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

 

 

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1    Section 35. Baseline funding and services. The funds for
2services and improvements that are provided to a local tourism
3and convention bureau for purposes of this Act shall be
4considered supplemental funding and services and shall not
5supplant existing funding or services provided by the State or
6any unit of local government.
 
7    Section 40. Annual report.
8    (a) Each year, a local tourism and convention bureau that
9receives transaction charges shall submit to the governing
10body a report of the bureau's activities and expenditures. The
11report shall be submitted no later than 30 days after the
12anniversary of the date upon which the transaction charge is
13first imposed. The report shall include:
14        (1) a summary of the activities provided in the
15    previous year through use of the transaction charges;
16        (2) a summary of the expenditures for the previous
17    year showing the use of the transaction charges;
18        (3) the amount of any revenue from transaction charges
19    to be carried over from prior years;
20        (4) a list of the directors and officers of the local
21    tourism and convention bureau; and
22        (5) a list of the accomplishments, improvements, and
23    services attributable to the district.
24    (b) The governing body shall also submit to the Department
25of Commerce and Economic Opportunity, no later than 60 days

 

 

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1after the anniversary of the date upon which the transaction
2charge is first imposed, the annual report provided by the
3local tourism and convention bureau and a report of the amount
4of total revenue received from the transaction charges and how
5much the governmental unit, if any, withheld for
6administrative costs related to the district under the
7district plan.
 
8    Section 45. Modification.
9    (a) Upon a written request from business owners whose
10hotels pay the majority of the transaction charges proposed to
11be levied by a district, as determined by the last 12 months of
12State and local taxes paid from the date of the written
13request, the governing body of the district shall, after
14providing notice, hold a public hearing as provided in Section
1525 for modifications to the district for any one or more of the
16following purposes:
17        (1) to increase, in any year other than the initial
18    year, the rate of a transaction charge to an amount
19    exceeding the maximum rate described in the district plan;
20        (2) to change the boundaries of the district; or
21        (3) for any other purpose that is agreed to by the
22    governing body.
23    (b) Any modification shall be reflected in an updated
24district plan to be on file and available for inspection with
25the clerk.

 

 

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

 

 

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

 

 

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1        (2) If written objections are filed with the clerk
2    from the business owners that, in the most recently
3    completed fiscal year, paid 50% or more of the transaction
4    charges or if, in the case of a district that has not
5    completed a fiscal year, written objections are received
6    from business owners that paid 50% or more of the
7    transaction charges following the initial imposition of
8    the transaction charges would be expected to pay, as
9    determined by the last 12 months of State hotel operators'
10    occupation taxes paid, then the governing body may hold a
11    public hearing within 45 days after the anniversary of the
12    district's formation to discuss the written objections. A
13    written objection under this paragraph must be signed by
14    the business owner and dated within 30 days before
15    submission to the clerk and must contain a statement as to
16    why the district should be terminated. Written objections
17    under this paragraph may be submitted only during the 30
18    days before the anniversary of the district's formation.
19    (b) After holding a hearing under paragraph (1) of
20subsection (a) at which the governing body finds that there
21has been a violation of law, malfeasance, or misappropriation
22of funds, the governing body shall: (i) notify the local
23tourism and convention bureau to remedy the violation within
2430 days; or (ii) either in the public meeting held under
25paragraph (1) of subsection (a) or a separate public meeting,
26approve a plan for the local tourism and convention bureau to

 

 

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

 

 

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1action or proceeding unless the action or proceeding is
2commenced within 30 days after the formation ordinance is
3adopted or, with respect to modifications to a district plan,
4within 30 days after a district plan has been modified. If a
5party appeals a final judgment, the party filing the appeal
6shall request discretionary acceleration under Supreme Court
7Rule 311(b).
 
8    Section 70. No limitation on home rule. The powers granted
9to a governmental unit in this Act are not a limitation on the
10powers of a home rule unit granted by Article VII of the
11Illinois Constitution.
 
12    Section 75. Special service areas and business improvement
13districts. Nothing in this Act prevents a tourism preservation
14and sustainability district from sharing area with a special
15service area or a business improvement district.
 
16    Section 80. Hotel operator's occupation tax information.
17Upon request of a governmental unit for information relating
18to the amount of State hotel operators' occupation taxes paid
19by hotels within a proposed or existing tourism preservation
20and sustainability district, the Department of Revenue shall
21provide information or documents to the governmental unit so
22that the governmental unit may determine State hotel
23operators' occupation taxes paid as needed under this Act. The

 

 

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1Department shall make available to the governmental unit
2information contained on transaction reporting returns
3required to be filed under Section 6 of the Hotel Operators'
4Occupation Tax Act that report the amount of rental receipts
5received within the proposed or existing tourism preservation
6and sustainability district. The disclosure shall be made
7pursuant to a written agreement between the Department and the
8governmental unit, which is an official purpose within the
9meaning of Section 11 of the Retailers' Occupation Tax Act.
10The written agreement between the Department and the
11governmental unit shall provide for reciprocity, limitations
12on access, disclosure, and procedures for requesting
13information. Information so provided shall be subject to all
14confidentiality provisions of Section 11 of the Retailers'
15Occupation Tax Act.
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.".