Illinois General Assembly - Full Text of SB2324
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Full Text of SB2324  102nd General Assembly




State of Illinois
2021 and 2022


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


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.

LRB102 17067 AWJ 22495 b






SB2324LRB102 17067 AWJ 22495 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 Marketing and Recovery District Law.
6    Section 5. Definitions. As used in this Law:
7    "Baseline" means to the existing level of services, or
8funding for services, provided by the governmental unit prior
9to creation of a district.
10    "Benefit zone" means a zone within a district established
11by the governing body based upon the degree of benefit derived
12from the services to be provided within the zone and in which a
13governing body may impose different transaction charges from
14other zones relative to the degree of benefit intended to be
16    "Business owner" means any person recognized by the
17governmental unit as the owner of a tourism business subject
18to a transaction charge and may include an owner's authorized
20    "Clerk" means the clerk or similar administrative
21personnel of the governing body.
22    "District" means a tourism marketing and recovery district
23created pursuant to this Law.



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1    "Governing body" means the legislative body of the
2governmental unit.
3    "Governmental unit" means any municipality, county, or
4township, or any combination thereof.
5    "Improvement" means the acquisition, construction,
6installation, or maintenance of any tangible property with an
7estimated useful life of 5 years or more that is reasonably
8related to the enhancement of tourism.
9    "Services" means marketing, promotions, sales efforts,
10events, and other activities that are reasonably related to
11the enhancement of tourism.
12    "Tourism and convention bureau" means a local tourism and
13convention bureau that is: (i) either a unit of local
14government or incorporated as a nonprofit organization; (ii)
15operating with a paid, full-time staff whose sole purpose is
16to promote tourism in the designated service area; and (iii)
17recognized by the Department of Commerce and Economic
18Opportunity as a certified local tourism and convention bureau
19entitled to receive State tourism grant funds.
20    "Tourism business" means all business establishments which
21provide tourism or tourist-related goods or services.
22    "Transaction charge" means a special charge imposed upon
23customer transactions entered into by tourism businesses in
24the district and may be based on revenue, sales, or any other
25business-related factor deemed appropriate by the governing
26body, including, but not limited to, a fixed rate per occupied



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1hotel room per night.
2    Section 10. Ordinance of intent to create a district.
3    (a) A governing body may initiate proceedings to create a
4district by adopting an ordinance expressing its intention to
5create the district. The ordinance shall include:
6        (1) The name of the district.
7        (2) The boundaries of the district, which need not be
8    contiguous.
9        (3) The type or types of tourism businesses that will
10    pay a transaction charge.
11        (4) The initial and maximum transaction charge rates
12    to be paid by each category of tourism business in
13    sufficient detail for each business owner to estimate the
14    amount of transaction charges each tourism business would
15    pay.
16        (5) If a specific term is proposed, the proposed term
17    of the district.
18        (6) A brief description of the services and
19    improvements proposed to be provided.
20        (7) The time and place of a public hearing on the
21    proposed district.
22        (8) A statement that any tourism business proposed to
23    be subject to a transaction charge has the opportunity to
24    be heard at the hearing regarding the district formation
25    and an opportunity to file objections to the district



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1    formation with the clerk at any time prior to the
2    conclusion of the public hearing.
3    (b) A governmental unit may include territory or tourism
4businesses within the jurisdiction of another governmental
5unit to the extent that the governing body of the other
6governmental unit consents.
7    Section 15. District plan.
8    (a) A district plan shall be prepared before the public
9hearing on the proposed district and include the following:
10        (1) The estimated annual budget. The budget may
11    include specific allocations to expedite the recovery of
12    the tourism industry.
13        (2) The initial and maximum transaction charge rates
14    to be paid by each category of tourism business in
15    sufficient detail for each business owner to estimate the
16    amount of transaction charges each tourism business would
17    pay.
18        (3) A statement that, after the first imposition of a
19    transaction charge within the district, the transaction
20    charge may continue to be imposed in subsequent years
21    without the requirement of an additional public hearing if
22    the transaction charge rate does not exceed the rate
23    specified in the district plan.
24        (4) The frequency and manner of collecting the
25    transaction charges.



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1        (5) The manner of contesting the calculation of any
2    specific transaction charge by a specific tourism
3    business.
4        (6) The amount or rate of penalties and interest
5    applicable to delinquent payments, if any, and the method
6    of collection of penalties and interest.
7        (7) The nature of the proposed services and
8    improvements to be provided.
9        (8) The existing baseline and the baseline the
10    governmental unit will continue to provide.
11        (9) A map of the district boundaries, which need not
12    be contiguous nor include every tourism business.
13        (10) The specific categories of tourism businesses
14    that will pay a transaction charge.     
15        (11) A map showing the district boundaries and benefit
16    zones, if any.
17        (12) A list of the tourism businesses to be subject to
18    a transaction charge, including the address of each
19    business.
20        (13) A statement that a tourism business may pass a
21    transaction charge onto customers, and the specific title
22    to be used when the transaction charge is disclosed to the
23    customer.
24        (14) The name and general structure of the tourism and
25    convention bureau.
26    (b) For purposes of transaction charges in a district



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1plan, the governing body may define categories of businesses
2based upon the degree of benefit each will derive from the
3services and improvements and may impose a different
4transaction charge on each category relative to the degree of
5benefit provided as the governing body may determine.
6    (c) The district plan may also include a statement
7authorizing the issuance of bonds or other debt instruments in
8accordance with the provisions of general laws in the amounts
9and for the periods necessary to finance needed improvements
10within the proposed tourism and recovery district.
11    Section 20. Public hearing.
12    (a) The governing body shall hold a public hearing on the
13proposed district. Notice of the public hearing shall be given
14by the United States mails addressed to the owner of each
15tourism business proposed to pay a transaction charge, as
16shown on the governmental unit's most recent records, and
17shall include the ordinance regarding the governmental unit's
18intent to establish the district. Such notice shall be mailed
19not less than 30 days prior to the public hearing.
20    (b) At the hearing, the governing body shall consider
21public testimony regarding the proposed district. Any tourism
22business proposed to be subject to a transaction charge may
23submit a written objection to the clerk at any time prior to
24the conclusion of the public hearing. If written objections
25are received from tourism businesses that would pay more than



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150% of the proposed transaction charges in the proposed
2district, no further proceedings to form the district may be
3undertaken by the governmental unit for a period of one year.
4The hearing may be adjourned to another date without further
5notice other than a motion to be entered upon the minutes
6fixing the time and place it will reconvene.
7    (c) At the public hearing, the governing body may remove
8territory or tourism businesses from the district, reduce a
9transaction charge rate, or make administrative clarifications
10to the district plan.
11    (d) If, at the conclusion of the public hearing, the clerk
12determines that all of the written objections submitted do not
13represent tourism businesses that would pay more than 50% of
14the proposed transaction charges, the governing body may adopt
15an ordinance forming the district.
16    Section 25. Formation ordinance. If written protests
17submitted do not represent tourism businesses that would pay
18more than 50% of the proposed transaction charges, the
19governing body may adopt an ordinance forming the district.
20The ordinance shall contain:
21        (1) A statement regarding the date of adoption of the
22    ordinance regarding the governmental unit's intent to
23    establish the district.
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 determination as to the total amount of any
2    written protests received from tourism businesses to be
3    subject to a transaction charge.
4        (4) The name of the district.
5        (5) The effective date of the transaction charge.
6        (6) If a specific term is intended, the term of the
7    district.
8        (7) The transaction charge rate to be paid by each
9    type of tourism business in sufficient detail for each
10    business owner to estimate the amount of transaction
11    charge their business would pay.
12        (8) If a specific term is proposed, the proposed term
13    of the district.
14        (9) The name of the tourism and convention bureau.
15        (10) Confirmation that no further appropriation action
16    by the governmental unit will be necessary for the ongoing
17    collection from tourism businesses of transaction charges
18    and the remitting of such transaction charges for the
19    benefit of the tourism and convention bureau throughout
20    the term of the district.
21        (11) Authorization for the governmental unit to remit
22    the collected transaction charges to the tourism and
23    convention bureau in exchange for the tourism and
24    convention bureau providing services.
25    Section 30. Business owners; tourism and convention



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2    (a) A governmental unit may determine if an owner is a
3business owner through use of the governmental unit's records,
4by the business owner's authorized representative, or by any
5other means. The governmental unit has no obligation to obtain
6other information as to the ownership of a tourism business
7and the governmental unit's determination of ownership shall
8be final and conclusive for purposes of this Law.
9    (b) An tourism and convention bureau shall not be
10considered a public agency or entity for any purpose.
11    Section 35. Annual report. Each year, the tourism and
12convention bureau shall submit a report of activities and
13expenditures to the governing body. The report shall be
14submitted no later than 30 days prior to the anniversary of the
15transaction charge start date. The report shall include:
16        (1) A summary of the activities provided in the
17    current year to date.
18        (2) A summary of the expenditures for the current year
19    to date.
20        (3) The amount of any revenue to be carried over from
21    prior years.
22        (4) A list of the directors and officers of the
23    tourism and convention bureau.
24        (5) A list of the accomplishments attributable to the
25    district.



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1    Section 40. Transaction charges; collection and
2remittance. Transaction charges paid by a tourism business
3shall be collected by the governmental unit. On a prompt
4basis, the collected transaction charges shall be remitted by
5the governmental unit to the tourism and convention bureau in
6accordance with the district plan and the formation ordinance.
7During any period that the governmental unit may hold such
8collected transaction charges, the governmental unit shall at
9all times maintain the collected transaction charges in a
10specially-designated fund segregated from other funds; except,
11for the adoption of the formation ordinance, the governmental
12unit may provide for the ongoing retention of an amount not to
13exceed 2% of the total amount of transaction charges collected
14to defray (in whole or in part) the governmental unit's
15administrative costs related to the district.
16    Collected transaction charges held by the governmental
17unit may not be commingled with other governmental unit funds.
18    Section 45. Modification.
19    (a) Upon the written request from the tourism and
20convention bureau, the governmental unit may notice a public
21hearing under Section 20 on modifications to a district for
22any of the following modifications:
23        (1) In any year other than that initial year, a
24    transaction charge rate is proposed to exceed that



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1    described in the district plan.
2        (2) The boundaries of a district are changed.
3        (3) There is a change in designation of tourism
4    businesses subject to the transaction charge and any
5    tourism business pays a new or increased transaction
6    charge.
7    (b) Upon the written request from the tourism and
8convention bureau, the governmental unit may make any
9modifications not described in subsection (a) after holding at
10least one public hearing.
11    (c) Any modification shall be reflected in an updated
12district plan to be on file and available for inspection with
13the clerk.
14    Section 50. Renewal after expiration. If a formation
15ordinance under Section 25 defines a term for the district and
16the district's term expires, the district may be renewed by
17creating a new district plan pursuant to Section 15 and
18following the procedures detailed in Sections 20, 25, and 30.
19Upon expiration when a district is not renewed, any funds
20remaining shall be used in accordance with the district plan
21or refunded to the tourism businesses in equal proportion to
22the amount of transaction charges paid by each tourism
24    Section 55. Termination.



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1    (a) The district shall be terminated by the governing body
2if written objections are received from tourism businesses
3that, in the most recently completed fiscal year, paid (or in
4the case of a district that has not completed a fiscal year
5following the initial imposition of the transaction charges,
6would be expected to pay) more than 50% of the transaction
7charges. Written objections must be signed by the business
8owner and dated within 30 days after their submission to the
9clerk. A public hearing shall be held on the written objection
10within 30 days after the clerk's receipt of the written
11objection. Written objections may be submitted once per year
12in the 30 days following the anniversary of district
14    (b) The district may be terminated by the governing body
15if the governing body finds that there has been a violation of
16law, malfeasance, or misappropriation of funds. After holding
17a noticed hearing, the governing body shall notify the tourism
18and convention bureau to remedy the findings of the governing
19body within 30 days. Such public hearing shall be held and
20notice given to the tourism businesses and the tourism and
21convention bureau not less than 30 days prior to the hearing.
22    If the tourism and convention bureau does not remedy the
23violations within 30 days of notification, or the governing
24body has not approved a plan to remedy the violation, at the
25conclusion of a hearing conducted under this Section, the
26governing body may vote to terminate the district.



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1    (c) Upon termination, any funds remaining shall be used in
2accordance with the district plan or refunded to the tourism
3businesses in equal proportion to the amount of transaction
4charges paid by each tourism business.
5    Section 60. Contesting validity. The validity of a
6transaction charge imposed or a district created under this
7Law may not be contested in any action or proceeding unless the
8action or proceeding is commenced within 30 days after the
9formation ordinance is adopted. Any appeal from a final
10judgment in an action or proceeding shall be concluded within
1130 days after the entry of judgment.
12    Section 65. No limitation on home rule. The powers granted
13to governmental units in this Law shall not be construed as a
14limitation on the powers of a home rule unit granted by Article
15VII of the Illinois Constitution.