Public Act 102-1127
 
HB0268 EnrolledLRB102 10079 AWJ 15399 b

    AN ACT concerning local government.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 1. Short title. This Act may be cited as the
Tourism Preservation and Sustainability District Act.
 
    Section 5. Definitions. As used in this Act:
    "Benefit zone" means a zone (i) located within a district,
(ii) established by the governing body of the district based
upon the degree of benefit derived from the services to be
provided within the zone, and (iii) in which the governing
body may impose unique transaction charges based on the degree
of benefit intended to be provided.
    "Business owner" means a hotel owner or the hotel owner's
representative.
    "Clerk" means the clerk of a governing body or, if the
governing body has no clerk, the individual designated as the
clerk by the governing body.
    "District" means a tourism preservation and sustainability
district created under this Act.
    "Governing body" means the legislative body of a
governmental unit that establishes a district by resolution of
intent and ordinance under this Act.
    "Governmental unit" means a municipality, county, or
township located in whole or part within the district.
    "Hotel" means any building or buildings in which the
public may, for consideration, obtain living quarters or
sleeping or housekeeping accommodations that will benefit from
a district's services or improvements. "Hotel" includes, but
is not limited to, inns, motels, tourist homes or courts,
lodging houses, rooming houses, retreat centers, conference
centers, and hunting lodges. "Hotel" does not include a
short-term rental.
    "Improvement" means the acquisition, construction,
installation, or maintenance of any tangible property that has
an estimated useful life of 5 years or more and that is
reasonably related to the enhancement of tourism.
    "Local tourism and convention bureau" means either a unit
of local government or a nonprofit corporation (i) that has as
its sole purpose the promotion of tourism; (ii) that is
operating with a paid, full-time staff; (iii) that receives
local hotel or motel tax receipts from one or more
municipalities or counties; (iv) that represents one or more
municipalities or counties; and (v) that either is recognized
by the Department of Commerce and Economic Opportunity as a
certified local tourism and convention bureau or has been in
legal existence as a nonprofit corporation for a minimum of
two years before contracting with a governmental unit to
implement services and improvements in a district.
    "Services" means marketing, promotions, sales efforts,
events, and other activities that are reasonably related to
the enhancement of tourism.
    "Short-term rental" means a single-family dwelling or a
residential dwelling unit in a multi-unit apartment structure,
condominium, cooperative, timeshare, or similar joint property
ownership arrangement that is rented for a fee for less than 30
consecutive days. "Short-term rental" includes a dwelling unit
rented for business travel or recreation.
    "Tourism" means travel by either State residents or
out-of-state visitors traveling away from home overnight in
paid accommodations or on day trips to places away from the
resident's or visitor's home.
    "Transaction charge" means a special charge that is
imposed upon a hotel in a district that is either a fixed
dollar or percentage rate per hotel room per night.
 
    Section 10. Petition and resolution of intent to create a
district.
    (a) To initiate the process of creating a district,
business owners must file a written petition with the clerk of
a governmental unit in which the proposed district lies. The
petition must include a summary of the district plan, which
shall include all of the following:
        (1) the name of the district;
        (2) a map showing the boundaries of the district,
    which need not be contiguous but shall not encompass more
    than 6 counties;
        (3) the initial and maximum rates of the transaction
    charge for hotels within the boundaries of the district;
        (4) the length of the proposed term of the district,
    not to exceed 5 years upon formation or 10 additional
    years upon each renewal;
        (5) a brief description of the services and
    improvements proposed to be provided by the local tourism
    and convention bureau;
        (6) information specifying where the complete district
    plan can be obtained by the governing body; and
        (7) information specifying that the complete district
    plan shall be furnished to the governing body upon
    request.
    The business owners that file the petition under
subsection (a) must certify on the petition that they believe
they will pay more than 50% of the transaction charges
proposed to be levied by the district, as determined by the
last 12 months of State hotel operators' occupation taxes paid
preceding the date of the petition, for the proposed district.
    Petitions may be filed with a county clerk only if more
than 50% of the land within the county is included in the
district.
    (b) Within 60 days after the filing of the written
petition under subsection (a), the governing body may adopt a
resolution that expresses the intention to create the district
proposed in the written petition. The resolution of intent
shall include the following information:
        (1) the name of the district;
        (2) a description of the boundaries of the district,
    which need not be contiguous but shall not encompass more
    than 6 counties;
        (3) the initial and maximum rates of the transaction
    charge for hotels within the boundaries of the district;
        (4) the length of the proposed term of the district,
    not to exceed 5 years upon formation or up to 10 additional
    years upon each renewal;
        (5) a brief description of the services and
    improvements proposed to be provided by the district;
        (6) the time and place of a public hearing on the
    formation of the proposed district; and
        (7) a statement that any hotel proposed to be subject
    to a transaction charge has the opportunity to be heard at
    the public hearing regarding the district formation and an
    opportunity to file objections to the district formation
    with the clerk at any time prior to the conclusion of the
    public hearing.
 
    Section 15. District plan. A district plan shall be
prepared by the business owners who submitted the petition
under Section 10 before the public hearing on the proposed
district. The district plan shall include or identify the
following:
    (1) the estimated annual budget of the district, which may
include specific allocations to expedite the recovery of the
tourism industry;
    (2) the initial and maximum rates of the transaction
charge for each business that will be subject to the
transaction charge, in sufficient detail for each of those
business owners to estimate the amount of transaction charges
for which each hotel would be responsible;
    (3) the method for calculating the transaction charge;
    (4) a statement that, after the first imposition of a
transaction charge within the district, the transaction charge
may continue to be imposed until the end of the district's term
without the requirement of an additional public hearing if the
transaction charge rate does not exceed the rate specified in
the district plan;
    (5) the frequency and manner that the governmental unit
shall collect the transaction charges;
    (6) the frequency and manner that the governmental unit
shall remit the transaction charges to the local tourism and
convention bureau;
    (7) the name of the district;
    (8) the manner by which a business owner may contest the
calculation of the transaction charge;
    (9) the amount or rate of penalties and interest
applicable to delinquent payments, if any, and the method of
collection of penalties and interest;
    (10) a description of the proposed services and
improvements to be provided;
    (11) a map that depicts the district's proposed boundaries
but need not depict every hotel;
    (12) a map showing the district's benefit zones, if any;
    (13) a statement that a hotel may pass a transaction
charge onto customers and the specific title to be used when
the transaction charge is passed on to the customer;
    (14) the name and general structure of the local tourism
and convention bureau proposed to receive and use the revenues
of the transaction charges for the proposed services and
improvements; and
    (15) the term of the district, which shall not exceed 5
years upon formation or 10 additional years upon each renewal.
 
    Section 20. Territory of other governmental units in a
district.
    (a) Except as provided in subsection (b), if the proposed
district's boundaries include territory of a governmental unit
other than the governmental unit in which the petition was
filed under Section 10, the governmental unit in which the
petition was filed must enter into an intergovernmental
agreement with the other governmental unit authorizing, on
mutually agreed terms, the governmental unit in which the
petition was filed to form or renew the district and to perform
any action authorized under this Act.
    (b) If a petition under Section 10 is filed with the clerk
of a municipality and the proposed district boundaries do not
extend beyond the boundaries of the municipality, the
municipality may form or renew the district without an
intergovernmental agreement with a county or township that has
territory within the municipality.
    If a petition under Section 10 is filed with the clerk of a
township and the proposed district boundaries do not extend
beyond the boundaries of the township, the township may form
or renew the district without an intergovernmental agreement
with the county in which the township lies, but the township
must enter into an intergovernmental agreement with any
municipality that has territory within the township.
    If a petition under Section 10 is filed with the clerk of a
county and the proposed district boundaries are solely within
the county, the county may form or renew the district without
an intergovernmental agreement with any municipalities or
townships with territory within the county. If a petition
under Section 10 is filed with the clerk of a county and the
proposed district boundaries includes portions of another
county, the county in which the petition was filed must only
enter into an intergovernmental agreement with the county or
counties in which the other territory is situated in order to
form or renew a district.
 
    Section 25. Public hearing.
    (a) The governing body shall hold a public hearing on the
proposed district at the day and time indicated in the
resolution of intent. The governing body shall give notice of
the public hearing by United States mail to each governmental
unit within the district and each business owner that may be
subjected to a transaction charge, based on the governmental
unit's most recent records. The notice shall include the
resolution of intent and the name, address, email address, and
phone number of the clerk of the governing body, and it shall
be mailed not less than 30 days before the public hearing.
    (b) At the hearing, the governing body shall consider
public testimony regarding the proposed district. Any business
owner that may be subjected to a transaction charge may submit
a written objection to the formation of the district to the
clerk at any time before voting has begun on the formation
ordinance. If written objections are received from hotels that
would pay 50% or more of the proposed transaction charges in
the proposed district, as determined by the last 12 months of
State hotel operators' occupation taxes paid preceding the
date of the petition, the hearing shall end and no further
proceedings to form a district may be undertaken by the
governmental unit for a period of one year from the date of the
hearing.
    The hearing may be adjourned to another date without
further notice, other than a motion to be entered upon the
minutes fixing the time and place the governing body will
reconvene.
    (c) At the public hearing, the governing body may remove
territory or hotels from the district that will not benefit
from the district's services or improvements, reduce a
transaction charge rate, or make administrative clarifications
to the district plan.
    (d) If, at the conclusion of the public hearing, the clerk
determines that the written objections submitted under
subsection (b) do not represent hotels that would pay 50% or
more of the proposed transaction charges, as determined by the
last 12 months of State hotel operators' occupation taxes paid
preceding the date of the petition, then the governing body
may adopt an ordinance forming the district under Section 30.
 
    Section 30. Formation ordinance; management of funds.
    (a) The formation ordinance shall contain:
        (1) the date the district is established;
        (2) a reference to the district plan, which shall be
    on file and available for inspection with the clerk;
        (3) a statement that the clerk determined that the
    total amount of written objections received from hotels
    that will be subjected to a transaction charge did not
    represent hotels that would pay 50% or more of the
    proposed transaction charges, as determined by the last 12
    months of State hotel operators' occupation taxes paid
    preceding the date of the petition;
        (4) the name of the district;
        (5) the effective date of the transaction charge;
        (6) the term of the district, not to exceed 5 years
    upon formation or up to 10 additional years upon each
    renewal;
        (7) a description of the boundaries of the district,
    which need not be contiguous but shall not encompass more
    than 6 counties;
        (8) the name of the local tourism and convention
    bureau and authorization for the governmental unit to
    remit the collected transaction charges to the local
    tourism and convention bureau in exchange for the local
    tourism and convention bureau providing services and
    improvements; and
        (9) the amount, if any, that the governmental unit
    will retain of the total amount of transaction charges
    collected to defray (in whole or in part) the governmental
    unit's administrative costs related to the district, in an
    amount not more than 2% of the collected transaction
    charges.
    (b) Before a tourism and convention bureau may receive
transaction charges under this Act, the tourism and convention
bureau must be organized as follows:
        (1) for a local tourism and convention bureau that is
    a unit of local government that does not have a nonprofit
    corporation existing on the date the formation ordinance
    is adopted, the local tourism and convention bureau must
    create a nonprofit corporation solely for purposes of this
    Act and that corporation's certificate of incorporation or
    bylaws must provide that the Board of Directors of the
    nonprofit corporation must be composed of the business
    owners subject to the transaction charge, or their
    designees, and the Board of Directors shall be responsible
    for managing funds raised by the district for the local
    tourism and convention bureau, which shall fulfill the
    obligations of the district plan; or
        (2) for a local tourism and convention bureau that is
    a nonprofit corporation, the local tourism and convention
    bureau must create a committee composed of the business
    owners subject to the transaction charge, or their
    designees, and the committee shall be responsible for
    managing funds raised by the district and fulfilling the
    obligations of the district plan.
 
    Section 35. Baseline funding and services. The funds for
services and improvements that are provided to a local tourism
and convention bureau for purposes of this Act shall be
considered supplemental funding and services and shall not
supplant existing funding or services provided by the State or
any unit of local government.
 
    Section 40. Annual report.
    (a) Each year, a local tourism and convention bureau that
receives transaction charges shall submit to the governing
body a report of the bureau's activities and expenditures. The
report shall be submitted no later than 30 days after the
anniversary of the date upon which the transaction charge is
first imposed. The report shall include:
        (1) a summary of the activities provided in the
    previous year through use of the transaction charges;
        (2) a summary of the expenditures for the previous
    year showing the use of the transaction charges;
        (3) the amount of any revenue from transaction charges
    to be carried over from prior years;
        (4) a list of the directors and officers of the local
    tourism and convention bureau; and
        (5) a list of the accomplishments, improvements, and
    services attributable to the district.
    (b) The governing body shall also submit to the Department
of Commerce and Economic Opportunity, no later than 60 days
after the anniversary of the date upon which the transaction
charge is first imposed, the annual report provided by the
local tourism and convention bureau and a report of the amount
of total revenue received from the transaction charges and how
much the governmental unit, if any, withheld for
administrative costs related to the district under the
district plan.
 
    Section 45. Modification.
    (a) Upon a written request from business owners whose
hotels pay the majority of the transaction charges proposed to
be levied by a district, as determined by the last 12 months of
State and local taxes paid from the date of the written
request, the governing body of the district shall, after
providing notice, hold a public hearing as provided in Section
25 for modifications to the district for any one or more of the
following purposes:
        (1) to increase, in any year other than the initial
    year, the rate of a transaction charge to an amount
    exceeding the maximum rate described in the district plan;
        (2) to change the boundaries of the district; or
        (3) for any other purpose that is agreed to by the
    governing body.
    (b) Any modification shall be reflected in an updated
district plan to be on file and available for inspection with
the clerk.
    (c) If the governmental unit is a county, the county may
not modify the district boundaries to include less than 50% of
the land within the county.
 
    Section 50. Transaction charges; collection and
remittance. Transaction charges paid by a hotel shall be
collected by the governmental unit that passed the ordinance
creating the district. The collected transaction charges shall
be remitted on a prompt basis by the governmental unit that
passed the ordinance creating the district to the local
tourism and convention bureau in accordance with the district
plan and the formation ordinance. During any period that the
governmental unit that passed the ordinance creating the
district may hold the collected transaction charges, the
governmental unit shall at all times maintain the collected
transaction charges in a specially designated fund segregated
from all other funds.
    Collected transaction charges held by the governmental
unit that passed the ordinance creating the district may not
be commingled with other funds of the governmental unit or
units.
    A transaction charge may not exceed 5% of the hotel room
rate per occupied hotel room per night and may not be imposed
upon any customer transactions at restaurants or for food,
drinks, or merchandise. In addition, a transaction charge may
not be charged for the rental of hotel rooms to a permanent
occupant of a hotel. As used in this paragraph, "permanent
occupant" means a person or company that occupies or has the
right to occupy a hotel room for at least 30 consecutive days.
 
    Section 55. Renewal. Before a district's term expires, the
district may be renewed by following the petition process
outlined in Section 10, creating a new district plan under
Section 15, and adopting a new formation ordinance following
the procedures detailed in Sections 25, 30, and 35 on or before
the date the district's term expires. The governmental unit
that passed the ordinance creating the district must enter
into, amend, or extend all intergovernmental agreements, if
applicable, as required by Section 20 before renewing a
district.
    If the district's term expires, any funds remaining from
transaction charges shall be used in accordance with the
district plan or refunded to the hotels in equal proportion to
the amount of transaction charges paid by each hotel.
 
    Section 60. Termination.
    (a) The governing body of a district may initiate
termination of the district by either of the following
methods:
        (1) The governing body may hold a public hearing to
    determine if there has been a violation of law,
    malfeasance, or misappropriation of funds.
        (2) If written objections are filed with the clerk
    from the business owners that, in the most recently
    completed fiscal year, paid 50% or more of the transaction
    charges or if, in the case of a district that has not
    completed a fiscal year, written objections are received
    from business owners that paid 50% or more of the
    transaction charges following the initial imposition of
    the transaction charges would be expected to pay, as
    determined by the last 12 months of State hotel operators'
    occupation taxes paid, then the governing body may hold a
    public hearing within 45 days after the anniversary of the
    district's formation to discuss the written objections. A
    written objection under this paragraph must be signed by
    the business owner and dated within 30 days before
    submission to the clerk and must contain a statement as to
    why the district should be terminated. Written objections
    under this paragraph may be submitted only during the 30
    days before the anniversary of the district's formation.
    (b) After holding a hearing under paragraph (1) of
subsection (a) at which the governing body finds that there
has been a violation of law, malfeasance, or misappropriation
of funds, the governing body shall: (i) notify the local
tourism and convention bureau to remedy the violation within
30 days; or (ii) either in the public meeting held under
paragraph (1) of subsection (a) or a separate public meeting,
approve a plan for the local tourism and convention bureau to
remedy violations. If the local tourism and convention bureau
does not remedy the violations within 30 days after
notification or the violations are not remedied according to
the governing body's plan to remedy the violation, the
governing body may terminate the district by ordinance or
resolution.
    In a hearing under paragraph (2) of subsection (a), the
governing body shall determine if the reasons for termination
in the written objections justify termination of the district
and, if the governing body finds that the reasons do justify
termination, may terminate the district by ordinance or
resolution.
    (c) A public hearing held under this Section shall be held
only after notice has been given to the business owners and the
local tourism and convention bureau not less than 30 days
before the hearing.
    (d) Upon termination, any funds remaining shall be used by
the local tourism and convention bureau in accordance with the
district plan or refunded to the hotels in equal proportion to
the amount of transaction charges paid by each hotel, as
required by the governing body in the ordinance or resolution
terminating the district.
 
    Section 65. Contesting validity. The validity of a
district created, district plan established, or transaction
charge imposed under this Act may not be contested in any
action or proceeding unless the action or proceeding is
commenced within 30 days after the formation ordinance is
adopted or, with respect to modifications to a district plan,
within 30 days after a district plan has been modified. If a
party appeals a final judgment, the party filing the appeal
shall request discretionary acceleration under Supreme Court
Rule 311(b).
 
    Section 70. No limitation on home rule. The powers granted
to a governmental unit in this Act are not a limitation on the
powers of a home rule unit granted by Article VII of the
Illinois Constitution.
 
    Section 75. Special service areas and business improvement
districts. Nothing in this Act prevents a tourism preservation
and sustainability district from sharing area with a special
service area or a business improvement district.
 
    Section 80. Hotel operator's occupation tax information.
Upon request of a governmental unit for information relating
to the amount of State hotel operators' occupation taxes paid
by hotels within a proposed or existing tourism preservation
and sustainability district, the Department of Revenue shall
provide information or documents to the governmental unit so
that the governmental unit may determine State hotel
operators' occupation taxes paid as needed under this Act. The
Department shall make available to the governmental unit
information contained on transaction reporting returns
required to be filed under Section 6 of the Hotel Operators'
Occupation Tax Act that report the amount of rental receipts
received within the proposed or existing tourism preservation
and sustainability district. The disclosure shall be made
pursuant to a written agreement between the Department and the
governmental unit, which is an official purpose within the
meaning of Section 11 of the Retailers' Occupation Tax Act.
The written agreement between the Department and the
governmental unit shall provide for reciprocity, limitations
on access, disclosure, and procedures for requesting
information. Information so provided shall be subject to all
confidentiality provisions of Section 11 of the Retailers'
Occupation Tax Act.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 2/10/2023