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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
AMENDED
tourism marketing authorities
Purpose
Permits a county, one or more municipalities or one or more municipalities and a county with a population of fewer than 2,000,000 persons to establish a tourism marketing authority (Authority) and to levy an assessment on transient lodging rooms within the boundaries of the Authority.
Background
Statute outlines the general powers of a city or town governing body which include: 1) making local improvements by special assessments, by special taxation or otherwise, by ordinance; 2) adopting ordinances for the government of the city or town, its offices and residents; and 3) levying certain taxes (A.R.S. §§ 9-240 and 9-276).
A county board of supervisors may 1) levy tax annually on the taxable property of the county as may be necessary to defray the general expenses and levy other taxes as required by law; and 2) enter into agreements (A.R.S. § 11-251).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Formation of an Authority
1. Allows, on presentation of a petition to form, the governing body of a county, one or more municipalities or one or more municipalities and a county with a population of fewer than 2,000,000 persons to adopt a resolution to form an Authority consisting of the property within the boundaries of the Authority.
2. Requires the petition to form an Authority to include and identify:
a) the geographic boundaries of the Authority;
b) the nonprofit tourism promotion organization that the county or municipality and county, if applicable, will contract with to provide the tourism marketing services for the Authority;
c) a statement indicating that the Authority will provide for the promotion and enhancement of tourism in the Authority;
d) the amount of the assessment, stated in dollars per room per night, on the transient lodging rooms within the Authority boundaries and the transient lodging facilities to be assessed;
e) a description of the Authority's obligation to report annually to the governing body of each municipality and county that is participating in the Authority; and
f) a statement indicating that the Authority may be terminated by petition of the transient lodging room owners or legally authorized representatives, and that the Authority is required to terminate after 10 years unless renewed by further action by petition and approval of one or more of the governing bodies participating in the Authority.
3. Allows the governing body of each participating municipality or county, if a petition to form is signed by the owners or legally authorized representatives of at least 67 percent of the transient lodging rooms within the Authority and includes two or more properties with transient lodging rooms, to approve by affirmative vote the formation of the Authority.
Authority Powers and Duties
4. Requires an Authority to establish, charge and provide for the collection of assessments on transient lodging rooms and allows an Authority to levy an assessment of a maximum of $5 per room sold per night.
5. Authorizes the assessment rate or rates to be tiered based on the average daily room rate for the affected transient lodging.
6. Requires the transient lodging room owner or legally authorized representative to pay the assessment to the Arizona Department of Revenue (ADOR) at the same time as paying the required transaction privilege tax (TPT).
7. Makes, if an owner does not pay TPT, the assessment imposed due and payable to ADOR and delinquent if not paid.
8. Requires the governing body of each municipality and county participating in an Authority, on establishment of the Authority, to:
a) contract with a recognized tourism promotion agency that is a nonprofit corporation exempt from taxation and has been in continuous existence for at least five years, if no such tourism promotion agency exists in the municipality, the municipality may contract with the municipality's tourism promotion office; and
b) enter into intergovernmental agreements for the purposes of supporting the Authority.
9. Requires a contract between a governing body and a tourism promotion agency to provide that the participating municipality and counties will distribute all monies received from assessments to the Authority.
10. Requires the State Treasurer to pay the amount collected from properties within the Authority to the appropriate municipality or county each month beginning with the third calendar month after the date specified in the petition to form.
11. Requires ADOR to separately account for the monies paid relating to Authority's and to deposit the net revenues collected into the state General Fund.
12. Requires the board of an Authority and any municipality or county participating in the Authority to supply ADOR with all requested information necessary to the administration of the Authority.
Authority Governance and Termination or Modification
13. Requires an Authority be governed by the board of directors of the recognized tourism promotion agency with at least one member of one or more of the governing bodies participating in the Authority.
14. Allows an Authority to:
a) employ staff and consultants;
b) reimburse a municipality or county for staff, services and facilities supplied by the municipality or county;
c) enter into contracts; and
d) accept grants.
15. Prohibits an Authority from financing or facilitating the acquisition, maintenance, construction or operation of a hotel, motel, resort or other transient lodging or any sports or entertainment facility.
16. Requires an Authority and its board of directors to maintain the records of the Authority, including records of its accounts showing all monies received and disbursed and its annual budget.
17. Requires an Authority and its board of directors to keep monies and operations separate from the tourism promotion agency's monies and activities.
18. Requires the board of an Authority to comply with public meetings and public records statutes.
19. Requires the board of an Authority to report to the governing bodies at least annually on the activities and expenditures of the Authority and the impacts of the expenditures and activities.
20. Allows for the termination of an Authority at any time on the presentation of a petition signed by the owners or legally authorized representatives of at least 51 percent of the transient lodging rooms within the geographic area of the Authority.
21. Directs the governing body of each participating municipality and county, on receipt of the petition of termination, to terminate its participation in the Authority and to notify ADOR to cease collection of any assessment.
22. Requires an Authority to terminate 10 years after its formation unless one or more municipalities or one or more municipalities and a county by a petition to form and by resolution approve the renewal of the Authority before its termination.
23. Allows, on approval of one or more governing bodies' resolutions, an Authority to renew for 10 additional years and allows for an Authority to be renewed every 10 years thereafter.
Miscellaneous
24. Allows an Authority to be renewed and its boundaries modified if fewer than all of the original entities resolve to renew their participation in the authority and if at least one municipality is included in the Authority.
25. Specifies that the municipal location of a property, in an Authority formed with one or more municipalities, is the same municipality from which ADOR receives the municipal transient lodging tax.
26. Defines terms.
27. Becomes effective on the general effective date.
Amendments Adopted by Committee
1. Requires a petition to form an Authority from the governing body to be signed by the owners of at least 67 percent of the transient rooms, rather than 51 percent, and to include two or more properties.
2. Decreases, from $9 to $5, the maximum allowed assessment collected on transient lodging rooms within the Authority.
Senate Action
FIN 2/19/20 DPA 8-0-2
Prepared by Senate Research
February 20, 2020
MG/AJS/gs