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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
tourism marketing authorities
Purpose
An emergency measure that authorizes specified local governments to form a tourism marketing authority (tourism authority). Requires a tourism authority to levy an assessment on transient lodging rooms.
Background
Statute outlines the general powers of a city or town governing body which include: 1) adopting ordinances for the government of the city or town, its offices and residents; 2) levying taxes authorized by statute; and 3) making local improvements by special assessments, special taxation or otherwise as prescribed by ordinance (A.R.S. §§ 9-240 and 9-276).
A county board of supervisors' powers include: 1) levying an annual tax on the taxable county property as necessary to defray general expenses and levying other taxes as required by law; and 2) entering into agreements for statutory purposes (A.R.S. § 11-251).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Formation, Termination and Modification
1. Authorizes the governing bodies of the following entities, on presentation of a petition, to adopt a resolution to form a tourism authority consisting of the property within the tourism authority's corporate boundaries:
a) a county with a population of fewer than 2,000,000 persons;
b) one or more municipalities; or
c) one or more municipalities and a county with a population of fewer than 2,000,000 persons.
2. Authorizes the governing body of a participating local government to approve by affirmative vote the formation of a tourism authority if a petition:
a) is signed by the owners or legal representatives of at least 67 percent of the transient lodging rooms within the tourism authority; and
b) includes at least two properties with transient lodging rooms.
3. Establishes a tourism authority on approval of each participating local government.
4. Requires, on establishment of a tourism authority, the governing body of each participating local government to:
a) contract with a recognized, tax-exempt nonprofit tourism promotion agency within the local government that has been in continuous existence for at least five years, or at least two years if there is no agency that has been in continuous existence for five years; and
b) enter into intergovernmental agreements to support the tourism authority.
5. Allows a municipality or county to contract with the municipality's tourism promotion office or the county's tourism promotion office if there is no recognized tourism promotion agency in the municipality or county.
6. Requires a formation petition to include and identify:
a) the geographic boundaries of the tourism authority;
b) the nonprofit tourism promotion organization that the county, municipalities, or county and municipalities will contract with to provide tourism marketing services;
c) a statement that the tourism authority will promote and enhance tourism in the tourism authority;
d) the amount to be assessed, in dollars per room per night, on the transient lodging rooms within the tourism authority and the transient lodging facilities to be assessed;
e) a description of the tourism authority's obligation to annually report to the governing body of each participating local government; and
f) a statement that the tourism authority may be terminated by petition of the transient lodging room owners or legally authorized representatives, and that the tourism authority terminates after 10 years unless renewed by further action by petition to and approval of at least one of the participating governing bodies.
7. Allows a tourism authority to terminate at any time on presentation of a petition signed by the owners or legal representatives of at least 51 percent of the transient lodging rooms in the authority.
8. Directs the governing body of each local government to terminate its participation in a tourism authority on receipt of the petition to terminate, and to notify the Arizona Department of Revenue (ADOR) to cease collection of any assessment.
9. Terminates a tourism authority 10 years after formation unless the participating local governing bodies approve renewal of the tourism authority by petition and by resolution before its termination.
10. Allows the county, a municipality or, if the original entities consisted of municipalities and counties, at least one municipality to renew a tourism authority with modified boundaries if fewer than all of the original entities resolve to renew.
11. Specifies the renewal term is 10 years.
Assessment
12. Requires a tourism authority to establish, charge and collect assessments on transient lodging rooms in the authority, subject to a cap of five dollars per room per night.
13. Allows the assessment rate or rates to be tiered based on the average daily room rate for the affected transient lodging.
14. Requires the transient lodging room owner or legal representative to pay the assessment to ADOR at the same time as paying transaction privilege tax (TPT).
15. Requires ADOR to:
a) separately account for monies paid for tourism authority assessments and deposit the net revenues collected in the state General Fund; and
b) report the amount of assessment monies collected to the State Treasurer.
16. Requires the State Treasurer to monthly transmit the amount collected from properties in the tourism authority to the municipality or county treasurer, or officer exercising the functions of the treasurer, beginning the third calendar month after the date specified in the petition for the authority.
17. Requires the contract between a governing body and a tourism promotion agency to provide that a participating local government must distribute all assessment monies to the tourism authority.
18. Deems, if the owner does not pay the TPT for any reason, the assessment as imposed and payable to ADOR, and as delinquent if not paid, in the same manner as TPT.
19. Specifies that the municipal location of a property, in a tourism authority formed with one or more municipalities, is the same municipality from which ADOR receives the municipal transient lodging tax.
20. Requires a tourism authority board of directors (tourism authority board) and any participating local government to supply ADOR and the State Treasurer with all requested information necessary to administer the assessment.
Tourism Authority Governance
21. Requires a tourism authority to be governed by the board of directors of the tourism promotion agency, with at least one member of one or more of the governing bodies participating in the authority.
22. Allows a tourism 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.
23. Prohibits a tourism 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.
24. Requires a tourism authority and its tourism authority board to:
a) maintain tourism authority records, including account records showing monies received and disbursed and its annual budget; and
b) keep monies and operations separate from the tourism promotion agency's monies and activities.
25. Requires a tourism authority board to comply with statutory requirements relating to public meetings and public records.
26. Requires a tourism authority board to at least annually report to the participating governing bodies on tourism authority activities and expenditures and the impacts of the expenditures and activities.
Miscellaneous
27. Defines terms.
28. Becomes effective on signature of the Governor if the emergency clause is enacted.
Prepared by Senate Research
January 25, 2021
LB/kja