HSB 734 (LSB 6567YC (1) 91)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON NORDMAN)

A BILL FOR

An Act authorizing cities to establish self-supported tourism improvement districts.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  358D.1  Definitions.
   As used in this chapter, unless the context requires otherwise:
   1.  “Activities” includes but is not limited to all of the following that benefit lodging businesses in the district:
   a.  Promotion of public events.
   b.  Promotion of tourism within the district.
   c.  Promotion of business activities. 
   d.  Marketing and tourism-related economic development, including but not limited to lodging business retention and recruitment. 
   e.  Workforce development. 
   f.  Other services provided for the purpose of conferring benefits upon assessed lodging businesses located in the district.
   2.  “Assessment” means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to lodging businesses located within a self-supported tourism improvement district.
   3.  “Benefit zone” means a subunit of a district plan that may have a different assessment. 
   4.  “Clerk” means the city clerk, township clerk, or an employee of a county designated by the county board of supervisors.
   5.  “District” means a means a self-supported tourism improvement district established pursuant to this chapter.
   6.  “District plan” or “plan” means a plan that complies with section 358D.3, subsection 3.
   7.  “Hosting platform” means a person or entity who collects or receives a fee, directly or indirectly, for conducting a booking transaction using any medium of facilitation, including an internet-based platform.
   8.  “Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more designed to benefit assessed lodging businesses. 
   9.  “Local governing body” means the city council of a city, the board of supervisors of a county, or the board of trustees of a township. 
   10.  “Lodging” means the same as defined in section 423A.2.
   11.  “Lodging business” means any type of business engaged in lodging.
   12.  “Lodging business owner” or “owner” means any person recognized by the municipality as the owner of the lodging business. The local governing body has no obligation to obtain other information as to the ownership of the lodging business, and the municipality’s determination of ownership shall be final and conclusive for the purposes of this subsection. Wherever this chapter requires the signature of the lodging business owner, the signature of the authorized agent of the lodging business owner shall be sufficient.
   13.  “Municipality” means a city, county, or township.
   14.  “Ordinance” means an ordinance adopted by a city or county or a resolution adopted by a township.
   15.  “Owners’ association” means a private nonprofit corporation that is under contract with a municipality to administer or implement improvements and activities specified in the district plan. An owners’ association may be an existing nonprofit corporation or a newly formed nonprofit corporation. An owners’ association is a private entity and shall not be considered a public entity for any purpose, nor shall the owners’ association’s board members or staff be considered to be public officials for any purpose. If an existing nonprofit corporation is designated as the owners’ association, the existing nonprofit corporation shall establish a self-supported tourism improvement district committee comprised solely of lodging business owners paying the self-supported tourism improvement district assessment, which shall manage the expenditure of revenues derived from the levy of assessments, pursuant to this chapter. If a newly formed nonprofit corporation is designated as the owners’ association, the board of directors must be comprised entirely of lodging business owners paying the self-supported tourism improvement district assessment.
    Sec. 2.  NEW SECTION.  358D.2  Authorization.
   A local governing body which proposes to create a district, to provide for its existence and operation, to provide for activities or improvements for the district, to authorize and issue bonds for the purposes of the district, and to levy the assessments authorized by this chapter must do so in accordance with the provisions of this chapter.
    Sec. 3.  NEW SECTION.  358D.3  Establishment of district.
   1.  Districts may be created by action of the local governing body in accordance with the provisions of this chapter. All of the following shall apply to a district, as applicable: 
   a.  A city or township shall not establish a district within the unincorporated area of a county without the consent of the board of supervisors of the county. A city or township shall not establish a district within the jurisdiction of another city or township without the consent of that city council or board of township trustees. A county shall not establish a district within the jurisdiction of another county without the consent of that county’s board of supervisors. However, a county may establish a district within a city or township located within the county without requiring consent from the city council or board of township trustees.
   b.  The boundaries of a district created pursuant to this chapter may overlap with other districts established pursuant to other provisions of law, or other districts created in this chapter. 
   c.  The local governing body may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone, and may impose a different assessment within each benefit zone. The local governing body may also define categories of lodging businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of lodging business, or on each category of lodging business within each zone.
   d.  The local governing body may levy assessments on lodging businesses pursuant to this chapter. The local governing body shall structure the assessments as a fixed amount, rate per transaction, fixed rate per transaction per day, percentage of sales, any combination of these methods, or in whatever manner it determines corresponds with the distribution of benefits from the proposed improvements and activities.
   e.  The collection of the assessments levied pursuant to this chapter shall be made at the time and in the manner set forth by the local governing body in the ordinance levying the assessment. All assessments levied pursuant to this chapter may be subject to interest and penalties.
   f.  Assessments levied pursuant to this chapter shall be levied on the basis of the estimated benefit to the lodging businesses within the self-supported tourism improvement district. 
   g.  District funds allocated for the activities and improvements in the plan are intended to be supplemental to existing funding for tourism promotion. The municipality shall not reduce any existing funding as a result of a self-supported tourism improvement district.
   2.  Upon the submission of a written petition, signed by the lodging business owners in the proposed district who will pay more than fifty percent of the assessments proposed to be levied, the local governing body shall conduct a public hearing on the establishment or extension of the self-supporting tourism improvement district. The petition must include a summary of the district plan. That summary must include all of the following:
   a.  A map showing the boundaries of the district.
   b.  Information specifying where the complete district plan may be obtained.
   c.  Information specifying that the complete district plan shall be furnished upon request.
   3.  The district plan must include but is not limited to all of the following:
   a.  A map of the district in sufficient detail to locate each lodging business within the district. The map must identify the district boundaries in sufficient detail to allow a lodging business owner to reasonably determine whether a lodging business is located within the district boundaries. 
   b.  The name of the proposed district.
   c.  A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected lodging businesses included, which may be made by reference to any plan or map that is on file with the clerk. 
   d.  The improvements and activities proposed for each year of operation of the district and the estimated cost. If the improvements and activities proposed for each year of operation are the same, a description of the first year’s proposed improvements and activities and a statement that the same improvements and activities are proposed for subsequent years shall satisfy the requirements of this paragraph.
   e.  The total estimated annual amount proposed to be expended for improvements or activities, and debt service in each year of operation of the district. The amount may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this paragraph.
   f.  The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each lodging business owner to estimate the amount of the assessment to be levied against the lodging business owner’s lodging business.
   g.  A statement specifying whether bonds will be issued to finance improvements.
   h.  The time and manner of collecting the assessments. The plan may require hosting platforms to collect the assessment. 
   i.  The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be ten. Upon renewal, the maximum number of years shall be twenty. Notwithstanding these limitations, a district created pursuant to this chapter that issues bonds to finance improvements may levy assessments until the maximum maturity of the bonds. The district plan may set forth specific increases in assessments for each year of operation of the district.
   j.  The proposed time for implementation and completion of the district plan.
   k.  Any proposed rules and regulations to be applicable to the district.
   l.  A statement that an owners’ association will administer or implement improvements and activities specified in the district plan. The municipality shall contract with the owners’ association to provide services and improvements.
   m.  Any other item or matter required to be incorporated therein by the local governing body.
   4.  At least thirty days before the hearing pursuant to this chapter, the clerk shall send a notice by mail to the lodging business owners proposed to be assessed. The notice must state the following:
   a.  A general description of the improvements and activities of the district. 
   b.  A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected lodging businesses included, which may be made by reference to any plan or map that is on file with the clerk. 
   c.  A description of the proposed assessment rate or method of determining the assessment. 
   d.  The time and place when and where the local governing body will hear all complaints or protests made in writing or verbally to the proposed assessments.
   e.  Prominently state the place, date, and time of the local governing body hearing on the establishment of the proposed district.
   5.  A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the public hearing. The clerk may waive any irregularity in the form or content of any written protest. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest shall contain a description of the lodging business in which the person supporting the protest has an interest in a manner sufficient to identify the lodging business and, if a person is not shown on the official records of the municipality as the owner of the lodging business, the protest shall contain or be accompanied by written evidence that the person supporting the protest is the owner of the lodging business or the authorized agent. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protests are received from the owners or authorized agents of lodging businesses in the proposed district that will pay fifty percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than fifty percent, no further proceedings to levy the proposed assessment against such lodging businesses shall be taken for a period of one year from the date of the finding of a majority protest by the local governing body.
   6.  At the conclusion of the public hearing to establish the district, the local governing body may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing all of the assessments. At the public hearing, the local governing body may only make changes in, to, or from the boundaries of the proposed self-supported tourism improvement district that will exclude territory that will not benefit from the proposed improvements and activities. 
   7.  If the local governing body, following the public hearing, decides to establish a proposed self-supported tourism improvement district, the local governing body shall adopt an ordinance that shall include but is not limited to all of the following:
   a.  A brief description of the proposed improvements and activities.
   b.  The amount of the proposed assessment.
   c.  A statement on whether bonds will be issued.
   d.  A description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if the descriptions and statements enable an owner to generally identify the nature and extent of the improvements and activities and the location and extent of the proposed district.
   e.  The time and place where the public hearing was held concerning the establishment of the district.
   f.  A determination regarding any protests received. The municipality shall not establish the district or levy assessments if a majority protest was received pursuant to this chapter.
   g.  A statement that the district established by the ordinance shall be subject to any amendments to this chapter.
   h.  A statement that the improvements and activities to be conferred on lodging businesses in the district will be funded by the levy of the assessments. 
   i.  A finding that the lodging businesses within the area of the self-supported tourism improvement district will benefit by the improvements and activities funded by the proposed assessments.
   8.  If the lodging business owners or authorized representatives within the proposed district that collectively represent fifty percent or more of the proposed district that will pay fifty percent or more of the assessments proposed to be levied file written objections to the establishment of the district with the clerk of the municipality within thirty days after the ordinance levying the assessment is adopted pursuant to subsection 7, the municipality shall not establish the district or levy assessments. The clerk may waive any irregularity in the form or content of any written objection. A written objection may be withdrawn in writing at any time before the conclusion of the thirty-day period. Each written objection shall contain a description of the lodging business in which the person supporting the objection has an interest in that is sufficient to identify the lodging business and, if a person supporting the objection is not shown on the official records of the municipality as the owner of the lodging business, the objection shall contain or be accompanied by written evidence that the person supporting the objection is the owner of the lodging business or the authorized representative. A written objection that does not comply with this subsection shall not be counted in determining a majority written objection. 
   9.  The validity of an assessment levied under this chapter shall not be contested in an action or proceeding unless the action or proceeding is commenced within thirty days after the ordinance levying the assessment is adopted pursuant to this chapter. An appeal from a final judgment in an action or proceeding shall be perfected within thirty days after the entry of judgment.
    Sec. 4.  NEW SECTION.  358D.4  Renewal.
   1.  If a self-supported tourism improvement district expires due to the time limit set pursuant to section 358D.3, subsection 3, a new district plan may be created and the district may be renewed pursuant to this chapter.
   2.  Any district’s term that has expired, or is about to expire in the near future, may be renewed by following the same procedures for the establishment of a district as provided in this chapter.
   3.  Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional lodging businesses not included in the prior district, the remaining revenues shall be spent to benefit only the lodging businesses in the prior district. If the renewed district does not include lodging businesses included in the prior district, the remaining revenues attributable to these lodging businesses shall be spent consistent with the prior district plan.
   4.  Upon renewal, a district shall have a term not to exceed twenty years or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district.
    Sec. 5.  NEW SECTION.  358D.5  Modification.
   1.  The owners’ association may, at any time, request that the local governing body modify the district. Any modification of the district shall be made pursuant to this section. 
   2.  Upon the written request of the owners’ association, the local governing body may modify the district after conducting one public hearing on the proposed modifications. 
   3.  If the modification includes the levy of a new or increased assessment, the local governing body shall comply with section 358D.3, subsections 4 and 5. 
   4.  For modifications that do not include the levy of a new or increased assessment, the clerk shall send a notice of the public hearing on the proposed modification by mail to the lodging business owners proposed to be assessed. The notice must state:
   a.  A general description of the proposed modification.
   b.  The place, date, and time of the local governing body hearing pursuant to, subsection 2, which shall be held at least thirty days after the date of mailing of the notices. 
   5.  Any modification shall be reflected in an updated district plan to be on file and available for inspection with the clerk.
    Sec. 6.  NEW SECTION.  358D.6  Bonds.
   1.  a.  The local governing body may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the ordinance adopted pursuant to section 358D.3, subsection 7. 
   b.  The resolution adopted pursuant to this section shall generally describe the proposed improvements specified in the ordinance adopted pursuant to section 358D.3, subsection 7, set forth the estimated cost of those improvements, and specify the number of annual installments and the fiscal years it will take to pay off the bonds.
   2.  Notwithstanding any other provision of this chapter, assessments levied to pay the principal and interest on any bond issued pursuant to this chapter shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt.
    Sec. 7.  NEW SECTION.  358D.7  Annual reports.
   1.  The owners’ association shall prepare a report for each fiscal year, except the first fiscal year, for which assessments are to be levied and collected to pay the costs of the improvements and activities described in the report. The owners’ association’s first report shall be due three months after the last day of the first year of operation of the district, and on that day each year thereafter the district is in operation. 
   2.  The report shall be filed with the clerk and shall refer to the self-supported tourism improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information:
   a.  Improvements and activities that were provided in the previous fiscal year.
   b.  An estimate of the cost of providing the improvements and activities for the previous fiscal year.
   c.  The estimated amount of any surplus or deficit from the previous fiscal year. The amount of surplus or deficit shall be calculated based on subtracting the previous year’s expenditures from the revenues of the previous year.
   d.  Any proposed changes to the assessment or improvements or activities that are authorized in accordance with the district plan. 
   3.  The local governing body may approve the report as filed by the owners’ association. 
    Sec. 8.  NEW SECTION.  358D.8  Repeal.
   1.  Any district established or extended pursuant to the provisions of this chapter, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be repealed by the local governing body in either of the following circumstances:
   a.  If the local governing body finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, the local governing body shall provide notice to the public about the hearing on the proposed repeal.
   b.  During the operation of the district, there shall be a thirty-day period each year in which assessed lodging businesses may request repeal of the establishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for thirty days. The next such thirty-day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a thirty-day period. Upon the written petition of the owners or authorized representatives of lodging businesses in the district who pay fifty percent or more of the assessments levied during the thirty-day period, the local governing body provide notice of the proposed repeal, and shall hold a hearing about the proposed repeal.
   2.  The local governing body shall hold a public hearing to repeal the district. The notice of the hearing on repeal required by this chapter shall be given by mail to the owner of each lodging business subject to assessment in the district, as appropriate. The municipality shall conduct the public hearing not less than thirty days after mailing the notice to the lodging business owners. 
   3.  Upon repeal or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be expended consistent with the district plan. 
    Sec. 9.  NEW SECTION.  358D.9  Independent provisions.
   1.  This chapter provides an alternative method of financing certain improvements and activities. The provisions of this chapter shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. 
   2.  Any provision of this chapter that conflicts with any other provision of law shall prevail over the other provision of law as to districts created under this chapter.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill authorizes a self-supported tourism improvement district (district).
   The bill allows a levy (assessment) upon lodging businesses for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to lodging businesses located within the district.
   The bill defines “activities” to include promotion of public events, promotion of tourism within the district, promotion of business activities, marketing, workforce development, and other related services.
   The district is created by action of the local governing body where the district is located. The bill establishes specific criteria including a map of the area that would comprise the district, the rate and structure of the assessment, and the expiration of the district. The assessments shall be assessed on the basis of the estimated benefit to the lodging business within the district.
   A protest of a district plan may be made by any interested person, and the bill specifies procedures for when a protest is made by a person.
   If the lodging business owners or their authorized representatives within the proposed district that collectively represent more than 50 percent or more of the assessments to be paid file a written objection, the bill establishes procedures for when such an objection is made.
   The bill allows a local governing body to modify the district, and establishes procedures for renewal of a district set to expire.
   The bill allows a local governing body to issue bonds by resolution to finance the estimated costs of the proposed improvements in the district.
   The bill requires the authorized representative of the district to file an annual report with the governing body establishing the district.
   The local governing body may repeal the existence of the district based upon law violations or malfeasance, if no indebtedness exists, and proper notification has been provided.