PRINTER'S NO. 1001
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
845
Session of
2023
INTRODUCED BY ROBINSON, ARGALL, GEBHARD, BREWSTER, MILLER,
CULVER AND LAUGHLIN, JUNE 30, 2023
REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT,
JUNE 30, 2023
AN ACT
Establishing tourism improvement districts and tourism
improvement district management associations; and providing
for powers of counties, for powers of tourism improvement
district management associations, for dissolution of tourism
improvement district, for annual audit and report and for
applicability.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Tourism
Improvement District Act.
Section 2. Legislative findings and declarations.
The General Assembly finds and declares as follows:
(1) Existing tax rates in many counties are at or near
their statutory cap.
(2) The revenue derived from these taxes many times is
not sufficient to provide adequate tourism-enhancing
services.
(3) As a result, benefited businesses should be
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authorized to create, where feasible and desired, assessment-
based tourism improvement districts and designated tourism
district management associations should initiate and
administer programs to promote and enhance tourism within the
district, as approved by a county.
(4) Counties should be given the broadest possible
discretion in establishing, by local ordinance, the type of
assessment-based programs most consistent with tourism
business needs, goals and objectives, as determined and
expressed by benefited business owners in the designated
tourism improvement district.
(5) This act is intended only to supplement and enhance
revenue for tourism activities and is not intended to
supplant or offset revenue from existing county ordinances
that assess hotels.
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Authority." A body politic and corporate, created under 53
Pa.C.S. Ch. 56 (relating to municipal authorities).
"Benefited business." A hotel, as defined under section 209
of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
Reform Code of 1971, that is located within a tourism
improvement district and benefits from tourism improvement
district activities based on a rational nexus test.
"County." A county located within this Commonwealth.
"Nonprofit corporation." A legal entity that is incorporated
in this Commonwealth and specifies in its charter or bylaws that
no part of the net earnings may benefit a private shareholder or
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individual holding an interest in the entity.
"Rational nexus test." The legal principle that requires
that there is a rational, definable benefit which accrues to a
business owner assessed a special assessment fee for the benefit
of a tourism improvement district created under this act.
"Service area." The area within the boundaries of a tourism
improvement district in which a tourism improvement district
management association provides tourism activities. The term
also includes the area outside of the tourism improvement
district where services are being provided by the tourism
improvement district management association under contract.
"Special assessment fee." The fee assessed on benefited
businesses levied by the county establishing a tourism
improvement district for the purposes of providing tourism
activities.
"Substantial amendment." An amendment to a preliminary plan
or an amendment to a final plan that does any of the following:
(1) Removes or adds tourism activities to be provided in
a tourism improvement district.
(2) Increases expenditures affecting more than 25% of
the total tourism improvement district management
association's budget for the fiscal year.
(3) Incurs increased indebtedness.
(4) Changes the assessment fee structure levied on
benefited business owners.
(5) Changes the tourism improvement district management
association that provides tourism activities within the
tourism improvement district.
(6) Changes the tourism improvement district's service
area boundary.
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"Sunset provision." A provision in a tourism improvement
district plan establishing a tourism improvement district that
provides for the automatic termination of the tourism
improvement district on a date specified in the tourism
improvement district plan and in the county ordinance
establishing the tourism improvement district.
"Total room inventory." The cumulative number of rooms
available for occupancy across the benefited business within a
tourism improvement district.
"Tourism activities." An activity or service that provides a
benefit to benefited businesses, including any of the following:
(1) Marketing, sales, event promotion and other
promotional programs designed to increase tourism in a
tourism improvement district.
(2) Funding of special events designed to increase
tourism in a tourism improvement district.
(3) Destination product development activities designed
to improve the visitor experience in a tourism improvement
district.
(4) The personnel and administrative support necessary
to provide tourism activities.
(5) Any other activity, service or improvement that is
designed to increase tourism in a tourism improvement
district.
"Tourism improvement district" or "TID." A geographical area
composed of benefited businesses.
"Tourism improvement district management association" or
"TIDMA." The governing body that oversees the management of
tourism improvement districts in a county.
"Tourism improvement district plan." The strategic plan for
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tourism activities within a tourism improvement district
approved by a tourism improvement district management
association.
Section 4. Establishment of tourism improvement districts.
(a) Establishment.--A benefited business may petition and
present a preliminary plan to the county to establish a TID in
the county.
(b) Specific procedures.--
(1) At least 30 days prior to the first public hearing
required under paragraph (2), the following shall be provided
by the county to each benefited business located in the
proposed TID via the United States Postal Service to the
address from which taxes are remitted:
(i) A copy of the petition.
(ii) A summary of the preliminary plan as presented
by the petitioning benefited business.
(iii) Objection procedures.
(iv) Amendment procedures.
(v) The date, location and time of the public
hearing.
(2) No sooner than 30 days from the mailing of the
information under paragraph (1), the county shall hold a
public hearing for the purpose of receiving public comment on
the preliminary plan for a proposed TID from benefited
businesses or their authorized representatives. Notice of the
hearing shall be published at least 10 days prior to the
hearing in at least one newspaper having a general
circulation in the proposed TID. The notice of the hearing
shall also be published at least 30 days prior to the hearing
on the county's publicly accessible Internet website. A
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county may not vote on the ordinance to establish a TID until
a public hearing is held.
(3) Objections to the proposed TID may be filed by
benefited businesses or their authorized representatives. The
following apply:
(i) Objections shall be in writing, signed by the
benefited business owner or an authorized representative,
and identify the address of the benefited business for
which the objection is being made.
(ii) Objections must be filed in the office of the
chief clerk of the county in which the TID is being
proposed no later than three days prior to a vote by the
county on the ordinance establishing a TID.
(iii) If benefited businesses that make up 40% of
the total room inventory within the proposed TID file
objections, the county shall be prohibited from enacting
the ordinance establishing the TID.
(c) Contents of preliminary plan.--The preliminary plan
shall include all of the following:
(1) A map indicating the boundaries of the proposed TID.
(2) A written report containing the following
information relating to the proposed TID:
(i) The name.
(ii) A detailed description of the service areas.
(iii) A list of proposed tourism activities and
their estimated cost.
(iv) A proposed budget for the first fiscal year,
including:
(A) personnel and administration; and
(B) tourism activities.
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(v) A proposed plan for the use of funds for the
upcoming five years.
(vi) The proposed revenue sources for financing all
proposed tourism activities.
(vii) The estimated time for implementation and
completion of all proposed tourism activities.
(viii) A statement identifying the TIDMA that will
govern and administer the TID, including:
(A) the number of TIDMA board members;
(B) board member terms;
(C) initial TIDMA board member term structure;
(D) initial TIDMA board member appointees; and
(E) the process for filling TIDMA board member
vacancies.
(ix) The method for determining the amount of the
special assessment fee to be levied, including an
exemption based upon the minimum number of rooms
maintained.
(3) Draft agreements between the county and TIDMA that
include the following:
(i) specifies their respective duties and
responsibilities of the county and the TIDMA;
(ii) requires the county to maintain the same level
of county programs and services provided within the
proposed TID after TID designation as before TID
designation;
(iii) permits the county to include in the agreement
and in the county ordinance establishing the TID a sunset
provision of no less than five years for renewal of the
agreement; and
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(iv) requires that the county be responsible for the
collection of all special assessment fees levied within
the proposed TID. The county may collect an
administrative fee that shall not exceed 4% of the
assessment collected in any calendar year.
(d) Final plan.--Prior to the establishment of a TID, the
county shall provide the final plan to the office of the chief
clerk for the county. The final plan shall incorporate
amendments made to the preliminary plan based on comments from
benefited business owners or their authorized representatives
provided at the public hearings or at some other time. At least
30 days prior to the vote by the county on the ordinance
establishing the TID, the county shall make the final plan
available on the county's publicly accessible Internet website.
(e) Additional public hearing for substantial amendment to
preliminary plan.--Before voting on the ordinance establishing
the TID, the county shall hold at least one public hearing for
the purpose of receiving public comment on a substantial
amendment to the preliminary plan and contained in the final
plan. Notice of the hearing shall be advertised at least 10 days
prior to the hearing in at least one newspaper having a general
circulation in the proposed TID and shall be published at least
30 days prior to the hearing on the county's publicly accessible
Internet website. Notice of the hearing shall be provided to
each benefited business via the United States Postal Service to
the address from which taxes are remitted. At least 30 days
prior to the vote by the county on the ordinance establishing a
TID, the county shall make the final plan available on its
publicly accessible Internet website.
(f) Amendments to approved final plan.--The following shall
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apply to amendments to an approved final plan:
(1) The final plan may be amended by the TIDMA after the
establishment of a TID upon the recommendation of a two-
thirds supermajority of the TIDMA board. A substantial
amendment to the final plan may only be proposed by a TIDMA
to a county upon the recommendation of a two-thirds
supermajority of the TIDMA board.
(2) A substantial amendment to the final plan shall only
be adopted by a county following the submission of the
proposed substantial amendment by a TIDMA and completion of
all of the following:
(i) At least 30 days prior to the vote on the
substantial amendment to the final plan, the county shall
hold at least one public hearing for the purpose of
receiving public comment on the substantial amendment to
the final plan. At least 10 days prior to the public
hearing, the county shall provide notice of the hearing
in at least one newspaper having a general circulation in
the TID. The notice shall specify the time and the place
of the hearing and the substantial amendments to be
considered. The notice shall be published on the county's
publicly accessible Internet website at least 30 days
prior to the date of the hearing. Notice of the hearing
shall be provided to each benefited business via the
United States Postal Service to the address from which
taxes are remitted.
(ii) For changes to a TID's service area boundary,
each benefited business proposed to be added to the TID
shall be notified at least 30 days prior to the public
hearing provided for under subparagraph (i). The notice
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shall be provided via the United States Postal Service to
the address from which taxes are remitted. The notice
shall contain the date, time and location of the public
hearing and a copy of the final approved plan and
proposed substantial amendment.
(iii) Objections to the proposed substantial
amendment to the final plan may be filed by benefited
businesses or their authorized representatives located
within the TID and the proposed expanded TID service area
boundary. The following apply:
(A) Objections shall be in writing, signed by
the benefited business owner or an authorized
representative and identify the address of the
benefited business for which the objection is being
made.
(B) Objections must be filed in the office of
the chief clerk of the county in which the TID is
being proposed no later than three days prior to a
vote by the county on the substantial amendment to
the final plan.
(C) If benefited businesses that make up 40% of
the total room inventory within the proposed TID or
the proposed expanded TID service area boundary file
objections, the county shall be prohibited from
adopting the substantial amendment to the final plan.
(iv) Within 30 days from the public hearing provided
under subparagraph (i), the county may approve or
disapprove the substantial amendment to the final plan.
If approved, the substantial amendment to the final plan
shall take effect upon the date of the approval.
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Section 5. Powers of counties.
Each county shall have the power to:
(1) Establish within the county an area or areas
designated as a TID. The following shall apply to the
establishment of a TID:
(i) A county may establish multiple TIDs within the
boundaries of the county.
(ii) A county may establish a TID that only includes
certain classifications of benefited businesses.
(iii) A benefited business may not be included in
any subsequently formed TIDs.
(iv) A county may levy a special assessment fee on
benefited businesses for the purpose of providing tourism
activities. The formula for determining the fee shall be
based on benefit to the benefited businesses and may
include a formula based on a percentage of gross rental
revenue or a fixed rate per occupied room per night. Each
benefited business paying a special assessment fee must
benefit directly or indirectly from tourism activities
provided by the TIDMA within the TID.
(2) Form a TIDMA by establishing an authority to
administer the TID, designating an existing nonprofit
corporation to administer the TID or creating a new nonprofit
corporation to administer the TID. The TIDMA must be
incorporated as a nonprofit corporation in this Commonwealth
or an authority.
(3) Appropriate and expend, in accordance with the
specific provisions of the county ordinance establishing the
TID, county funds as may be required to:
(i) Acquire, by purchase or lease, real or personal
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property deemed necessary to effectuate the purposes of
the TID.
(ii) Prepare or have prepared preliminary planning
or feasibility studies to determine needed activities in
the TID, as well as the provision of additional services
to supplement existing municipal services provided within
the TID.
(4) Advance funds to a TIDMA as may be required by the
tourism improvement district plan.
(5) Levy a special assessment fee needed to finance
tourism activities to be provided or made by the TIDMA.
(6) Collect special assessment fees on behalf of the
TIDMA and to employ any legal methods to ensure collection of
the special assessment fees.
(7) Acquire, by gift, purchase or eminent domain, land,
real property or rights-of-way which may be needed for the
purposes of the TID, in accordance with the tourism
improvement district plan.
(8) Include a sunset provision of no less than five
years in the county ordinance establishing the TID and in the
contract with the TIDMA.
Section 6. Establishment of tourism improvement district
management associations.
(a) Association designated.--When a county establishes a TID
under this act, a TIDMA shall be designated by the county to
administer tourism activities within the TID according to the
tourism improvement district plan.
(b) Board.--Each TIDMA shall have an administrative board
and the following shall apply:
(1) Where a newly formed nonprofit corporation is
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designated as the TIDMA, the certificate of incorporation or
bylaws shall provide that the governing board shall be
composed only of benefited business owners or their
authorized representatives. A representative of the county
may have a seat on the governing board.
(2) Where an existing nonprofit corporation is
designated as the TIDMA, the nonprofit shall create a
governing board composed only of benefited business owners or
their authorized representatives. A representative of the
county may have a seat on the governing board.
(3) Where an authority serves as the TIDMA, the
governing board shall be appointed under 53 Pa.C.S. Ch.
56. Notwithstanding 53 Pa.C.S. Ch. 56, the governing board of
an authority created to serve as a TIDMA shall be composed
only of benefited business owners or their authorized
representatives. A representative of the county may have a
seat on the governing board.
Section 7. Powers of tourism improvement district management
associations.
(a) General powers.--A TIDMA shall have the power to:
(1) Sue or be sued, implead or be impleaded, complain
and defend in all courts.
(2) Employ an executive director or administrator and
any necessary supporting staff or contract for the provision
of same.
(3) Prepare planning or feasibility studies or contract
for the preparation of planning or a feasibility study to
determine needed tourism activities or administrative
programs and services within the TID.
(4) Make, conduct or facilitate tourism activities or
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provide administrative programs and services within a TID.
(5) Purchase, own, construct, renovate, develop,
operate, rehabilitate, manage, sell or dispose of real
property.
(6) Contract with existing businesses and other TIDMAs
or authorities within or outside of the TID.
(7) Appropriate and expend TID funds, including Federal,
State or municipal funds received by the TIDMA. The funds
shall be expended in accordance with specific provisions
contained in the county ordinance establishing the TID and in
accordance with the purposes of the tourism improvement
district plan.
(8) Impose liens, penalties and interest on benefited
businesses for the nonpayment of special assessment fees.
(b) Special assessment fees.--
(1) Revenues from the special assessment fee shall be
accounted for and used by the TIDMA to provide tourism
activities within the TID in accordance with the purposes of
the tourism improvement district plan. The TIDMA may exempt a
business category or a category based on benefit.
(2) A special assessment fee authorized under this
section shall be calculated using January 1 as the first day
of the fiscal year.
(3) A special assessment fee shall be based upon the
estimated cost of the tourism activities to be provided in
the TID, as stated in the final plan under section 5. If the
aggregate amount of all special assessment fees levied by the
county during the year exceeds the estimated cost of proposed
tourism activities for the year, the fees shall be carried
over and used for tourism activities within the TID in the
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next fiscal year.
(4) The total costs of tourism activities provided by
the TIDMA shall be assessed to all designated benefited
businesses by a method that equitably apportions costs among
benefiting businesses.
(c) Payment.--The county may, by ordinance, authorize the
payment of the special assessment fees in equal annual or more
frequent installments, over time and bearing interest at the
rate specified in the county ordinance.
Section 8. Dissolution of tourism improvement district.
(a) Request for termination.--A written request for the
termination of a TID shall be approved by the benefited
businesses or their authorized representatives that represent at
least 40% of the total room inventory within the TID. The
request shall be filed in the office of the clerk for the county
in which the TID is located. Upon receipt of an approved request
for termination, the county shall hold at least one public
hearing for the purpose of receiving public comment from
benefited businesses within the TID or their authorized
representatives before terminating the TID. Notice of the
hearing shall be published at least 10 days prior to the hearing
in at least one newspaper having a general circulation and
published 30 days prior to the hearing on the county's publicly
accessible Internet website. Notice of the hearing shall be
provided to all benefited businesses via the United States
Postal Service to the address from which taxes are remitted. If
the benefited businesses or their authorized representatives
that represent more than 40% of the total room inventory within
the TID do not object to the termination of the TID and there is
no outstanding and unpaid indebtedness incurred to accomplish a
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purpose of the TID, the county shall pass an ordinance
terminating the TID. Ownership in assets of the TIDMA shall
transfer to the county.
(b) Termination by the county.--A TID that does not have
outstanding and unpaid indebtedness incurred to accomplish a
purpose of the TID may be dissolved by an ordinance of the
county if the county finds that there has been misappropriation
of funds, malfeasance or a violation of law in connection with
the management of the TID. Prior to the county enacting an
ordinance terminating a TID, the county shall hold at least one
public hearing to determine if there has been misappropriation
of funds, malfeasance or a violation of law in connection with
the management of the TID. The county shall publish notice of
the termination hearing, including the time and place of the
hearing, in at least one newspaper having a general circulation
in the TID and on the county's publicly accessible Internet
website. This notice shall be published at least 30 days prior
to the date of the hearing. Upon approval of the termination by
the county, the property ownership of assets of the TIDMA shall
transfer to the county.
Section 9. Annual audit and report.
A TIDMA shall annually:
(1) submit an audit of the income and expenditures to
the county in which the TID is located within 120 days after
the end of each fiscal year; and
(2) submit a report, including financial and
programmatic information and a summary of audit findings, to
the county in which the TID is located and to all assessed
benefited businesses.
Section 10. Applicability.
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(a) TIDs established prior to act.--A TID established prior
to the effective date of this subsection shall remain in
existence and shall not be governed by the provisions of this
act.
(b) TIDs established subsequent to act.--A TID established
after the effective date of this subsection shall be governed by
the provisions of this act.
(c) Additional requirements.--A TID in existence on the
effective date of this subsection shall:
(1) be required to carry out duties and responsibilities
imposed on a TID under this act; and
(2) possess additional powers given to a TID under this
act without having to restructure or reorganize under this
act.
Section 11. Effective date.
This act shall take effect in 60 days.
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