Bill would allow creation of tourism improvement districts
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A bill being considered by the Senate Tax and Fiscal Policy Committee would allow communities throughout the state to establish tourism improvement districts (TID) designed to help market and develop their areas.
Senate Bill 61, authored by Sen. Travis Holdman, R-Markle, provides the opportunity for a petition to be created that would spell out the details of the district, which would then need to be approved by the local legislative body.
Funds raised through the district could be used for capital investments in the geographic area outlined in the district or to support marketing efforts aimed at attracting more visitors to the area.
Carrie Lambert, executive director of the Indiana Tourism Association, says the effort is one that has been in the works for several years.
“The goal was for this to be enabling legislation that locally could be passed,” Lambert told our partners at the IBJ. “It gets a majority of the assessments that a majority of businesses would approve, and they would then be a part of saying how those funds would be used to market or develop their community.”
The petition for a tax improvement district would outline how much the businesses or property owners in the proposed area would be assessed, as well as specifically what those funds would be used for. It would also specify the length of time the district would exist.
“You really have to define the benefit, what the plan is actually going to be for those folks to actually elect to do to have that assessment upon them,” Patrick Tamm, CEO of the Indiana Restaurant & Lodging Association, told the committee on Tuesday.
A petition must have approval from at least 50% of the businesses or property owners who would be paying the special non-tax assessment before going before the local legislative body.
Lambert said the funds generated from the special assessment could come from a variety of sources from the participating businesses.
“If it’s an actual business, it could be based on how much sales come in, and what percentage that potentially would be assessed on top of that,” she said. Big hotel rooms, it could be based on the number of rooms. There’s a lot of flexibility and enabling language that a local community can go back and look at.”
The Indiana Tourism Association says the funds will be used to “provide services desired by, and directly benefitting, the businesses in the district.” Examples could be leveraging new development for sports tourism growth, new nightlife amenities, new retail districts, and venue capital improvements.
The organization notes that there are currently more than 200 tourism improvement districts in 21 states that, collectively, are generating over $500 million for supplemental tourism promotion and development.
Kentucky is the only state neighboring Indiana that has a TID law in place, though the other neighboring states are also considering establishing them.
Members of the committee questioned how a tourism improvement district would affect existing TIF districts or professional sports districts. Tamm said the assessments made through a TID would come in addition to those districts and would not have an impact on the funds raised through them.
Lambert noted that having a TID in place would particularly benefit smaller communities with fewer resources.
“Out of the 92 counties, we have about 70 that are represented within our membership, and not all of them have an opportunity to tap into other resources,” she said. “Our goal is to really be able to maximize it statewide and have that opportunity there. We recognize that there’s different needs in different communities, and having this availability available to all is certainly a great opportunity.”
Part of the process also includes the creation of a board that includes individuals representing the impacted businesses.
“It creates more conversation, more dialogue, more unity, if you will, at the local level for those efforts,” Tamm said. “At the same time, though, it’s still overseen by duly elected bodies as well, whether that’s a city council, whether that’s a county council as well.”
The committee did not vote on the bill during Tuesday’s meeting. Holdman, who chairs the committee, said they wanted to provide lawmakers more opportunity to ask questions about the proposal.