Bill Text: MI HB5440 | 2023-2024 | 102nd Legislature | Introduced
Bill Title: Taxation: convention tourism assessments; regional tourism marketing act; clarify application to short-term rentals and make other modifications. Amends title & secs. 2, 3, 4, 5, 8 & 9 of 1989 PA 244 (MCL 141.892 et seq.). TIE BAR WITH: HB 5438'24
Spectrum: Partisan Bill (Democrat 21-0)
Status: (Introduced) 2024-02-14 - Per Rule 41 Referred To Committee On Local Government And Municipal Finance [HB5440 Detail]
Download: Michigan-2023-HB5440-Introduced.html
HOUSE BILL NO. 5440
A bill to amend 1989 PA 244, entitled
"Regional tourism marketing act,"
by amending the title and sections 2, 3, 4, 5, 8, and 9 (MCL 141.892, 141.893, 141.894, 141.895, 141.898, and 141.899), the title and section 2 as amended by 2018 PA 466.
the people of the state of michigan enact:
An act to promote tourism in certain regions of this state; to provide for the creation of tourism marketing programs; to allow certain activities as part of tourism marketing programs; to provide for the imposition and collection of assessments on the owners of transient facilities, including short-term rentals, to support tourism marketing programs; to provide for the disbursement of the assessments; to prescribe the oversight powers and duties of certain state departments, state agencies, and state employees; and to prescribe remedies and penalties.
(a) "Assessment" means the amount levied against an owner under this act.
(b) "Assessment revenues" means the money collected by a regional marketing organization from the assessment, including any interest and penalties on the assessment, imposed under this act.
(c) "Board" means the board of directors elected by the members of a regional marketing organization.
(d) "Director" means the president of the Michigan strategic fund or his or her the president of the Michigan strategic fund's designee.
(e) "Master plan" means the comprehensive, long-range master plan developed by the Michigan travel commission and the travel bureau under section 2c of the Michigan tourism policy act, 1945 PA 106, MCL 2.102c.
(f) "Owner" means the owner of a transient facility that is located within the regional assessment district or, if the transient facility is operated or managed by a person other than the owner, then the operator or manager of that transient facility. Owner includes a person electing to come under the provisions of this act pursuant to section 9.
(g) "Regional assessment district" means a region of this state composed of a number of counties in which a regional marketing organization operates. Regional assessment district does not include a portion of the region that is a special charter, fourth class city.
(h) "Regional marketing organization" means a nonprofit corporation that promotes tourism within a region of this state. Regional marketing organization includes only an organization that has been operating for 10 or more years and that operates in a region composed of 15 counties.
(i) "Room" means a room or other space provided for sleeping that can be rented independently, including the furnishings and other accessories in the room. Room includes, but is not limited to, a both of the following:
(i) A condominium or time-sharing unit that, pursuant to a management agreement, may be used to provide dwelling, lodging, or sleeping quarters for a transient guest.
(ii) A dwelling offered as a short-term rental.
(j) "Room charge" means the charge imposed for the use or occupancy of a room, excluding charges for food, beverages, state use tax, telephone service, or like services paid in connection with the room charge, and reimbursement of the assessment as allowed in section 6. For a short-term rental, room charge means the occupancy charge as that term is defined in section 2 of the short-term rental regulation act.
(k) "Short-term rental" means that term as defined in section 2 of the short-term rental regulation act.
(l) "State use tax" means the tax levied under the use tax act, 1937 PA 94, MCL 205.91 to 205.111.
(m) (k) "Transient facility" means, a subject to subdivision (p), either of the following facilities:
(i) A building or combination of buildings under common ownership, operation, or management that contains 10 1 or more rooms used in the business of providing dwelling, lodging, or sleeping to transient guests, whether or not membership is required for the use of the rooms. Transient facility includes a building or combination of buildings, the owner of which has elected to come under the provisions of this act pursuant to section 9.
(ii) A dwelling offered as a short-term rental.
(n) Transient facility does not include a any of the following:
(i) A college or school dormitory. ; a
(ii) A hospital. ; a
(iii) A nursing home. ; a
(iv) A hospice. ; a
(v) A building, or combination of buildings, or dwelling that is otherwise a transient facility, but that is located within 1 mile of a ski lift as defined in section 2 of the ski area safety act of 1962, 1962 PA 199, MCL 408.322. ; or a
(vi) A facility owned and operated by an organization qualified for an exemption from federal taxation under section 501(c) of the internal revenue code of 1986, 26 USC 501.
(o) (l) "Transient guest" means a natural person who occupies a room in a transient facility for less than 30 consecutive days regardless of who pays the room charge.
(p) (m) "Tourism marketing program" means a program established by a regional marketing organization to develop, encourage, solicit, and promote tourism within a region of this state. The encouragement and promotion of tourism includes a service, function, or activity, whether or not performed, sponsored, or advertised by a regional marketing organization, that intends to attract transient guests to the regional assessment district.
(q) (n) "Tourism marketing program notice" means the notice described in section 3.
(r) (o) "Travel bureau" means the Michigan travel bureau created under section 2a of the Michigan tourism policy act, 1945 PA 106, MCL 2.102a, and renamed Travel Michigan by Executive Reorganization Order No. 1997-1, MCL 2.111.
Sec. 3. (1) In order to To establish a tourism marketing program within a regional assessment district, a regional marketing organization shall file a tourism marketing program notice with the director.
(2) The tourism marketing program notice shall must contain all of the following:
(a) A statement that the regional marketing association proposes to create a tourism marketing program under this act.
(b) A statement that the regional marketing association proposes to levy and collect an assessment from owners to pay the costs of the tourism marketing program.
(c) A description of the structure, membership, and activities of the regional marketing organization, including a statement that the regional marketing organization is governed by a board and that a majority of the members of the board are owners. The description shall must include the business name and address of the person designated by the regional marketing organization to receive the payment of assessments under section 6 and the independent certified public accountants who audit the financial statements of the regional marketing organization.
(d) A description of the tourism marketing program to be implemented by the regional marketing organization with the assessment revenues.
(e) A statement specifying the amount of the assessment proposed to be levied. The assessment shall must not exceed 1% of the room charges in the applicable payment period.
(f) A list of the counties comprising the regional assessment district.
(g) Other information considered necessary by the director.
(3) On the same day the tourism marketing program notice is filed under subsection (1), the regional marketing organization shall mail a copy of the tourism marketing program notice to each owner of a transient facility located in the regional assessment district. The tourism marketing program notice shall must be mailed by registered or certified mail to the owner at the last known address of the transient facility. The regional marketing organization shall use any information that is reasonably available to the regional marketing organization, including, but not limited to, the short-term rental database as that term is defined in section 2 of the short-term rental regulation act, to establish the list of all transient facilities within the regional assessment district.
Sec. 4. (1) The director shall approve or disapprove a tourism marketing program within 30 days after a tourism marketing program notice is filed. The director shall not disapprove a tourism marketing program unless the tourism marketing program violates this act.
(2) Within 40 days after approval of a tourism marketing program under subsection (1), the director shall conduct among all owners a written referendum by mail on whether the tourism marketing program should be approved. For the purpose of the referendum and except as provided in section 9, each owner has 1 vote for each room in the owner's transient facility. For purposes of this subsection, a dwelling offered as a short-term rental is considered 1 room.
(3) If the tourism marketing program is approved by a majority of the votes actually cast in the regional assessment district, the tourism marketing program and assessment set forth in the tourism marketing program notice become effective on the first day of the month that is more than 30 days after certification by the director of the results of the referendum. A regional marketing organization may file and serve another tourism marketing program notice under section 3 no sooner than 1 year after certification by the director of the results of a referendum if the referendum failed.
Sec. 5. A tourism marketing program may include 1 or more of the following:
(a) A provision for establishing and paying the costs of advertising, marketing, and promotional programs to encourage tourism in the regional assessment district.
(b) A provision for assisting a transient facility within the regional assessment district to promote tourism.
(c) A provision for the acquisition of personal property considered appropriate by the regional marketing organization to achieve the purpose of the tourism marketing program.
(d) A provision for the hiring of and payment for personnel employed by the regional marketing organization to implement the tourism marketing program.
(e) A provision for contracting with organizations, agencies, or persons to carry out activities to achieve the purpose of the tourism marketing program.
(f) A program to establish and pay for the costs of research designed to encourage tourism in the regional assessment district.
(g) Provisions or programs to assist with or provide child care.
(h) Housing activities.
(i) (g) A provision to incur any other expense or cost that the board, in the exercise of its reasonable business judgment, considers reasonably related to the promotion of tourism within the regional assessment district.
(j) (h) A procedure for election of the board that requires that a majority of the members of the board are owners.
(k) Provisions clarifying the assessment on room charges for short-term rentals.
Sec. 8. (1) A regional marketing organization shall conduct a referendum on whether an assessment levied under a tourism marketing program shall be discontinued if both of the following requirements are met:
(a) The tourism marketing program levying the assessment has been in effect for 2 years or more.
(b) Forty percent or more of the total number of owners in the regional assessment district, or owners representing 40% or more of the total number of rooms in transient facilities within the regional assessment district, file with the regional marketing organization a written request for a referendum under this section. For purposes of this subdivision and subsection (2), a dwelling offered as a short-term rental is considered 1 room.
(2) The regional marketing organization shall conduct a written referendum, by mail or in person, among all owners within 60 days after receipt of the written request for a referendum under subsection (1). For the purpose of the referendum, each owner has 1 vote for each room in the owner's transient facility.
(3) If a majority of the votes actually cast at the referendum approves the discontinuance of the assessment, the assessment under a tourism marketing program shall be is discontinued on the first day of the month that is more than 60 days after certification by the regional marketing organization of the results of the referendum.
(4) The discontinuance of an assessment under this section does not prevent a regional marketing organization from filing and serving a new tourism marketing program notice under section 3 during or after the 60-day period under subsection (3).
(5) If a referendum held under this section does not result in the discontinuance of the assessment under a tourism marketing program, a further referendum on the discontinuance of that assessment shall must not be held until the expiration of 1 year after the date of the referendum under this section.
Sec. 9. (1) An owner of a building or combination of buildings that is within a regional assessment district, that has less than 10 rooms or is located within 1 mile of a ski lift, and that otherwise meets the definition of a transient facility under this act an exempt facility may agree in writing to be subject to a tourism marketing program under this act. If an owner of a building or combination of buildings an exempt facility agrees to be subject to the tourism marketing program, the building or combination of buildings exempt facility is considered a transient facility for the purposes of this act. The owner of the building or combination of buildings exempt facility is considered an owner for the purposes of this act except that the owner is not eligible to vote in the referendum on the tourism marketing program. The owner shall otherwise participate in the tourism marketing program for that regional assessment district.
(2) A building or combination of buildings An exempt facility that is considered a transient facility under subsection (1) shall remain remains subject to an assessment imposed under this act until the assessment is discontinued as provided in section 8.
(3) As used in this section, "exempt facility" means a building, combination of buildings, or dwelling that is within a regional assessment district, that is located within 1 mile of a ski lift, and that otherwise meets the definition of a transient facility.
Enacting section 1. This amendatory act does not take effect unless Senate Bill No.____ or House Bill No. 5438 (request no. 03372'23 **) of the 102nd Legislature is enacted into law.
