Tourism improvement areas; municipalities; counties
If enacted, HB 2873 will create a framework for municipalities to manage local tourism development actively through TIAs. The bill allows local governments to regulate the establishment and operation of these improvement areas and sets guidelines for how lodging business assessments can be levied and spent. This revenue generated from assessments is intended to fund activities that promote tourism and enhance the economic climate in the area, thereby potentially increasing overall state revenue from increased tourism activities.
House Bill 2873 proposes the establishment of Tourism Improvement Areas (TIAs) within municipalities and counties in Arizona. The bill aims to enhance local tourism by allowing lodging businesses to form improvement areas that collect lodging business assessments to finance tourism-related activities. This structure is designed to supplement rather than replace existing services provided by municipalities, helping local businesses compete better against other destinations. The formation of TIAs is contingent upon obtaining a petition from lodging business owners who represent at least sixty-seven percent of the total available lodging rooms in the designated area.
While the bill may bolster tourism and economic growth, it could also lead to concerns regarding local autonomy and the effectiveness of such assessments on lodging businesses. Those opposing the bill may argue that it could lead to unequal burdens on smaller lodging businesses unable to absorb additional operational costs, especially if a tiered assessment rate applies. Furthermore, the stipulation that any lodging business opening within a TIA must also pay assessments introduces a level of scrutiny that could deter new entrants into the market if not managed transparently.