LRB-3775/2
MES:cs:pg
2003 - 2004 LEGISLATURE
February 26, 2004 - Introduced by Representatives Pettis, Kestell, Kreibich,
Hines, Ladwig, Nass, Townsend, M. Lehman, Montgomery, Nischke,
McCormick, D. Meyer and Suder, cosponsored by Senators Harsdorf,
Roessler, Zien, Breske and Kanavas. Referred to Committee on Tourism.
AB918,1,5
1An Act to renumber 66.0615 (1) (a);
to amend 66.0615 (1m) (a), 66.0615 (1m)
2(d) 1. and 66.0615 (1m) (d) 2.; and
to create 66.0615 (1) (ab), 66.0615 (1) (aj),
366.0615 (1) (em), 66.0615 (1) (fm), 66.0615 (1m) (g), 66.0615 (1m) (h) and
466.0615 (4) of the statutes;
relating to: changes to the room tax law and the
5creation of destination marketing organizations and tourism committees.
Analysis by the Legislative Reference Bureau
Under current law a city, village, or town (municipality) and a local exposition
district may impose a room tax. The room tax is a tax on the privilege of furnishing,
at retail, rooms or lodging to transients by hotelkeepers, motel operators, and other
persons who furnish accommodations that are available to the public, irrespective
of whether membership is required for use of the accommodations.
Generally, the maximum room tax that a municipality may impose is eight
percent. A single municipality that imposes a room tax may create a commission,
which is defined as an entity to coordinate tourism promotion and development. If
two or more municipalities in a zone impose a room tax, they must create a
commission. Current law defines a zone as an area made up or two or more
municipalities that, those municipalities agree, is a single destination as perceived
by the traveling public. Current law requires a commission to contract with an
organization to provide staff, development, or promotional services for the tourism
industry in a municipality if a tourism entity does not exist in that municipality. A
tourism entity is defined as a nonprofit organization that existed before January 1,
1992, that provides staff, development, or promotional services for the tourism
industry in a municipality.
A municipality that first imposes a room tax after May 13, 1994, must spend
at least 70 percent of the amount collected on tourism promotion and development,
which may be spent directly by the municipality or forwarded to the commission for
its municipality or zone.
Under the bill, generally, room tax revenues must be forwarded by a
municipality to a destination marketing organization (DMO) or a tourism
committee, other than room tax revenues that current law authorizes a municipality
to retain for purposes other than tourism promotion and development. The bill
defines a DMO as a nonprofit organization whose primary purpose is to generate
overnight stays in hotels or motels in an area. An area is defined as the geographic
area of one municipality that imposes a room tax or the geographic areas of two or
more municipalities that impose a room tax and that enter into a joint contract with
a DMO to generate overnight hotel or motel stays in their municipalities.
Under the bill, if a single municipality imposes a room tax, it must contract with
a DMO or, if no DMO exists in the municipality, the municipality must create a
tourism committee. The DMO must be governed by a board that has less than 30
members who are appointed by the municipality according to procedures established
in a municipal ordinance. The board members must consist of tourism-related
retailers, owners or operators of hotels or motels, and representatives of the
hospitality industry (hotel, motel, restaurant, tourist attraction, or private golf
course industry), and at least 20 percent must be appointed by the principal elected
official in the municipality.
If two or more municipalities enter into a contract with a DMO to jointly
promote their areas, the DMO must be governed by a board whose members must
be appointed under the terms of a written agreement entered into by the
municipalities. The board members must consist of representatives of the
hospitality industry and owners or operators of hotels or motels in the municipality,
and at least 20 percent, in total, must be appointed by the principal elected officials
in the municipalities.
The bill requires a DMO to do at least all of the following:
1. Engage in activities that generate overnight hotel or motel stays in its area.
2. At least annually, prepare a complete accounting of the receipts, expenses,
and expenditures of the DMO's board and provide this report to all of the
municipalities that provide room tax revenue to the DMO.
3. At least annually, prepare a report that correlates the expenditures of the
DMO's board and the overnight stays that result from the expenditures, which shall
be distributed as described in item 2.
If no DMO provides services to a single municipality that imposes a room tax,
the municipality must create a tourism committee to which it forwards its room tax.
The tourism committee consists of seven members who are appointed by the
principal elected official in the municipality, and confirmed by the governing body.
The committee members are made up of representatives of the hotel or motel
industry, tourism-related retailers, and electors who reside in the municipality. The
tourism committee must contract with a nonprofit tourism organization (NTO) to
provide tourism development and promotion services to the municipality, and the
tourism committee forwards the room tax revenue it receives from the municipality
to the NTO.
The NTO is governed by a board whose members consist of tourism-related
retailers, owners or operators of hotels or motels, and members who are appointed
by the principal elected official in the municipality. An NTO's duties are similar to
the duties of a DMO.
If a commission exists on or after the effective date of the bill, it must wind up
its affairs by transferring its assets and liabilities, and its existing contracts and
programs, to a DMO or a tourism committee. Following the winding up of its affairs,
the commission shall dissolve, effective March 31, 2005. Generally, the bill first
applies to room tax revenues that are collected on the effective date of the bill, but
if a municipality forwards its room tax revenues to a commission the bill first applies
to such revenues that are collected on April 1, 2005.
Also under the bill, in any cause of action that relates to the interpretation or
applicability of the room tax statute, a court must award the prevailing party the
costs incurred in connection with the action, including attorney fees.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB918, s. 1
1Section
1. 66.0615 (1) (a) of the statutes is renumbered 66.0615 (1) (ae).
AB918, s. 2
2Section
2. 66.0615 (1) (ab) of the statutes is created to read:
AB918,3,73
66.0615
(1) (ab) "Area" means the geographic area of one municipality that
4imposes a room tax under sub. (1m) (a) or the geographic areas of 2 or more
5municipalities that impose a room tax under sub. (1m) (a) and that enter into a joint
6contract with a destination marketing organization to generate overnight hotel or
7motel stays in their municipalities.
AB918, s. 3
8Section
3. 66.0615 (1) (aj) of the statutes is created to read:
AB918,3,109
66.0615
(1) (aj) "Destination marketing organization" means one of the
10following:
AB918,4,3
11. A nonprofit organization that came into existence before January 1, 2004,
2and whose primary purpose is to generate overnight stays in hotels or motels in an
3area.
AB918,4,74
2. If an area does not have an organization described in subd. 1. that serves the
5area and that is in existence on January 1, 2004, a nonprofit organization that came
6into existence after December 31, 2003, and whose primary purpose is to generate
7overnight stays in hotels or motels in an area.
AB918, s. 4
8Section
4. 66.0615 (1) (em) of the statutes is created to read:
AB918,4,129
66.0615
(1) (em) "Tourism committee" means a committee created by a
10municipality, under sub. (1m) (h), after December 31, 2003, in an area that does not
11have in existence on January 1, 2004, a destination marketing organization, and
12whose primary purpose is to generate overnight stays in hotels or motels in an area.
AB918, s. 5
13Section
5. 66.0615 (1) (fm) of the statutes is created to read:
AB918,4,1514
66.0615
(1) (fm) "Tourism-related retailers" has the meaning given in s.
1566.1113 (1) (d).
AB918, s. 6
16Section
6. 66.0615 (1m) (a) of the statutes is amended to read:
AB918,5,717
66.0615
(1m) (a) The governing body of a municipality may enact an ordinance,
18and a district, under par. (e), may adopt a resolution, imposing a tax on the privilege
19of furnishing, at retail, except sales for resale, rooms or lodging to transients by
20hotelkeepers, motel operators and other persons furnishing accommodations that
21are available to the public, irrespective of whether membership is required for use
22of the accommodations. A tax imposed under this paragraph is not subject to the
23selective sales tax imposed by s. 77.52 (2) (a) 1. and may not be imposed on sales to
24the federal government and persons listed under s. 77.54 (9a). A tax imposed under
25this paragraph by a municipality shall be paid to the municipality and
may shall,
1subject to par. (d), be forwarded to a
commission if one is created under par. (c), as
2provided in par. (d) destination marketing organization, as described under par. (g)
3or, if such an organization does not exist in the municipality, to a tourism committee,
4as described under par. (h). Except as provided in par. (am), a tax imposed under this
5paragraph by a municipality may not exceed 8%. Except as provided in par. (am),
6if a tax greater than 8% under this paragraph is in effect on May 13, 1994, the
7municipality imposing the tax shall reduce the tax to 8%, effective on June 1, 1994.
AB918, s. 7
8Section
7. 66.0615 (1m) (d) 1. of the statutes is amended to read:
AB918,5,179
66.0615
(1m) (d) 1. A municipality that first imposes a room tax under par. (a)
10after May 13, 1994, shall spend at least 70% of the amount collected on tourism
11promotion and development. Any amount of room tax collected that must be spent
12on tourism promotion and development shall
either be spent directly by the
13municipality on tourism promotion and development or shall be forwarded to
the
14commission for its municipality or zone if the municipality has created a commission 15a destination marketing organization, as described under par. (g) or, if such an
16organization does not exist in the municipality, to a tourism committee, as described
17under par. (h).
AB918, s. 8
18Section
8. 66.0615 (1m) (d) 2. of the statutes is amended to read:
AB918,6,719
66.0615
(1m) (d) 2. If a municipality collects a room tax on May 13, 1994, it may
20retain not more than the same percentage of the room tax that it retains on May 13,
211994. If a municipality that collects a room tax on May 1, 1994, increases its room
22tax after May 1, 1994, the municipality may retain not more than the same
23percentage of the room tax that it retains on May 1, 1994, except that if the
24municipality is not exempt under par. (am) from the maximum tax that may be
25imposed under par. (a), the municipality shall spend at least 70% of the increased
1amount of room tax that it begins collecting after May 1, 1994, on tourism promotion
2and development . Any amount of room tax collected that must be spent on tourism
3promotion and development shall
either be spent directly by the municipality on
4tourism promotion and development or shall be forwarded to
the commission for its
5municipality or zone if the municipality has created a commission
a destination
6marketing organization, as described under par. (g) or, if such an organization does
7not exist in the municipality, to a tourism committee, as described under par. (h).
AB918, s. 9
8Section
9. 66.0615 (1m) (g) of the statutes is created to read:
AB918,6,129
66.0615
(1m) (g) 1. If a single municipality imposes a room tax under par. (a),
10the municipality shall contract with a destination marketing organization in its
11area. If no destination marketing organization exists in the municipality, the
12municipality shall create a tourism committee under par. (h).
AB918,6,1713
2. With regard to a destination marketing organization that provides services
14to a single municipality, the organization shall be governed by a board that has no
15more than 29 members. The governing board shall be composed of the following
16members and, except as provided in subd. 2. d., shall be appointed by the
17municipality according to procedures established in a municipal ordinance:
AB918,6,1918
a. At least 67 percent of the members of the board shall represent
19tourism-related retailers.
AB918,6,2120
b. At least 33 percent of the members of the board shall be owners or operators
21of hotels or motels that collect the room tax in the municipality.
AB918,6,2422
c. At least 51 percent of the members of the board shall represent the hotel
23industry, the motel industry, the restaurant industry, the tourist attraction industry,
24or the private golf course industry.
AB918,7,2
1d. At least 20 percent of the members of the board shall be appointed by the
2principal elected official in the municipality.
AB918,7,103
3. Two or more municipalities that impose a room tax under par. (a) may enter
4into a contract under s. 66.0301 to jointly promote their areas. If each of the
5contracting municipalities imposes a room tax, the municipalities may enter into a
6contract with a single destination marketing organization in their area. A
7destination marketing organization that provides services to 2 or more
8municipalities under this subdivision shall be governed by a board. The governing
9board shall be composed of the following members who shall be appointed under the
10terms of a written agreement entered into by the municipalities:
AB918,7,1311
a. At least 51 percent of the members of the board shall represent the hotel
12industry, the motel industry, the restaurant industry, the tourist attraction industry,
13or the private golf course industry.
AB918,7,1514
b. At least 25 percent of the members of the board shall be owners or operators
15of hotels or motels that collect the room tax in the area.
AB918,7,1716
c. At least 20 percent of the members of the board, in total, shall be appointed
17by the principal elected official in each of the municipalities.
AB918,7,1918
4. A destination marketing organization's governing board shall do at least all
19of the following:
AB918,7,2120
a. Meet regularly and, from among its members, elect a chairperson, vice
21chairperson, secretary, and treasurer.