Committee backs bill allowing local tourism improvement areas, proponents say tool is voluntary and locally managed

The Senate Finance Committee voted to advance House Bill 2950, which establishes a process for municipalities or counties to authorize tourism improvement areas (TIAs) and sets petition, notice, public hearing and dissolution procedures.

Kim Grace Sabo, president and CEO of the Arizona Lodging and Tourism Association, told the committee TIAs are "industry-driven, locally managed" tools that allow lodging businesses to voluntarily invest in marketing, events and route attraction. "This tool allows lodging businesses to voluntarily invest in marketing and promotion that drives overnight stays," Sabo said.

Ron Price, president and CEO of Visit Phoenix, said TIAs are intended to be voluntary for hotels within a proposed area and that boards formed after formation would manage funds and provide annual audits to municipalities and the Department of Revenue. "This would be a voluntary assessment and it would be in respective regions," Price said, adding that the audit and transparency requirements would ensure accountability.

Senators asked whether a single hotel within an approved TIA could opt out of charging the assessment and pressed staff and witnesses to explain the petition/formation mechanics, the DOR’s role in collections, and the cost to DOR of implementing the new collections process. Proponents said implementation costs would be covered by the TIA and that DOR’s existing collection mechanisms make launching TIAs straightforward.

The committee passed the bill with a due-pass recommendation. Supporters said the tool will help rural destinations fund targeted marketing without state general-fund dollars.