Subtitle 20 – Baltimore Tourism Improvement District

Tourism is a major contributor to Baltimore’s economy, with visitor spending generating approximately $10 billion annually in total industry sales. This activity generates $290 million in taxes and fees to the City of Baltimore annually, revenue that supports valuable City services, while also saving each Baltimore household $680 in annual personal tax contributions.

Tourism is a major employer in Baltimore, creating or sustaining more than 85,000 jobs for City residents and across the region each year.

In addition to generating jobs and tax revenues, a thriving tourism industry benefits Baltimore by sustaining air travel, creating familiarity, attracting decision makers as well as future residents and workers, and improving the quality of life for all residents.

Funding for Baltimore convention sales and tourism promotion is allocated by law to Visit Baltimore, Inc., a private and independent not-for-profit, non-stock corporation, in the form of a percentage share of the City hotel occupancy tax collection. This organization has been historically under-resourced in an increasingly competitive tourism market. For example, market research quantifies a lack of overall awareness about and interest in Baltimore as a preferred tourism destination. These challenges can be addressed through increased sales and marketing activities.

Visit Baltimore is poised to deliver the enhanced marketing and sales infrastructure required to generate impact pending sufficient resources – and the hotel community has identified an opportunity for a self-funding and industry-managed mechanism, involving no new taxes for local residents, to support these programs.

The ultimate goal of these programs will be to drive increased overnight visitation, in turn, supporting the bottom line of not only the city’s hotel community, but also, benefitting all visitor-facing businesses as well as City residents through additional economic and quality of life benefits for the City of Baltimore.

A tourism improvement district is a proven mechanism by which assessed business owners within a defined area can agree to impose a special assessment on themselves in order to provide enhanced and supplemental services designed to increase tourism within the district and benefit the assessed businesses paying the special assessment.

Tourism improvement districts have been created in over 160 destinations in 14 states across the country, and the reports received suggest that they are almost uniformly highly successful in achieving their objectives.

Critical to any tourism improvement district is the creation of a partnership between the public and private sector, with the public sector committing to maintain funding for tourism promotion services at specified levels and the private sector agreeing to accept new special assessments for the purpose of supplementing publicly funded tourism promotion services.

A tourism improvement district in this City cannot be successful without the full cooperation of the City and the assessed businesses within the District.

The Council has considered the materials compiled by Visit Baltimore regarding the creation of the Baltimore Tourism Improvement District and the pattern of success for such districts elsewhere.

The Council finds that establishing the Baltimore Tourism Improvement District is an important and vital element of the long-term health and growth of City’s tourism industry and the City.

The Council finds that a special assessment system for the Baltimore Tourism Improvement District should be uncomplicated, direct, and fair. The system provided for in this subtitle satisfies such criteria.

The Council finds that the Baltimore Tourism Improvement District should encourage the involvement of minorities in the operation of the District and in the business community itself.

administer the District programs and activities;

promote and market the District; and

provide other marketing, promotion, and destination development services, provided that the services and function shall be provided within the District, or, within areas adjoining or adjacent to the District.

conduct District programs and activities, promote and market the District, and provide other marketing, promotion, and destination development services;

acquire, hold, and use property necessary to achieve the District’s purposes;

enter into contracts for the provision of District services;

sue and be sued;

borrow and accept grants;

employ and discharge personnel;

propose, in the District’s financial plan, the District special assessments in accordance with <cite data-path="|14|§20-8">§ 20-8 of this subtitle</cite>;

adopt, amend, and modify bylaws of the District Management Committee, subject to the approval of the Board of Estimates;

establish and elect officers, and provide for the terms of office and duties of the officers;

contract for and purchase goods and services in accordance with City ordinances and policy requiring achievement of goals regarding minority and women’s business enterprises; and

do all things necessary or convenient to carry out the purposes of the District under this subtitle.

The Association is not and may not be deemed an agency of the Mayor and City Council of Baltimore or of the State of Maryland.

The officers and employees of the Association are not and may not act as agents or employees of the Mayor and City Council of Baltimore or of the State of Maryland.

The Association may not exercise any police or general powers other than those authorized by State law or City ordinance.

The Association may not pledge the full faith or credit of the City.

The Association may not impose any District special assessments in excess of those approved by the Board of Estimates.

The Association may not exercise the power of eminent domain.

Except as otherwise provided in <cite data-path="|14|§20-17">§ 20-17 of this subtitle</cite>, the Association may not revert charges or District special assessments collected to the General Fund of the City.

The District Management Committee shall be a committee of the Association’s Board.

Notwithstanding any other provision of this subtitle, any and all powers and authority of the Association or its Board regarding the management of the District including, without limitation, the power to direct the expenditure of District funds, shall be delegated to, and shall be exercised by, the District Management Committee.

The voting members of the District Management Committee shall be District assessed business owners, or, when the District assessed business owner is a corporation, limited liability company, partnership, trust, or any other legal entity, representatives of the District assessed business owners of an assessed business in the District that is subject to the District special assessments under this subtitle.

The District Management Committee shall include owners or representatives of District assessed businesses with 1-75 rooms, assessed businesses with 76-200 rooms, and assessed businesses with 201 rooms and more.

The District Management Committee shall include owners or representatives of District assessed businesses from diverse geographic areas throughout the District.

The District Management Committee shall have the power to direct the expenditure of District funds.

The District Management Committee may delegate to the president and chief executive officer of the Association the authority to discharge District Management Committee duties deemed appropriate and necessary by the District Management Committee in accordance with <cite data-path="|14|§20-8">§ 20-8 of this Subtitle</cite>.

The District Management Committee shall select from among its members an individual to serve as the chair of the District Management Committee.

The chair shall serve at the pleasure of the District Management Committee.

The District Management Committee may delegate to the chair those powers and responsibilities that the District Management Committee considers appropriate.

at any meeting of the District Management Committee, a majority of the committee members shall constitute a quorum; and

the affirmative vote of a majority of committee members voting at a meeting for which a quorum is present is required to approve any action by the District Management Committee.

The Board of Estimates shall obtain from the Director of Finance the “assessable base” of the District, which shall include a listing by individual assessed business and a calculation of the sum of assessments on assessed businesses subject to the District special assessment.

The District special assessment shall be levied on all assessed businesses at a uniform rate.

The Board of Estimates shall ensure that the District special assessment proposed in the financial plan is sufficient to pay for the annual expenses of the District.

The Board of Estimates shall determine with finality the assessable base on which the District special assessment will be levied.

Funding for Association operations shall be provided by the District special assessment levied on assessed businesses as determined under subsection (a) of this section.

The District special assessment shall be assessed and collected in conjunction with the City hotel tax assessed and collected by the City, unless otherwise established by the Board of Estimates.

Except as otherwise provided in this subtitle:

The rate of any District special assessment must be approved by a two-thirds vote of the District Management Committee’s members voting at a meeting at which a quorum is present.

For the first full budget year, the rate of the District special assessment shall be set to raise revenues estimated to equal the costs of establishing the District and implementing the initial financial plan.

Subject to paragraph (1) of this subsection, for any year after the first full budget year, the rate of the District special assessment may be adjusted to yield revenues estimated to equal the costs of administering the District as set forth in the financial plan.

All exemptions that exist for the City hotel tax shall apply to the District special assessment.

At the request of a customer and on receipt of supporting documentation, assessed businesses may grant an exemption from the District special assessment for room nights booked pursuant to contracts executed prior to the establishment date of the District.

The District special assessment is levied upon and is a direct, sole obligation of the assessed business.

The assessed business may, in its discretion, pass the District special assessment on to its customers, provided that:

contract to provide varying levels of services to non-assessed businesses in areas adjoining the District;

agree to accept donations, contributions, and other voluntary payments of any kind from exempt partners (collectively, “voluntary payments”), with or without agreements regarding specific services and functions;

enter into agreements with exempt partners to include non-assessed businesses owned by those exempt partners within or adjoining to the District in return for voluntary payments or commitments regarding the provision of similar services and functions for the benefit of non-assessed businesses owned by exempt partners; and

establish rates and charges for the provision of services to exempt partners.

may not be included in the revenues of the City;

are not and may not be deemed to be subject to the budgetary and appropriation process; and

shall be disbursed promptly on collection.

The Department of Finance may collect the District special assessment.

The assessment for the District special assessment may be included as a separate line item on the City hotel tax collection form.

The Department of Finance shall make regular remittances of the amount collected to the Association within 60 days of receipt. A record of all remittances provided to the Association shall be provided to the District Management Committee.

prepare the financial plan for review and approval by the District Management Committee;

implement the approved financial plan and arrange for the collection and disbursement of the District special assessment and all revenues of the Association;

establish procedures and processes necessary to perform the functions called for under the financial plan and the budget;

hire and retain employees, agents, and contractors as needed to perform the president and chief executive officer’s functions for the Association;

exercise the powers granted to the Association by this subtitle, except that the District Management Committee retains final discretion and power with regard to all substantive agreements, contracts, and other arrangements binding on the Association related to District funds; and

exercise the additional rights, powers, and authority delegated to the president and chief executive officer by the District Management Committee.

The financial plan and the District special assessment rate are subject to the approval by the Board of Estimates.

The District Management Committee shall submit all materials at least 2 months before the proposed effective date of a budget or District special assessment.

In considering a proposed budget and District special assessment rate, the Board of Estimates may not exceed or increase either the budget or the District special assessment rate beyond those proposed by the District Management Committee.

The District shall be approved and established following a petition process, as set forth in this section.

Each petition shall include:

Petitions, with a signature of assessed business owners or their duly authorized representatives, shall be returned to the Board of Estimates.

The Board of Estimates shall certify that the District is approved for formation and the Association is approved as the District’s Association, if it determines that:

During the operation of the District, there shall be a 30-day period each year in which assessed business owners may petition to dissolve the District.

The first such 30-day request period shall begin on the second anniversary of the date of establishment of the District. Each successive anniversary of such date shall start the same 30-day period in which dissolution may occur.

In order to dissolve the District, the assessed business owners shall follow a petition process matching the requirements set forth in <cite data-path="|14|§20-15|(a)|(2)">§ 20-15(a)(2) of this subtitle</cite>. Petitions, with signatures of assessed business owners or their duly authorized representatives, shall be returned to the Board of Estimates.

the Board of Estimates shall certify that the District is approved for dissolution, if the Board of Estimates determines that at least:

Upon certification that the District is approved for dissolution, the Association shall cease its operations related to the District, and the District shall cease to exist, at the end of the City’s fiscal year in which the certification occurs.

If the City Council finds that there has been a misappropriation of funds, malfeasance, or violation of law in connection with the management of the District, the City Council shall hold one or more public hearings to consider the dissolution of the District.

At the conclusion of the public hearings, the City Council may determine whether legislative action is necessary to dissolve the District.

terminate operations related to the District in a reasonable fashion; and

arrange for the refunding of all funds not needed to satisfy outstanding obligations and reserves for uncertain obligations and liabilities.