HB 2873 Arizona House · 57th Legislature - First Regular Session

tourism improvement areas; municipalities; counties

HB 2873 establishes a framework for Arizona municipalities and counties to create "tourism improvement areas" (TIAs) where lodging businesses (like hotels) can be assessed a fee on room rentals to fund tourism promotion. To form a TIA, lodging business owners must petition with signatures representing 67% of available rooms, and the proposed fee structure must be based on benefit (e.g., property size or room count). Funds collected must directly support tourism activities - such as marketing, events, or infrastructure - that enhance local tourism and economic development, but cannot replace standard government services. The bill also sets strict deadlines (30 days) for challenging fee validity and requires transparent planning details for each proposed TIA.

Issues: ✓ Budget & Taxes

Bill status introduced 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 12, 2025 Last action Feb 27, 2025

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What changed between versions

Introduced Version → House Engrossed Version · 7 edits

MODERATE

The bill was amended to clarify definitions and streamline the formation process for tourism improvement areas. Key changes include redefining the 'owners' board' to require a majority of lodging business owners, adding new assessment collection methods, and establishing a 30-day window for lodging owners to request dissolution of the area.

Scope change

The bill's scope remains focused on tourism improvement areas in municipalities and counties, but the amendments clarify who can manage these areas and how they can be dissolved.

DEFINITION

Added a new definition for 'owners' board' requiring it to be composed of at least a majority of lodging business owners, replacing the previous 'owners' association' definition.

REQUIREMENT

Amended the petition requirements to ensure lodging business owners represent at least 67% of total rooms within the proposed area.

Added a requirement that the destination marketing organization managing the area must file an annual report with the governing body within 120 days after the end of the fiscal year.

FISCAL

Added new subsections allowing assessment rates to vary by property size or number of rooms and specifying that assessments may be based on fixed amounts, per transaction, percentage of sales, or combinations thereof.

ENFORCEMENT

Added a 30-day appeal period for challenging the validity of lodging business assessments and clarified that appeals must be perfected within 30 days of final judgment.

TIMELINE

Extended the initial term of a tourism improvement area to a maximum of 10 years with subsequent renewals also capped at 10 years per renewal.

ELIGIBILITY

Added provisions allowing municipalities to form tourism improvement areas in unincorporated county territory only with the consent of the county board of supervisors.

Floor votes

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Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Feb 27, 2025

Lower · Passed

DPA

lower

Feb 18, 2025

Lower · Passed

DPA

lower

1 primary · 0 co-sponsors