California
In California, tourism improvement districts are formed under the Property and Business Improvement District Law of 1994, the Parking and Business Improvement Area Law of 1989, or a similar enabling ordinance adopted by a charter city. California districts are also subject to other laws designed to ensure approval by business owners paying the assessment and accountability by the managing body to those business owners.
Tourism improvement districts are formed with a majority of assessed businesses consenting and the local government's approval. Funds raised are returned to a non-profit corporation which is under contract with the local government to manage those funds. Several accountability mechanisms ensure that funds are spent in accordance with a specifically defined district plan that includes marketing and sales programs approved by the businesses paying into the district. The two main reasons for TIDs' growing popularity among tourism-related businesses are:
- Funds cannot be spent on programs that don't benefit the businesses paying the assessment
- Funds cannot be diverted by the government for other programs
As of November 2010, there were over 91 known local tourism improvement districts in California, including:
- San Diego Tourism Marketing District
- Napa Valley Tourism Improvement District
- Sacramento County Tourism Improvement District
- Marin County Tourism Improvement District
- South Lake Tahoe Tourism Business Improvement District
- San Jose Hotel Business Improvement Area
- Santa Barbara South Coast Tourism Business Improvement District
- Long Beach Tourism Business Improvement Area
- Del Mar Tourism Business Improvement District
- Newport Beach Tourism Improvement District
- Monterey County Tourism Improvement District
- Mendocino County Lodging Business Improvement District
- Oceanside Tourism Marketing District
Most districts encompass either a city or county, although some include multiple cities or a county and the cities within it. California's first tourism improvement district was formed in West Hollywood in 1992. The recent tourism improvement district was formed in Santa Barbara in September, 2010. California's tourism improvement districts range from small 5-hotel community districts to major cities with several hundred hotels and its budget ranges from $100,000 to over $30 million.
One of California's most noticeable tourism improvement districts is the San Diego Tourism Marketing District. The district funded the hugely popular “Happy Happens” advertising campaign. The San Diego Tourism Marketing District funds many programs and events designed to bring overnight visitors to San Diego, including Comic Con and the Holiday Bowl.
A lawsuit filed in 2012 by San Diegans for Open Government challenges the renewal of the San Diego Tourism Marketing District. The lawsuit filed by Cory Briggs, a public interest lawyer, claims that the assessment is basically a tax and therefore is not valid under California proposition 26 which requires a two-thirds supermajority to pass any tax. In January 2016 the judge sided with San Diegans for Open Government that the nonprofit has legal standing to pursue the case. The case now moves on to be argued on the merits of the lawsuit.[1]