94.836.  Tourism tax on transient guests in hotels and motels (Marston, Matthews, Steele) — procedure, ballot, use of revenues — repeal of tax. — 1.  The governing body of any city of the fourth classification with more than six hundred but less than seven hundred inhabitants and located in any county of the second classification with more than nineteen thousand seven hundred but less than nineteen thousand eight hundred inhabitants or any city of the fourth classification with more than two thousand two hundred but less than two thousand three hundred inhabitants and located in any county of the third classification without a township form of government and with more than twenty thousand but less than twenty thousand one hundred inhabitants may impose a tax on the charges for all sleeping rooms paid by the transient guests of hotels or motels situated in the city or a portion thereof, which shall be not more than five percent per occupied room per night, except that such tax shall not become effective unless the governing body of the city submits to the voters of the city at a state general or primary election a proposal to authorize the governing body of the city to impose a tax under this section.  The tax authorized in this section shall be in addition to the charge for the sleeping room and all other taxes imposed by law, and shall be stated separately from all other charges and taxes.

  2.  The ballot of submission for the tax authorized in this section shall be in substantially the following form:

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If a majority of the votes cast on the question by the qualified voters voting thereon are in favor of the question, then the tax shall become effective on the first day of the second calendar quarter following the calendar quarter in which the election was held.  If a majority of the votes cast on the question by the qualified voters voting thereon are opposed to the question, then the tax shall not become effective unless and until the question is resubmitted under this section to the qualified voters of the city and such question is approved by a majority of the qualified voters of the city voting on the question.

  3.  At least sixty-five percent of the revenue generated by the tax authorized in this section shall be used by the city solely for tourism purposes, and not more than thirty-five percent of the revenue generated may be used for infrastructure improvements.  All revenue generated by the tax shall be deposited in a special trust fund and shall be used solely for the designated purposes.  If the tax is repealed, all funds remaining in the special trust fund shall continue to be used solely for the designated purposes.  Any funds in the special trust fund which are not needed for current expenditures may be invested by the governing body in accordance with applicable laws relating to the investment of other city funds.

  4.  The governing body of any city that has adopted the sales tax authorized in this section may submit the question of repeal of the tax to the voters on any date available for elections for the city.  The ballot of submission shall be in substantially the following form:

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If a majority of the votes cast on the proposal are in favor of repeal, that repeal shall become effective on December thirty-first of the calendar year in which such repeal was approved.  If a majority of the votes cast on the question by the qualified voters voting thereon are opposed to the repeal, then the sales tax authorized in this section shall remain effective until the question is resubmitted under this section to the qualified voters of the city, and the repeal is approved by a majority of the qualified voters voting on the question.

  5.  Whenever the governing body of any city that has adopted the sales tax authorized in this section receives a petition, signed by ten percent of the registered voters of the city voting in the last gubernatorial election, calling for an election to repeal the sales tax imposed under this section, the governing body shall submit to the voters of the city a proposal to repeal the tax.  If a majority of the votes cast on the question by the qualified voters voting thereon are in favor of the repeal, that repeal shall become effective on December thirty-first of the calendar year in which such repeal was approved.  If a majority of the votes cast on the question by the qualified voters voting thereon are opposed to the repeal, then the tax shall remain effective until the question is resubmitted under this section to the qualified voters of the city and the repeal is approved by a majority of the qualified voters voting on the question.

  6.  As used in this section, "transient guests" means a person or persons who occupy a room or rooms in a hotel or motel for thirty-one days or less during any calendar quarter.