2022 -- S 2773

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LC004839

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO TOWNS AND CITIES -- TOURISM IMPROVEMENT DISTRICTS

     

     Introduced By: Senators Miller, Goodwin, Ruggerio, McCaffrey, Lombardo, Kallman,
Zurier, Sosnowski, Gallo, and Coyne

     Date Introduced: March 24, 2022

     Referred To: Senate Housing & Municipal Government

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby

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amended by adding thereto the following chapter:

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CHAPTER 59.1

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TOURISM IMPROVEMENT DISTRICTS

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     45-59.1-1. Short Title.

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     This act shall be known and may be cited as the "Tourism Improvement Districts Act."

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     45-59.1-2. Legislative findings and purpose.

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     (a) It is found and declared that:

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     (1) Tourism is a major source of employment, income, and tax revenues in this state, and

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the expansion of the tourism industry is vital to the growth of the state's economy.

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     (2) The tourism industry is important to this state, not only because of the number of people

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it serves and the vast human, financial, and physical resources it employs, but because of the

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benefits tourism and related activities confer on individuals and on society as a whole.

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     (3) Local government oversight and resources are needed to implement a coordinated and

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effective marketing program consistent with the needs of specific areas of this state, and to optimize

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the considerable investment of time, energy, capital, and resources being made by the tourism

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industry.

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     (b) It is the purpose of this chapter to authorize municipalities to create tourism

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improvement districts for the purpose of providing the services and undertaking the activities

 

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described in this chapter to supplement, not supplant, existing funding provided by the state and

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municipalities implementing a tourism investment district.

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     45-59.1-3. Definitions.

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     As used in this chapter:

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     (1) "Activity" means any programs or services provided for the purpose of conferring

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specific benefits upon the businesses that are located in the tourism improvement district and to

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which an assessment is charged.

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     (2) "Assessment" means a levy for the purpose of providing activities and improvements

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that will provide benefits to businesses located within a tourism improvement district that are

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subject to the tourism improvement district assessment. Assessments may be based on a percent of

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gross business revenue, a fixed dollar amount per transaction, or any other reasonable method based

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upon benefit, and approved by the municipality.

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     (3) "Authorizing resolution" means a resolution adopted by the municipality that authorizes

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the formation or renewal of a tourism improvement district and the levying of assessments.

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     (4) "Business" means any business establishment of the type or class that is described in

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the tourism improvement district plan and the authorizing resolution.

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     (5) "Business owner" means any person recognized by the municipality as the owner of the

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business. The municipality has no obligation to obtain other information as to the ownership of

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businesses, and its determination of ownership shall be final and conclusive for the purposes of this

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chapter. Wherever this chapter requires the signature of the business owner, the signature of the

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authorized representative of the business owner shall be sufficient.

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     (6) "Improvement" means an acquisition, construction, installation, or maintenance

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relating to tangible property, with an estimated useful life of five (5) years or more that is designed

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to provide benefits to assessed businesses.

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     (7) "Lead municipality" means the municipality in which the tourism improvement district

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plan is filed for the establishment of a tourism improvement district where such district includes

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more than one municipality.

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     (8) "Municipality" means any city or town in the State of Rhode Island.

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     (9) "Owners' association" means a new or existing nonprofit corporation charged with

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promoting tourism within the area of the tourism improvement district that is under contract with

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the municipality to administer the tourism improvement district and implement activities and

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improvements specified in the tourism improvement district plan.

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     (10) "Tourism improvement district" means a tourism improvement district established

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pursuant to this chapter.

 

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     (11) "Tourism improvement district plan" means a plan as prescribed in § 45-59.1-5.

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     45-59.1-4. Boundaries of a tourism improvement district -- Requirement of consent.

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     (a) Municipalities may create tourism improvement districts pursuant to this chapter.

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     (b) A municipality may form a tourism improvement district that assesses any business

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located within the boundaries as determined by the municipality. Should any lead municipality

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choose to include other municipalities within the boundaries of a tourism improvement district,

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each participating municipality must provide written consent from the governing body of each

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participating municipality. In the event there are multiple consenting municipalities, upon

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successful receipt of consent from all participating municipalities, the lead municipality shall

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govern and administer the tourism improvement district.

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     (c) The boundaries of any proposed tourism improvement district may overlap with the

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boundaries of another tax, assessment, or special tax assessment area or management district

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created pursuant to Rhode Island law.

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     45-59.1-5. Contents of tourism improvement district plan.

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     A tourism improvement district plan shall include, but not be not limited to, all of the

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following:

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     (1) A map that identifies the tourism improvement district boundaries in sufficient detail

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to allow a business owner to reasonably determine whether a business is located within the tourism

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improvement district boundaries. The boundaries of a tourism improvement district may overlap

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with other tourism improvement districts established pursuant to this chapter.

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     (2) The name of the proposed tourism improvement district.

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     (3) The name of the owners' association.

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     (i) Where a newly formed nonprofit corporation is designated as the owners' association,

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the certificate of incorporation or bylaws shall provide that the owners' association's governing

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board shall be composed of a majority of business owners, or their authorized representatives, who

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pay the tourism improvement district assessment.

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     (ii) Where an existing nonprofit corporation is designated as the owners' association, the

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nonprofit shall create a committee composed of a majority of businesses owners, or their authorized

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representatives, who shall be charged with managing the funds raised by the tourism improvement

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district and fulfilling the obligations of the tourism improvement district plan.

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     (iii) The owners' association shall have full discretion to select the specific activities and

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improvements within the authorized parameters of the tourism improvement district plan that shall

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be funded with tourism improvement district assessment revenue.

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     (4) The activities and improvements proposed for each year of operation of the tourism

 

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improvement district and the estimated cost thereof. If the activities and improvements proposed

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for each year of operation are the same, a description of the first year's proposed activities and

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improvements and a statement that the same activities and improvements are proposed for

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subsequent years shall satisfy the requirements of this subsection.

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     (5) The estimated annual amount proposed to be expended for activities and improvements

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during each year of operation of the tourism improvement district. This amount may be estimated

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based upon the assessment rate. If the estimated annual amount proposed to be expended in each

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year of operation of the tourism improvement district is not significantly different, the amount

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proposed to be expended in the initial year and a statement that a similar amount applies to

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subsequent years shall satisfy the requirements of this subsection.

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     (6) The proposed source or sources of financing, including the proposed method and basis

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of levying the assessment in sufficient detail to allow each business owner to calculate the amount

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of the assessment to be levied against their business. The tourism improvement district plan may

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set forth increases in assessments for any year of operation of the tourism improvement district.

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Any business of the type or class of businesses that are subject to the assessment that commences

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operations during the tourism improvement district's term shall be subject to the assessment.

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     (7) The time and manner of collecting the assessments and any interest or penalties for

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non-payment.

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     (8) The specific number of years in which assessments will be levied. In a new tourism

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improvement district, the maximum number of years shall be ten (10). Upon renewal, a district

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shall have a term not to exceed twenty (20) years. The tourism improvement district plan may set

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forth specific increases in assessments for each year of operation of the district;

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     (9) Any proposed rules to be applicable to the tourism improvement district.

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     (10) A definition describing the types or classes of businesses to be included in the tourism

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improvement district and subject to the tourism improvement district assessment.

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     45-59.1-6. Initiation of proceedings -- Petition for a proposed tourism improvement

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district.

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     (a) Upon submission to the clerk of a municipality of a written petition, the municipality

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may initiate proceedings to form a tourism improvement district by adopting a resolution

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expressing its intention to form a tourism improvement district. The written petition may be signed

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by either:

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     (1) Business owners or their authorized representatives who will pay sixty percent (60%)

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or more of the assessments proposed to be levied; or

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     (2) Business owners or their authorized representatives who constitute sixty percent (60%)

 

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or more of the total rooms within the tourism improvement district.

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     (b) The petition of business owners required under subsection (a) of this section shall

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include a summary of the tourism improvement district plan. That summary shall include all of the

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following:

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     (1) A map showing the boundaries of the tourism improvement district.

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     (2) The types or classes of businesses that will be subject to the assessment.

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     (3) The assessment rate for the types or classes of business that will be subject to the

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assessment.

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     (4) Information specifying where the complete tourism improvement district plan can be

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obtained.

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     (5) Information specifying that the complete tourism improvement district plan shall be

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furnished upon request.

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     45-59.1-7. Hearing on establishment or renewal.

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     (a) If the municipality has received a successful petition pursuant to § 45-59.1-6, the

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municipality shall hold a public hearing on the establishment or renewal of the tourism

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improvement district prior to adoption of the authorizing resolution. Notice of the public hearing

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shall be mailed to the owners of the businesses proposed to be subject to the assessment.

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     (b) The municipality shall provide at least thirty (30) days' written notice of the public

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hearing at which the municipality proposes to establish or renew the tourism improvement district

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and levy the assessment.

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     (c) A protest may be made by any business owner that will be subject to the proposed

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assessment. Every protest shall be in writing and shall be filed with the municipality at or before

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the time fixed for the public hearing. The municipality may waive any irregularity in the form or

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content of any written protest. A written protest may be withdrawn in writing at any time before

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the conclusion of the public hearing. Each written protest shall contain a description of the business

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in which the person subscribing the protest is interested that shall be sufficient to identify the

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business and, if a person subscribing is not shown on the official records of the municipality as the

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owner of the business, the protest shall contain or be accompanied by written evidence that the

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person subscribing is the owner of the business or the authorized representative. A written protest

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that does not comply with this section shall not be counted in determining a majority protest. If

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written protests are received from sixty percent (60%) or more of business owners or their

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authorized representatives, as determined via the same majority calculation method chosen in § 45-

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59.1-6, and protests are not withdrawn so as to reduce the protests to less than sixty percent (60%),

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the municipality shall not levy the assessment.

 

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     (d) If a tourism improvement district includes multiple municipalities or portions thereof,

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the notice and hearing process set forth in this section shall be conducted by the lead municipality.

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     45-59.1-8. Changes to proposed assessment.

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     At the conclusion of the public hearing to establish or renew a tourism improvement

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district, the municipality may adopt, revise, change, reduce, or modify the proposed assessments,

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the boundaries of the tourism improvement district, or the types or classes of businesses within the

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tourism improvement district that would be subject to the assessment. Proposed assessments may

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only be revised by reducing them, either independently or together in a uniform manner. The

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proposed tourism improvement district boundary may only be revised to exclude territory that will

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not benefit from the proposed activities and improvements. The types or classes of businesses that

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will be subject to the proposed assessment may only be revised to exclude the business types or

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classes that will not benefit from the proposed activities and improvements. Any modifications,

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revisions, reductions, or changes to the proposed tourism improvement district plan shall be

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reflected in the tourism improvement district plan prior to the municipality's adoption of the

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resolution creating or renewing the tourism improvement district.

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     45-59.1-9. Authorizing resolution.

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     (a) If the municipality, following the public hearing, decides to establish or renew a

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proposed tourism improvement district, the municipality shall adopt an authorizing resolution that

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shall include, but is not limited to, all of the following:

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     (1) A brief description of the proposed activities and improvements, the amount of the

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proposed assessment, a statement as to the types or classes of businesses that will be subject to the

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assessment, and a description of the exterior boundaries of the tourism improvement district, which

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may be made by reference to any plan or map that is on file with the municipality. The descriptions

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and statements need not be detailed and shall be sufficient if they enable an owner to generally

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identify the nature and extent of the activities and improvements and the location and extent of the

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tourism improvement district.

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     (2) The time and place where the public hearing was held concerning the establishment or

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renewal of the tourism improvement district.

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     (3) A determination regarding any protests received. The municipality shall not establish

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or renew the tourism improvement district or levy assessments if a majority protest was received

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as described in § 45-59.1-7(c).

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     (4) A statement that the businesses in the tourism improvement district established by the

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resolution shall be subject to any amendments to this chapter.

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     (5) A statement that the activities and improvements to be conferred on businesses in the

 

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tourism improvement district will be funded by the proceeds of assessments. The revenue from the

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assessments within a tourism improvement district shall not be used for any purpose other than the

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purposes specified in the tourism improvement district plan, as authorized or modified by the

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municipality at the hearing concerning establishment or renewal of the tourism improvement

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district.

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     (6) A finding that the businesses within the tourism improvement district will benefit from

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the activities and improvements funded by the tourism improvement district assessments.

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     (b) The adoption of the authorizing resolution shall constitute the levy of assessments in

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each of the years referred to in the tourism improvement district plan.

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     45-59.1-10. Expiration of tourism improvement district term.

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     If a tourism improvement district expires due to the term specified in § 45-59.1-5(a)(8), a

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new tourism improvement district plan may be created and the tourism improvement district may

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be renewed pursuant to this chapter.

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     45-59.1-11. Time and manner of collection of assessments -- Delinquent payments.

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     (a) The collection of the assessments levied pursuant to this chapter shall be made at the

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time and in the manner set forth by the municipality in the authorizing resolution. All delinquent

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payments for assessments levied pursuant to this chapter may be charged interest and penalties.

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     (b) Any delinquent payments for assessments, along with any interest or penalties, shall

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constitute a debt owed the municipality and may be collectable by the municipality as a debt under

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law.

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     (c) Any delinquent payments for assessments, interest, or penalties recovered under this

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section shall be expended in the same manner as provided in the authorizing resolution for proceeds

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of the assessment.

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     45-59.1-12. Validity of assessment.

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     The validity of an assessment levied under this chapter shall not be contested in any action

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or proceeding unless the action or proceeding is commenced within thirty (30) days after the

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authorizing resolution is adopted pursuant to § 45-59.1-9. Any appeal from a final judgment in an

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action or proceeding shall be perfected within thirty (30) days after the entry of judgment.

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     45-59.1-13. Certification to establish levels of services and funding.

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     The tourism improvement district is intended to provide supplemental funding and services

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and not to supplant existing funding or services. After establishing a tourism improvement district,

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the municipality shall not decrease the level of publicly funded tourism promotion services in a

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tourism improvement district existing prior to the creation of such tourism improvement district.

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     45-59.1-14. Modification to the tourism improvement district plan.

 

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     (a) The owners' association, at any time, may request that the municipality modify the

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tourism improvement district plan. Any modification of the tourism improvement district plan shall

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be made pursuant to this chapter. The tourism improvement district plan shall not be modified,

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except by the request of the owners' association and only in the manner requested by the owners'

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association.

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     (b) Upon the written request of the owners' association, the municipality may modify the

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tourism improvement district plan by adopting a resolution determining to make the modifications

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after conducting one public hearing on the proposed modifications. If the modification includes the

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levy of a new or increased assessment or the expansion of the tourism improvement district's

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geographic boundaries, the municipality shall comply with all procedures required for

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establishment of a new tourism improvement district provided by this chapter. Notice of all other

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public hearings pursuant to this section shall comply with both of the following:

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     (1) The resolution of intention to modify shall be published once at least seven (7) days

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before the public hearing in a newspaper of general circulation in the municipality.

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     (2) A complete copy of the resolution of intention to modify shall be mailed by first class

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mail, at least ten (10) days before the public hearing, to each business owner affected by the

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proposed modification.

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     (c) The municipality shall adopt a resolution of intention to modify which states the

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proposed modification prior to the public hearing required by this section. The public hearing shall

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be held not more than ninety (90) days after the adoption of the resolution of intention to modify.

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     45-59.1-15. Reports.

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     (a) The owners' association shall cause to be prepared a report for each fiscal year, except

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the first year, for which assessments are to be levied and collected to pay the costs of the activities

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described in the report. The owners' association's first report shall be due ninety (90) days after the

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first year of operation of the tourism improvement district.

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     (b) The report shall be filed with the municipality and shall refer to the tourism

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improvement district by name, specify the fiscal year to which the report applies, and, with respect

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to that fiscal year, shall contain all of the following information:

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     (1) The activities and improvements to be provided for that fiscal year.

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     (2) An estimate of the cost of providing the activities and improvements for that fiscal year.

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     (3) The method and basis of levying the assessments in sufficient detail to allow each

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business owner to estimate the amount of the assessment to be levied against his or her business

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for that fiscal year.

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     (4) The estimated amount of any surplus or deficit revenues to be carried over from a

 

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previous fiscal year.

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     (c) The municipality may approve the report as filed by the owners' association or may

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make recommendations for approval to the annual report within forty-five (45) days of receiving

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the annual report. The annual report shall be final and approved within ninety (90) days following

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its submission by the owners' association to the municipality.

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     45-59.1-16. Renewal of tourism improvement district.

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     (a) Any tourism improvement district previously established whose term has expired, or

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will expire, may be renewed by following the procedures for establishment as provided in this

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chapter.

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     (b) Upon renewal, any remaining revenues derived from assessments, or any revenues

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derived from the sale of assets acquired with the revenues, shall be transferred to the renewed

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tourism improvement district.

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     (c) There is no requirement that the boundaries, assessments, activities, or improvements

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of a renewed tourism improvement district be the same as the original or prior tourism improvement

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district.

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     45-59.1-17. Dissolution of district.

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     (a) A tourism improvement district established or extended pursuant to this chapter may be

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dissolved by adoption of a resolution by the municipality pursuant to this section when there is no

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indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the tourism

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improvement district, and when either of the following circumstances apply:

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     (1) The municipality finds there has been misappropriation of funds or other malfeasance.

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     (2) The municipality finds there has been a violation of law in connection with the

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management of the tourism improvement district.

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     (b) During each year of operation of the tourism improvement district, there shall be a thirty

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(30) day period in which businesses subject to the assessment may request dissolution of the

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tourism improvement district. The first period shall begin two (2) years after the date of

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establishment of the tourism improvement district and shall continue for thirty (30) days. Each

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successive year of operation of the tourism improvement district shall have such a thirty (30) day

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period. Upon the written petition of sixty percent (60%) or more of business owners or their

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authorized representatives, as determined via the same majority calculation method chosen in § 45-

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59.1-6, the municipality shall pass a resolution of intention to disestablish the tourism improvement

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district. The municipality shall give public notice of any hearing on disestablishment.

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     (c) The municipality shall adopt a resolution of intention to disestablish the tourism

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improvement district prior to the public hearing required by this section. The resolution shall state

 

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the reason for the potential dissolution, shall state the time and place of the public hearing, and

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shall contain a proposal to dispose of any assets acquired with the revenues of the assessments

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levied within the tourism improvement district. The notice of the hearing on dissolution required

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by this section shall be given by mail to the owner of each business subject to assessments in the

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tourism improvement district. The municipality shall conduct the public hearing not less than thirty

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(30) days after mailing the notice to the business owners. The public hearing shall be held not more

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than sixty (60) days after the adoption of the resolution of intention. At the conclusion of the public

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hearing, the municipality shall adopt a resolution dissolving the tourism improvement district.

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     (d) After holding a noticed hearing, the municipality shall notify the owners' association to

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remedy the findings of the municipality within thirty (30) days. Such public hearing shall be held

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and notice given to the benefited businesses and the owners' association not less than thirty (30)

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days prior to the hearing. If the owners' association does not remedy the violations within thirty

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(30) days of notification, or the municipality has not approved a plan to remedy the violation, at

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the conclusion of a hearing conducted under this section, the municipality may vote to terminate

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the tourism improvement district.

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     45-59.1-18. Remaining revenues.

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     Upon the dissolution or expiration without renewal of a tourism improvement district, any

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remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or

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derived from the sale of assets acquired with the revenues, shall be spent in accordance with the

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tourism improvement district plan or shall be refunded to the owners of the businesses then located

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and operating within the tourism improvement district in which assessments were levied by

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applying the same method and basis that was used to calculate the assessments levied in the fiscal

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year in which the tourism improvement district is disestablished or expires.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- TOURISM IMPROVEMENT DISTRICTS

***

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     This act would enable municipalities, with a supermajority consensus of impacted

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businesses, to create tourism improvement districts, a tourism focused alternative to district

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management authorities in § 45-59-1 et seq., designed to provide supplementary financial support

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for marketing programs to increase economic activity in the tourism industry, particularly in

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regards to occupancy and room rates in lodging businesses.

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     This act would take effect upon passage.

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