SENATE DOCKET, NO. 1455 FILED ON: 1/17/2019
SENATE . . . . . . . . . . . . . . No. 232
The Commonwealth of Massachusetts
James T. Welch
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act to promote economic development in the Commonwealth.
James T. Welch
Bud L. Williams
SENATE DOCKET, NO. 1455 FILED ON: 1/17/2019
SENATE . . . . . . . . . . . . . . No. 232
By Mr. Welch, a petition (accompanied by bill, Senate, No. 232) of James T. Welch and Bud L. Williams for legislation to promote economic development in the Commonwealth. Economic Development and Emerging Technologies.
The Commonwealth of Massachusetts
In the One Hundred and Ninety-First General Court
An Act to promote economic development in the Commonwealth.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. The General Laws are hereby amended by inserting after chapter 40W the following chapter:-
TOURISM DESTINATION MARKETING DISTRICTS.
Section 1. As used in this chapter the following words shall, unless the context clearly requires otherwise, have the following meanings:
"Commissioner", the commissioner of revenue.
"Elector", a TDMD member, or a natural person designated by a TDMD member to vote by proxy for such TDMD member; provided, however, that such designation shall be in writing and filed with the city or town clerk; provided, further, that only one such proxy may be designated by a TDMD member.
"Lead jurisdiction", the city or town in which the TDMD petition is filed.
"Local municipal governing body", the legislative body of a city or town.
"Lodging business", any person or entity subject to the excise imposed by chapter 64G.
"Lodging business owner", the owner of record, or the owner's authorized representative, of a lodging business.
"Management entity", an entity designated in a TDMD plan to receive funds to carry out and implement the purposes of the TDMD. The TDMD plan shall designate a regional tourism council, as described in section 14 of chapter 23A, as the management entity. The management entity shall be required to furnish a surety bond conditioned on the faithful performance of its duties.
"Special assessment", a payment for supplemental services or improvements specified by the TDMD plan.
"Standard government services", governmental functions, programs, activities, facilities, improvements and other services which a municipality is authorized to perform or provide.
"Supplemental services", the provision of programs, activities, or information in addition to the standard governmental services provided in the TDMD. Supplemental services may include marketing, sales activities or events in addition to other tourism and travel promotion activities.
"TDMD", a tourism destination marketing district formed pursuant to this chapter, which is a geographic area with clearly defined boundaries. A TDMD may include multiple tourism regions served by multiple regional tourism councils; provided, however, that there shall only be one regional tourism council designated as the management entity for each TDMD. Only those lodging businesses meeting the criteria described in the petition and TDMD plan shall be liable for the TDMD's special assessment. The geographic regions within a TDMD need not be contiguous.
"TDMD committee", a committee selected by the management entity's board of directors responsible for implementing and overseeing the ongoing TDMD plan. A majority of the membership of the TDMD committee shall be lodging business owners paying the TDMD assessment.
"TDMD member", a lodging business owner whose lodging business meets the criteria by which lodging businesses are assessed by the TDMD.
"TDMD plan", the strategic plan for the TDMD which sets forth the supplemental services and programs, budget and special assessment structure, the criteria for inclusion of lodging businesses, and the management entity and TDMD committee for the TDMD, and is approved by the local municipal governing body as part of the creation of the TDMD. A TDMD plan shall, within the limitations described in section 9, be updated at least once every 5 years by the TDMD committee, and a copy thereof shall be mailed or delivered to each TDMD member.
The updated TDMD plan shall take effect upon the approval of a majority of the number of votes cast by electors, with each elector's vote having the same weight. Any amendment to the TDMD plan under section 9 shall be deemed to be an update of the TDMD plan.
Section 2. The rights and powers of a management entity related to a TDMD approved by a municipal governing body shall include administering and managing the TDMD; formulating a special assessment structure; accumulating interest; incurring costs or indebtedness; entering into contracts; suing and being sued; employing legal and accounting services; undertaking planning, feasibility and market analyses; developing, implementing, and conducting tourism marketing and promotional activities; and other supplemental services or programs that would further the purposes of this chapter.
All required procedures related to the formation, operation, and renewal of the TDMD shall only be carried out by the lead jurisdiction A lead jurisdiction is authorized to form a TDMD that includes other cities or towns; provided, however, that the lead jurisdiction may not vote to form a TDMD that includes the territorial jurisdiction of another city or town within the TDMD's boundaries until it has received consent, by vote, from such other city or town's local municipal governing body.
Section 3. The organization of a TDMD shall be initiated by a petition of the lodging business owners within the proposed TDMD, which shall be filed in the office of the clerk of the municipality that is to serve as the lead jurisdiction. The petition shall contain:
(1) the signatures of a majority of the TDMD members in the proposed TDMD;
(2) a map delineating the boundaries of the proposed TDMD;
(3) the initial list of lodging businesses to be included in the proposed TDMD. Lodging businesses that commence operations after the formation of the TDMD and meet the criteria by which lodging businesses are assessed by the TDMD shall be included in the TDMD pursuant to section 4;
(4) the proposed TDMD plan, which shall set forth the supplemental services and programs, update mechanism, criteria by which lodging businesses are assessed by the TDMD, and budget and special assessment structures; and
(5) the identity and location of the management entity and the TDMD committee members designated to implement and oversee the ongoing TDMD plan.
A copy of said petition shall be filed with the clerk of the lead jurisdiction within 30 days of receipt of such petition by the clerk of the lead jurisdiction.
Section 4. The local municipal governing body of the lead jurisdiction shall hold a public hearing within 60 days of the receipt of a petition. Written notification of such hearing shall be sent to each TDMD member within the boundary of the proposed TDMD at least 30 days prior to such hearing, by mailing notice to the address listed in the business records of the municipalities proposed to be included within the boundaries of the TDMD or, if no such records exist, by such other method as determined by the commissioner. Notification of the hearing shall also be published for 2 consecutive weeks in a newspaper of general circulation in the area, with the first date of publication beginning at least 30 days prior to such hearing. Such public notice shall contain the proposed boundaries of the TDMD, the proposed special assessment rate, the criteria by which lodging businesses would be assessed by the TDMD, the basis for determining the special assessment and the proposed benefits to be conferred on assessed lodging businesses.
Prior to the public hearing, the local municipal governing body of the lead jurisdiction shall direct the clerk of the lead jurisdiction or the clerk's designee to determine that the establishment criteria has been met as set forth in section 3.
At the public hearing, the local municipal governing body of the lead jurisdiction shall determine if the petition satisfies the purposes set forth and the establishment criteria of this chapter and shall obtain public comment regarding the TDMD plan and the effect the proposed TDMD will have on the lodging business owners within the proposed TDMD. If it appears that said petition is not in conformity with the purposes and establishment criteria, said local municipal governing body shall dismiss the petition. At the public hearing, the presiding officer or clerk of said local municipal governing body shall read into the record the basis for determining the special assessment pursuant to section 7 and the process by which TDMD members may vote not to renew such TDMD.
Within 45 days after the public hearing, said local municipal governing body, in its sole discretion, may by a vote declare the TDMD organized and describe the boundaries and service area of the TDMD. Upon such declaration, the TDMD may commence operations.
Notice of the declaration of the organization of the TDMD shall be mailed or delivered to each TDMD member within the proposed TDMD. The notice shall explain that membership in the TDMD is irrevocable until the failure to renew the TDMD as provided in this section or the dissolution under section 10, and shall include a description of the basis for determining the special assessment, the criteria by which lodging businesses are assessed by the TDMD, the special assessment rate and the proposed supplemental services to be provided by the TDMD.
Such notice shall be published for 2 consecutive weeks in a newspaper of general circulation in the area, the last publication being not more than 30 days after the vote to declare the TDMD organized.
Participation in the TDMD shall be permanent until after the discontinuation of the TDMD as provided in this section, or until the dissolution of the TDMD under section 10. Non- participating lodging business owners in the TDMD shall become TDMD members and shall be assessed on the date that their business meets the criteria by which lodging businesses are assessed by the TDMD. On or before the fifth anniversary of the organization of a newly created TDMD and the fifth anniversary thereafter of the date of the most recent renewal of the TDMD under this section, the TDMD committee of the management entity shall call a renewal meeting of the TDMD members to review the history of the TDMD since its organization or, if applicable, its most recent renewal, to propose an updated TDMD plan to succeed the then current TDMD plan and to consider whether to continue the TDMD. The renewal meeting shall be held at a location within the TDMD. Notice of the meeting shall be given to TDMD members at least 30 days prior to the meeting. The TDMD shall continue after each renewal meeting if a majority of TDMD members who are not more than 30 days in arrears in any payment due to the TDMD and are present at the renewal meeting, in person or by proxy, vote to renew the TDMD.
Such renewal shall last for a term of 5 years commencing on the first day of the next fiscal year of the TDMD.
If the TDMD members elect not to continue the TDMD, the TDMD committee shall conclude the business of the TDMD prior to the sixth anniversary of the TDMD's creation, or of the prior renewal vote, as the case may be, and proceed to discontinue the TDMD. Notice of the discontinuation vote shall be given to the local municipal governing body of the lead jurisdiction, which shall formally declare the TDMD dissolved as of such sixth anniversary; provided, however, that the TDMD shall not be dissolved until it has received the accounts receivable due to the TDMD and until it has satisfied or paid in full all of its outstanding indebtedness, obligations and liabilities, or until funds are on deposit and available therefor, or until a repayment schedule has been formulated and approved by said local municipal governing body.
Except as necessary to conclude the business of the TDMD, the TDMD shall not incur any new or increased financial obligations after such sixth anniversary. Upon the dissolution of a TDMD, the remaining assets shall first be applied to repay obligations of the TDMD, and then in accordance with the TDMD plan, as updated.
Nothing in this section shall prevent the filing of a subsequent petition for a similar project.
Section 5. Each TDMD shall be governed by a management entity's TDMD committee to insure the implementation of the TDMD plan. The management entity and its TDMD committee shall be set forth in the petition and TDMD plan.
Section 6. All lodging businesses described in the petition located within the proposed TDMD shall be considered in the special assessment methodology for the supplemental services and programs as outlined in the TDMD plan.
Section 7. By formal approval of a TDMD, the local municipal governing body of a lead jurisdiction shall adopt the special assessment methodology for the financing of supplemental services submitted in the TDMD plan for the TDMD.
The basis of such special assessment may be determined by a formula utilizing any one or a combination of the following:
(1) different rates for varying classifications of lodging businesses;
(2) different rates for different benefit zones; or
(3) any other formula which meets the objectives of the TDMD.
The special assessment shall be equal to a percentage, not to exceed 3 per cent, of the total amount of rent taxable under chapter 64G.
The methodology for determining the TDMD special assessment shall be set forth in the original petition as required by section 3.
In addition to receiving funds from the TDMD special assessment, the management entity shall be authorized to receive grants, donations or gifts on behalf of the TDMD.
Section 8. Assessed lodging businesses shall pay the TDMD special assessment to the commissioner at the time provided for filing the return required by section 16 of chapter 62C. All sums received by the commissioner under this chapter shall at least quarterly be distributed, credited, and paid by the state treasurer, upon certification of the commissioner, to each management entity in proportion to the amount of such sums received from the respective TDMDs..
The special assessments collected shall be used solely to fund supplemental services identified and approved in the TDMD plan for the TDMD.
Following establishment of the TDMD, if any return by an assessed lodging business is not filed with the commissioner on or before its due date or within any extension of time granted by him, there shall be added to and become a part of the special assessment a penalty of 1 per cent of the amount required to be shown as the special assessment on such return for each month or fraction thereof during which such failure continues, not exceeding, in the aggregate, 25 per cent of said amount.
If any amount of the special assessment is not paid to the commissioner on or before the date prescribed for payment of such special assessment, determined with regard to any extension of time for payment, there shall be added to the amount shown as the special assessment on such return a penalty of 1 per cent of the amount of such special assessment for each month or fraction thereof during which such failure continues, not exceeding, in the aggregate, 25 per cent of said amount..
An annual audit, certified by a certified public accountant, of the revenues generated, the grants, donations and gifts received, and the expenses incurred by the TDMD shall be made within 120 days of the close of the fiscal year, and shall be placed on file with the collector. Such accounting shall be a public record.
The commissioner may promulgate rules and regulations for the assessing, reporting, collecting, remitting and enforcement of the special assessment under this section.
Section 9. At any time after the establishment of a TDMD pursuant to the provisions of this chapter, the TDMD plan upon which the establishment was based may, upon the recommendation of the management entity's TDMD committee, with the concurrence of a majority of the electors, be amended by the local municipal governing body of the lead jurisdiction after compliance with the procedures set forth in this section; provided, however, that a lead jurisdiction may not approve amendments to the boundaries of a TDMD that include the territorial jurisdiction of a city or town not yet included in the TDMD without the consent, by vote, from such other city or town's local municipal governing body.
Amendments to the TDMD plan which (1) provide for additional supplemental services that affect more than 25 per cent of the total annual budget, (2) change the manner by which the TDMD may incur indebtedness, (3) make changes to the special assessment methodology, management entity, or TDMD committee, or (4) change the TDMD boundaries shall be subject to the approval of the local municipal governing body of the lead jurisdiction; provided, however, that said local municipal governing body, after a public hearing, determines that it is in the public interest to adopt said amendments.
Said local municipal governing body shall give notice of the public hearing for amendment. Such notice shall be published for 2 consecutive weeks in a newspaper of general circulation in the area, with the first date of publication beginning at least 30 days prior to such hearing, and shall specify the time and the place of such hearing and the amendments to be considered.
Said local municipal governing body may, within 30 days of the public hearing and, in its sole discretion, declare the amendments approved or disapproved. If approved, such amendments shall be effective upon the date of such approval.
Upon the adoption of any amendment to the TDMD boundaries which increases the size of the TDMD, any assessed lodging business owner to be added to the TDMD shall be notified of the new boundaries of the TDMD in accordance with section 4.
Section 10. Any TDMD established or extended pursuant to this chapter may be disestablished by declaration of the local municipal governing body of the lead jurisdiction in either of the following circumstances:
(1) If said local municipal governing body finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the TDMD, it shall hold a hearing on disestablishment. Notice of the hearing shall be mailed to all TDMD members within the TDMD and shall be published in a newspaper of general circulation in the area at least 14 days prior to such hearing; or
(2) During the operation of the TDMD, there shall be a 30-day period each year in which the TDMD may be dissolved by petition to said local municipal governing body and a subsequent decision by said local municipal governing body to authorize the dissolution. The 30- day period shall begin each successive year on the anniversary of the date said local municipal governing body formally approved the TDMD. In order to be considered by said local municipal governing body, a petition to dissolve a TDMD shall contain the signatures of a majority of the electors. Said local municipal governing body shall hold a public hearing within 30 days of receipt of a completed petition on the issue of dissolution. Notice of the hearing shall be mailed to all TDMD members within the TDMD and shall be published in a newspaper of general circulation in the area at least 14 days prior to such hearing.
Following the public hearing, said local municipal governing body may declare the TDMD dissolved; provided, however, that no TDMD shall be dissolved until it has satisfied or paid in full all of its outstanding indebtedness, obligations, and liabilities; or until funds are on deposit and available therefor; or until a repayment schedule has been formulated and municipally approved therefor. In addition, the TDMD shall be prohibited from incurring any new or increased financial obligations.
Any liabilities, either current or future, incurred as a result of action to accomplish the purposes of the TDMD plan shall not be an obligation of the municipality. Said liabilities shall be paid for entirely from special assessment revenue gained from the assessed lodging businesses in the TDMD.
Upon the dissolution of a TDMD, any remaining revenues derived from the sale of assets acquired with special assessments collected shall be refunded to the lodging businesses owners in the TDMD in which special assessments were charged by applying the same methodology used to calculate the special assessment in the fiscal year in which the TDMD is dissolved in amounts proportionate to each lodging businesses' share of the total special assessments collected in the fiscal year in which the TDMD is dissolved or in accordance with the TDMD plan, as updated.
Section 11. The validity of an assessment levied pursuant to this chapter shall not be contested in any action or proceeding unless the action or proceeding is commenced within 30 days after the formal approval of the TDMD by the local municipal governing body of the lead jurisdiction. Any appeal from a final judgment in an action or proceeding shall be perfected within 30 days after entry of judgment.