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LEGISLATIVE UPDATE: S8938 (Tourism Recovery Improvement Districts) Gaining Momentum

Sep 21, 2020

Senate Bill 8938 Would Enable The Establishment of Tourism Recovery Improvement Districts

Thanks to the initiative and legislative leadership of New York State DMO executives, NY S 8938 appears towards be gaining momentum to eventual approval in the New York State Senate. The bill, introduced by Senator Tim Kennedy (63rd District) was referred to the Rules Committee on August 24. In recent weeks co-sponsors Senators Jamaal T. Bailey (36th District) and Leroy Comrie (14th District) have signed on in support of the legislation.

"Much of what has transpired to date has been spearheaded by Discover Long Island's Kristen Jarnagin, and Buffalo's Patrick Kaler, working in concert with their fellow DMO executives." observes Don Jeffries, President & CEO of Visit Rochester and President of the NYS DMO Group.

This legislation has critical significance for the future of New York State's Tourism Industry, and every TPA, DMO, CVB, attraction, marketing firm and business that touches the visitor should take note and take action to indicate their position on this legislation with their local representatives.

"It would be important for members of the tourism industry to communicate with their representatives that this legislation should move now, during the fall session, as a COVID-19 relief issue," says Jill Delaney, President & CEO of Discover Albany.

Details and a download of the bill text are provided below.


S8938 (Tourism Recovery Improvement Districts):

AN ACT to amend the town law, in relation to authorizing local municipalities to establish tourism recovery improvement districts:
CLICK HERE to download the complete text of S8938 as a PDF.


DETAILS

See Assembly Version of this Bill: A10801
Current Committee: Senate Rules

Law Section: Town Law
Laws Affected: Add §190-h, Town L

SUMMARY

Authorizes local municipalities to establish tourism recovery improvement districts.

SPONSOR MEMO

BILL NUMBER: S8938

SPONSOR: KENNEDY

TITLE OF BILL: An act to amend the town law, in relation to authorizing local municipalities to establish tourism recovery improvement districts

PURPOSE OR GENERAL IDEA OF BILL: To help stimulate the tourism industry during- and post-COVID-19

SUMMARY OF PROVISIONS:

Section 1. Amends the town law by adding a new section 190-h establishing Tourism Recovery Improvement Districts with subsections 1-15 specifying the following:

Subsection 1. Sets the definitions as used in this article.

Subsection 2. Explains the contents of the district plan.

Subsection 3. Authorizes municipalities to adopt a law to establish or extend a district in the municipality.

Subsection 4. Sets the powers that the local legislative body may establish for the district subject to the provisions of the article.

Subsection 5. Sets the filing process for the district plan.

Sub-section 6. Sets the notice and hearing process for municipalities once the district plan is filed.

Subsection 7. Sets the process for the establishment and extension of a district plan.

Subsection 8. Sets the process for publication, filing, and the judicial review of a district plan.

Subsection 9. Sets the amendment process for a district plan upon recommendations from the district management association.

Subsection 10. Sets how expenses from that district that are incurred shall be paid for.

Subsection 11. Establishes that the proceeds for any business assessment that is imposed must be remitted to the district management association within 60 from when they are collected. Also defines how these proceeds must be used.

Subsection 12. Defines the "district management association" as used in this article.

Subsection 13. Sets the dissolution process of the district plan.

Subsection 14. States if any section of this article is ruled invalid by a judge of any court, it shall not affect or invalidate the remaining provisions of any sections of this article or the application of any part thereof to any other person or circumstance. Each provision of each section of this article are severable

Section 2: Sets the effective date. (Immediately upon passage)

JUSTIFICATION:

COVID-19 has decimated the tourism industry in New York State and throughout the country. In May of 2019, hotels in New York State had a 76.7% occupancy rate; one year later in May 2020, this same occupancy rate has been nearly cut in half to 35.9%.

Prior to the COVID-19 pandemic, New York enjoyed a growing tourism industry that had been attracting people from all over the world to experience its beautiful beaches, cities, and mountains. District Management Associations like Discover Long Island have helped grow tourism industries across the country, and in the case of Discover Long Island, have generated an estimated $740 million in tax revenue and have helped to foster a $6.1 billion industry.

These District Management Associations are an integral component of the tourism industry and would benefit greatly from a new revenue source in order to help revitalize the tourism industry during the COVID-19 pandemic and in the years following as well. This bill simply authorizes municipalities to adopt a local law to establish a tourism recovery improvement district for the purposes of raising revenue through business assessments on businesses which benefit from district improvements facilitated by the District Management Association.

Decisions regarding surcharge amounts and types of fees imposed are exclusively reserved to local municipalities and their duly-elected officials. In other parts of the country, tourism districts like these have been successful in attracting overnight visitors, raising awareness about a given destination, sponsoring special events and programs that can bring in large-group business to a specific area.

At a time of great uncertainty, this legislation has the potential to generate critically-needed revenue for local tourism initiatives that will help boost local economies and support the small businesses which are the bedrock of our communities.

PRIOR LEGISLATIVE HISTORY: None

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.