Arroyo Grande Municipal Code Ch. 3.46 Tourism Business Improvement District Law

This chapter shall be known as the "City of Arroyo Grande tourism business improvement district law."

(Ord. No. 651, § 2, 5-14-2013)

[The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:]

"City council" means the city council of the city of Arroyo Grande.

"City advisory board" means the advisory body appointed by the city council, pursuant to this chapter.

"District" means the city of Arroyo Grande tourism business improvement district (or "AGTBID") created by this chapter and as delineated in Section 3.44.040.

"Law" means the Parking and Business Improvement Area Law of 1989, California Streets and Highways Code Sections 36500 et seq., as amended.

"Lodging" means any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, motel, inn, bed and breakfast or vacation rental, vacation room rentals or homestay that pays transient occupancy tax. For purposes of this chapter, the definition of "lodging" shall not include RV parks.

"Operator" means the person who is the proprietor of the lodging business, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee or any other capacity. Where the operator performs his/her functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator for the purposes of this chapter and shall have the same duties and liabilities as his/her principal. Compliance with the provisions of this chapter by either the principal or the managing agent shall, however, be considered to be compliance by both.

"Rent" means the consideration charged, whether or not received, for the occupancy of space in a lodging business, valued in money, whether to be received in money, goods, labor, or otherwise, including all receipts, cash, credits, property and services of any kind or nature, without any deduction therefrom whatsoever.

"Transient" means any person who exercises occupancy or who is entitled to occupancy, by reason of concession, permit, right of access, license, or other agreement for a period of thirty (30) consecutive calendar days or less, counting portions of calendar days as full days.

(Ord. No. 651, § 2, 5-14-2013; Ord. No. 667, § 2, 12-9-2014)

The purpose of forming the AGTBID is to provide revenue to defray the costs of services, activities and programs promoting lodging businesses in the AGTBID through the promotion of scenic, recreational, cultural and other attractions in the AGTBID as a tourist destination. It is the intent of this chapter to provide a supplemental source of funding for the promotion of lodging operations in the AGTBID and it is not intended to supplant any other existing sources of revenues that may be used by the city of Arroyo Grande for the promotion of the lodging industry.

Funds collected from assessments imposed on businesses within the AGTBID may be used for the following improvements and activities that benefit the businesses located and operating within the AGTBID, as authorized by law:

A. Improvements, including the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more, including, but not limited to the following:

1. Parking facilities, benches, trash receptacles, street lighting, decorations including public art and cultural enhancements, parks, and fountains.

B. Promotion and furnishing of activities, including but not limited to:

1. Promotion of public events which benefit businesses within the AGTBID and which take place on or in public spaces within the AGTBID;

2. Furnishing of music in any public place within the AGTBID;

3. Promotion of tourism within the AGTBID; and

4. Activities which benefit businesses located and operating within the AGTBID.

(Ord. No. 651, § 2, 5-14-2013; Ord. No. 2025-008, § 3, 8-26-2025)

The boundaries of the AGTBID shall be the boundaries of the city of Arroyo Grande.

(Ord. No. 651, § 2, 5-14-2013)

The AGTBID shall include all lodging businesses located within the AGTBID boundaries. The assessment to be levied on all lodging businesses within the AGTBID boundaries shall be based upon two percent of the rent charged by the operator per occupied room per night for all transient occupancies. The assessment shall be collected quarterly, based on two percent of the rent charged by the operator per occupied room per night in revenues for the previous quarter. New lodging businesses within the boundaries shall not be exempt from the levy of assessment authorized by Section 36531 of the law. Assessments pursuant to the AGTBID shall not be included in rent revenue for purpose of determining the amount of the assessment. The value of extended stays of more than thirty (30) consecutive calendar days shall be exempt from the levy of assessment. Stays by persons who are otherwise exempt from the imposition of a transient occupancy tax as defined in AGMC Section 3.24.040 shall be exempt from the assessment.

Each operator shall, on or before the last day of the month following the close of each calendar quarter, or at the close of any shorter reporting period which may be established by the director of administrative services, make a return to the director of administrative services, on forms provided by him or her, of the total rents charged and received and the amount of assessment collected for transient occupancies. At the time the return is filed, the full amount of the assessment collected shall be remitted to the director of administrative services. The director of administrative services may establish shorter reporting periods for any operator if he or she deems it necessary in order to insure collection of the assessment, and he or she may require further information in the return.

(Ord. No. 651, § 2, 5-14-2013; Ord. No. 667, § 1, 12-9-2014)

All of the assessments imposed pursuant to this chapter shall be reviewed by the Arroyo Grande city council annually, based upon the annual report prepared by the advisory board appointed pursuant to this chapter and Sections 36530 and 36533 of the law. After approval of the annual report, the Arroyo Grande city council shall follow the hearing process as outlined in Section 36534 of the law. At the public hearing the Arroyo Grande city council shall hear and consider all protests. If written protests are received from lodging businesses in the district paying fifty (50) percent or more of the annual assessment, no further proceedings to continue the levy of assessments shall take place. The protests shall be weighted based upon the annual assessment for the prior year by each lodging business.

(Ord. No. 651, § 2, 5-14-2013)

The Arroyo Grande city council hereby levies and imposes and orders the collection of an initial assessment to be imposed upon lodging businesses in the district described above, which shall be calculated based upon two percent of the rent charged by operators as described in Section 3.44.050 above. Such levy shall begin on July 1, 2013.

(Ord. No. 651, § 2, 5-14-2013)

The authorized uses of revenue are defined in section 3.46.030 above. The total revenue from the levy of assessments within the AGTBID shall not be used to provide improvements or activities outside the AGTBID or for any purpose other than the purposes specified in section 3.46.030. The proceeds of the lodging business assessment and any other voluntary contributions shall be spent to administer the AGTBID pursuant to this chapter 3.46, including the calculation, collection, and enforcement of assessments. All funds shall be expended consistent with the purposes of this section. Funds remaining at the end of any AGTBID term may be used in subsequent years in which AGTBID assessments are levied as long as they are used consistent with the requirements of this section. The Arroyo Grande City Council shall consider recommendations made by the advisory board created by section 3.46.100 of this chapter as to the use of assessment revenue.

(Ord. No. 651, § 2, 5-14-2013; Ord. No. 2025-008, § 4, 8-26-2025)

Any lodging business that fails to remit any assessment imposed by this chapter within the time required shall be subject to the following:

A. Original Delinquency. Any operator who shall fail to remit any assessment imposed by the provisions of this chapter within the time required shall pay a penalty in the amount of ten (10) percent of the assessment in addition to the amount of the assessment.

B. Continued Delinquency. Any operator who shall fail to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty in the amount of ten (10) percent of the assessment in addition to the amount of the assessment and the ten (10) percent first imposed.

C. Fraud. If it is determined that the nonpayment of any remittance due pursuant to the provisions of this chapter is due to fraud, a penalty in the amount of twenty-five (25) percent of the amount of the assessment shall be added thereto in addition to the penalties set forth in subsections A. and B. of this section.

D. Interest. In addition to the penalties imposed, any operator who shall fail to remit any assessment imposed by the provisions of this chapter shall pay interest at the rate of one-half of one percent per month, or fraction thereof, on the amount of the assessment, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

E. Penalties Merged with Assessment. Every penalty imposed, and such interest as accrues, pursuant to the provisions of this section shall become a part of the assessment required to be paid by the provisions of this chapter.

Any and all remedies available to the city of Arroyo Grande for non-payment of assessments or taxes shall be applicable in the event of non-payment of an assessment under this chapter. Any penalty and interest fees collected from a lodging business due to delinquency shall go to the city of Arroyo Grande and be used for any lawful purpose.

(Ord. No. 651, § 2, 5-14-2013)

The city council shall appoint an advisory board pursuant to Section 36530 of the California Streets and Highways Code. The city council may, by resolution, adopt bylaws governing the membership and operations of the advisory board. The advisory board shall review the implementation of this chapter, the implementation of programs and activities funded through this chapter, and advise the city council on the amount of the district's assessments and on the services, programs, and activities to be funded by the assessments, and shall perform such other duties as required by the law, including preparing the annual report required by Section 36533 of the law. The annual report shall be submitted to the city council no later than the last day of march each year. The city council shall ensure that the advisory board has timely access to all public information regarding collection, disbursement, and uses of the funds collected under the terms of this ordinance.

(Ord. No. 651, § 2, 5-14-2013)

The city of Arroyo Grande by ordinance may modify the provisions of this chapter and may disestablish the district or parts of the district, after adopting a resolution of intention to such effect. Such resolution shall describe the proposed change or changes, or indicate that it is proposed to disestablish the district, and shall state the time and place of a hearing to be held by the Arroyo Grande city council to consider the proposed action. If the operators of lodging businesses which pay fifty (50) percent or more of the assessments in the district file a petition with the city clerk of the city of Arroyo Grande requesting the Arroyo Grande city council to adopt a resolution of intention to modify or disestablish the district, the Arroyo Grande city council shall adopt such resolution and act upon it as required by law. Signatures on such petition shall be those of a duly authorized representative of the operators of lodging businesses in the district. In the event the resolution proposes to modify any of the provisions of this chapter, including changes in the existing assessments or in the existing boundaries of the district, such proceedings shall terminate if protest is made by the operators of lodging businesses which pay fifty (50) percent or more of the assessments in the district, or in the district as it is proposed to be enlarged.

In the event the resolution proposes disestablishment of the district, the Arroyo Grande city council shall disestablish the district, unless at such hearing protest against disestablishment is made by the operators of lodging businesses paying fifty (50) percent or more of the assessments in the district.

(Ord. No. 651, § 2, 5-14-2013)