A. A state-authorized arts and cultural district may be created by the municipality in which the proposed arts and cultural district will be located only if the proposed district is approved by the commission.

B. A municipally authorized arts and cultural district may be created by a municipality with a population greater than fifty thousand in which the proposed arts and cultural district will be located if the proposed district meets the criteria set forth in Subsection C of this section.

C. An arts and cultural district shall:

(1)     be in a geographically contiguous area that ranges in size from a portion of a municipality to a regional district with a special coherence;

(2)     be distinguished by physical and cultural resources that play a vital role in the life and development, including economic and cultural development, of a community;

(3)     focus on a cultural compound, a major art institution, art and entertainment businesses, an area with arts and cultural activities or cultural or artisan production; and

(4)     be engaged in promotion, preservation and educational aspects of the arts and culture of that locale and contribute to the public through interpretive, educational and recreational uses.