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GMAT Sentence Correction (SC) | Re: Nine months after the county banned jet skis and other water

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Dear egmat,

Appreciate your great advise.

Between options C and D, why D is correct?
Below is my observation:
C. that it violates state laws that allowed ---> allowed modifies laws
D. that it violated state laws allowing ---> allowing modifies laws

is it because of violating has happened in the past? hence need to use past tense?
Many thanks

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