GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	2 

HOUSE BILL 706
Committee Substitute Favorable 7/19/95

Short Title:  Various Occupancy Tax Changes.	(Local)

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Sponsors:

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Referred to:

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March 30, 1995

A BILL TO BE ENTITLED
AN ACT AUTHORIZING VARIOUS LOCAL GOVERNMENTS TO LEVY OR INCREASE A ROOM OCCUPANCY TAX SUBJECT TO APPROVAL BY THE VOTERS AND MODIFYING THE METHOD OF APPOINTMENT OF MEMBERS TO THE HAYWOOD COUNTY TOURISM DEVELOPMENT AUTHORITY.
The General Assembly of North Carolina enacts:
PART I.
AUTHORIZATION FOR ADDITIONAL CRAVEN COUNTY
ROOM OCCUPANCY TAX
Section 1.  Levy of Additional Occupancy Tax.  (a)	Authorization.  The Craven County Board of Commissioners may direct the county board of elections to conduct an advisory referendum on the question of whether the county room occupancy tax shall be increased from three percent (3%) to a maximum of six percent (6%).  The election shall be held on a date jointly agreed upon by the two boards and shall be held in accordance with the procedures of G.S. 163-287.  The form of the question to be presented in a special election concerning the increase of the room occupancy tax shall be:
"[ ] FOR   [ ] AGAINST
Increase of the existing three percent (3%) Craven County room occupancy tax to a maximum of six percent (6%)."
If the majority of those voting in a referendum held pursuant to this section vote for the increase of the tax, the Craven County Board of Commissioners may by resolution, after not less than 10 days' public notice and after a public hearing held pursuant thereto, levy a room occupancy tax of up to three percent (3%) of the gross receipts derived from the rental of accommodations taxable under Chapter 980 of the 1983 Session Laws.  This tax shall be in addition to the tax authorized by that Chapter.  Except as provided in this section, the levy, collection, administration, and repeal of the tax authorized by this act shall be in accordance with the provisions of Sections 1 through 5 of Chapter 980 of the 1983 Session Laws.  Craven County may not levy a tax under this act unless it also levies the tax authorized under Chapter 980 of the 1983 Session Laws.
(b)	Use of Proceeds of Additional Tax.  Craven County shall, on a monthly basis, remit to the Craven County Tourism Development Authority the net proceeds, as defined in Section 6 of Chapter 980 of the 1983 Session Laws, of the tax levied under this act.
The Authority shall use the proceeds to pay the construction, debt service, and operations of a convention center.  The Authority shall distribute any proceeds not needed for these purposes as follows:
(1)	Proceeds collected from a business located in a municipality shall be distributed to that municipality.
(2)	Proceeds collected from a business not located in a municipality shall be distributed to Craven County.
Craven County and the municipalities in Craven County shall use the proceeds distributed to them under this section only to promote tourism and for tourism-related expenditures as defined in Section 6 of Chapter 980 of the 1983 Session Laws.
Sec. 2.  Reduction of Tax.  The Craven County Board of Commissioners may adopt a resolution to reduce the tax levied pursuant to this Part.  Reduction of the tax shall be subject to the provisions governing repeal of the tax in Section 8 of Chapter 980 of the 1983 Session Laws.
PART II.
MODIFICATIONS TO EXISTING CRAVEN COUNTY
ROOM OCCUPANCY TAX
Sec. 3.  Section 4 of Chapter 980 of the 1983 Session Laws reads as rewritten:
"Sec. 4.  Administration of Tax.  (a)	Any tax levied under this act is due and payable to the county in monthly installments on or before the 15th day of the month following the month in which the tax accrues.  Every person, firm, corporation, or association liable for the tax shall, on or before the 15th day of each month, prepare and render a return on a form prescribed by Craven County.  The return shall state the total gross receipts derived in the preceding month from rentals upon which the tax is levied.
	(b)	Any person, firm, corporation, or association 
		who fails or refuses to file the return required by this act is subject to the civil and criminal penalties set by G.S. 105-236 for failure to pay or file a return for State sales and use taxes.  The board of commissioners has the same authority to waive the penalties for a room occupancy tax that the Secretary of Revenue has to waive the penalties for State sales and use taxes."
Sec. 4.  Section 6 of Chapter 980 of the 1983 Session Laws reads as rewritten:
"Sec. 6.  Disposition of Taxes Collected.  (a)	Craven County shall remit the net proceeds of the occupancy tax to the Craven County Tourism Development Authority.  The Authority shall use the net proceeds only to promote travel and tourism in Craven County and for tourism-related expenditures.  The following definitions apply in this subsection:
(1)	Net proceeds. – Gross " proceeds less the cost to the county of administering and collecting the tax, not to exceed three percent (3%) of the gross proceeds of the tax.  
(2)	Promote travel and tourism. – To advertise or market an area or activity, publish and distribute pamphlets and other materials, conduct market research, or engage in similar promotional activities that attract tourists or business travelers to the area; the term includes administrative expenses incurred in engaging in the listed activities.
(3)	Tourism-related expenditures. – Expenditures that are designed to increase the use of lodging facilities in a county or to attract tourists or business travelers to the county.  The term includes expenditures to construct, maintain, operate, or market a convention center and any of the following expenditures:
		a.	Marketing and promotions expenses, including test market programs, consultant fees, entertainment, housing expenses, travel expenses, and registration fees;
	b.	Operating expenses for the Visitor Information Center, including postage, telephone, supplies, dues, subscriptions, equipment, rent, and overhead allocation;
	c.	Salaries, benefits, and expenses for Visitor Information Center personnel; and
	d.	Other expenses that aid and encourage visitor promotions, conventions, or tourism.
	(b)	The County Tourism Development Authority may contract with appropriate organizations or agencies to assist it in carrying out the above purposes."
PART III.
AUTHORIZATION FOR COLUMBUS COUNTY
ROOM OCCUPANCY TAX
Sec. 5.  Occupancy Tax.  (a)	Authorization and scope.  The Columbus County Board of Commissioners may direct the county board of elections to conduct an advisory referendum on the question of whether a three percent (3%) room occupancy tax shall be levied in the county.  The election shall be held on a date jointly agreed upon by the two boards and shall be held in accordance with the procedures of G.S. 163-287.  The form of the question to be presented in a special election concerning the levy of the room occupancy tax shall be:
"[ ] FOR   [ ] AGAINST
Levy of a three percent (3%) county room occupancy tax."
If the majority of those voting in a referendum held pursuant to this section vote for the levy of the tax, the Columbus County Board of Commissioners may by resolution, after not less than 10 days' public notice and after a public hearing held pursuant thereto, levy a room occupancy tax of up to three percent (3%) of the gross receipts derived from the rental of any room, lodging, or accommodation furnished by a hotel, motel, inn, tourist camp, or similar place within the county that is subject to sales tax imposed by the State under G.S. 105-164.4(a)(3).  This tax is in addition to any State or local sales tax.  This tax does not apply to accommodations furnished by nonprofit charitable, educational, or religious organizations.
(b)	Collection.  Every operator of a business subject to the tax levied under this section shall, on and after the effective date of the levy of the tax, collect the tax.  This tax shall be collected as part of the charge for furnishing a taxable accommodation.  The tax shall be stated and charged separately from the sales records, and shall be paid by the purchaser to the operator of the business as trustee for and on account of the county.  The tax shall be added to the sales price and shall be passed on to the purchaser instead of being borne by the operator of the business.  The county shall design, print, and furnish to all appropriate businesses and persons in the county the necessary forms for filing returns and instructions to ensure the full collection of the tax.  An operator of a business who collects the occupancy tax levied under this section may deduct from the amount remitted to the county a discount equal to the discount the State allows the operator for State sales and use tax.
(c)	Administration.  The county shall administer a tax levied under this section.  A tax levied under this section is due and payable to the county finance officer in monthly installments on or before the 15th day of the month following the month in which the tax accrues.  Every person, firm, corporation, or association liable for the tax shall, on or before the 15th day of each month, prepare and render a return on a form prescribed by the county.  The return shall state the total gross receipts derived in the preceding month from rentals upon which the tax is levied.
A return filed with the county finance officer under this section is not a public record and may not be disclosed except in accordance with G.S. 153A-148.1 or G.S. 160A-208.1.
(d)	Penalties.  A person, firm, corporation, or association who fails or refuses to file the return or pay the tax required by this section is subject to the civil and criminal penalties set by G.S. 105-236 for failure to pay or file a return for State sales and use taxes.  The Columbus County Board of Commissioners has the same authority to waive the penalties for a room occupancy tax that the Secretary of Revenue has to waive the penalties for State sales and use taxes.
(e)  Distribution and use of tax revenue.  Columbus County shall, on a quarterly basis, remit the net proceeds of the occupancy tax to the Columbus County Tourism Board.  The Board shall use the funds remitted to it under this subsection to promote travel and tourism in Columbus County and for tourism-related expenditures.
The following definitions apply in this subsection:
(1)	Net proceeds. – Gross proceeds less the cost to the county of administering and collecting the tax, as determined by the finance officer, not to exceed seven percent (7%) of the gross proceeds.
(2)	Promote travel and tourism. – To advertise or market an area or activity, publish and distribute pamphlets and other materials, conduct market research, or engage in similar promotional activities that attract tourists or business travelers to the area; the term includes administrative expenses incurred in engaging in the listed activities.
(3)	Tourism-related expenditures. – Expenditures that are designed to increase the use of lodging facilities in a county or to attract tourists or business travelers to the county.  The term includes expenditures to construct, maintain, operate, or market a convention or meeting facility, a visitors' center, or a coliseum and other expenditures that, in the judgment of the Authority, will facilitate and promote tourism.
(f)  Effective date of levy.  A tax levied under this section shall become effective on the date specified in the resolution levying the tax.  That date must be the first day of a calendar month, however, and may not be earlier than the first day of the second month after the date the resolution is adopted.
(g)  Repeal.  A tax levied under this section may be repealed by a resolution adopted by the Columbus County Board of Commissioners.  Repeal of a tax levied under this section shall become effective on the first day of a month and may not become effective until the end of the fiscal year in which the repeal resolution was adopted.  Repeal of a tax levied under this section does not affect a liability for a tax that was attached before the effective date of the repeal, nor does it affect a right to a refund of a tax that accrued before the effective date of the repeal.
Sec. 6.  Tourism Board.  (a)	Appointment.  When the board of commissioners adopts a resolution levying a room occupancy tax under this act, if it has not already created a county Tourism Board under Chapter 706 of the 1993 Session Laws, it shall adopt a resolution creating that Board, which shall be a public authority under the Local Government Budget and Fiscal Control Act.  The resolution shall provide for the membership of the Board including the members' qualifications and terms of office, and for the filling of vacancies on the Board.  The board of commissioners may designate one member of the Board as chair and shall determine the compensation, if any, to be paid to members of the Board.
The Board shall meet at the call of the chair and shall adopt rules of procedure to govern its meetings.  The Finance Officer for Columbus County shall be the ex officio finance officer of the Board.
(b)	Duties.  The Board shall expend the net proceeds of the tax levied under this act for the purposes provided in this Part.  The Board shall promote travel, tourism, and conventions in the county, sponsor tourist-related events and activities in the county, and finance tourist-related capital projects in the county.
(c)	Reports.  The Board shall report quarterly and at the close of the fiscal year to the board of commissioners on its receipts and expenditures for the preceding quarter and for the year in such detail as the board may require.
PART IV.
AUTHORIZATION FOR CITY OF MOUNT AIRY
ROOM OCCUPANCY TAX
Sec. 7.  Occupancy Tax.  (a)	Authorization and scope.  The Mount Airy Board of Commissioners may direct the county board of elections to conduct an advisory referendum within the city on the question of whether a three percent (3%) room occupancy tax shall be levied in the city.  The election shall be held on a date jointly agreed upon by the two boards and shall be held in accordance with the procedures of G.S. 163-287.  The form of the question to be presented in a special election concerning the levy of the room occupancy tax shall be:
"[ ] FOR   [ ] AGAINST
Levy of a three percent (3%) city room occupancy tax."
If the majority of those voting in a referendum held pursuant to this section vote for the levy of the tax, the Mount Airy Board of Commissioners may by resolution, after not less than 10 days' public notice and after a public hearing held pursuant thereto, levy a room occupancy tax of up to three percent (3%) of the gross receipts derived from the rental of any room, lodging, or accommodation furnished by a hotel, motel, inn, tourist camp, or similar place within the city that is subject to sales tax imposed by the State under G.S. 105-164.4(a)(3).  This tax is in addition to any State or local sales tax.  This tax does not apply to accommodations furnished by nonprofit charitable, educational, or religious organizations or by nonprofit summer camps when the accommodations are furnished in furtherance of their nonprofit purpose.
(b)	Collection.  Every operator of a business subject to the tax levied under this section shall, on and after the effective date of the levy of the tax, collect the tax.  This tax shall be collected as part of the charge for furnishing a taxable accommodation.  The tax shall be stated and charged separately from the sales records, and shall be paid by the purchaser to the operator of the business as trustee for and on account of the city.  The tax shall be added to the sales price and shall be passed on to the purchaser instead of being borne by the operator of the business.  The city shall design, print, and furnish to all appropriate businesses and persons in the city the necessary forms for filing returns and instructions to ensure the full collection of the tax.  An operator of a business who collects the occupancy tax levied under this section may deduct from the amount remitted to the city a discount equal to the discount the State allows the operator for State sales and use tax.
(c)	Administration.  The city shall administer a tax levied under this section.  A tax levied under this section is due and payable to the city finance officer in monthly installments on or before the 15th day of the month following the month in which the tax accrues.  Every person, firm, corporation, or association liable for the tax shall, on or before the 15th day of each month, prepare and render a return on a form prescribed by the city.  The return shall state the total gross receipts derived in the preceding month from rentals upon which the tax is levied.
A return filed with the city finance officer under this section is not a public record and may not be disclosed except in accordance with G.S. 160A-208.1.
(d)	Penalties.  A person, firm, corporation, or association who fails or refuses to file the return or pay the tax required by this section is subject to the civil and criminal penalties set by G.S. 105-236 for failure to pay or file a return for State sales and use taxes.  The Mount Airy Board of Commissioners has the same authority to waive the penalties for a room occupancy tax that the Secretary of Revenue has to waive the penalties for State sales and use taxes.
(e)  Distribution and use of tax revenue.  The City of Mount Airy shall, on a quarterly basis, remit the net proceeds of the occupancy tax to the Mount Airy Tourism Development Authority.  The Authority shall use the funds remitted to it under this subsection only to promote travel and tourism in Mount Airy.  The following definitions apply in this section:
(1)	Net proceeds. – Gross proceeds less the cost to the city of administering and collecting the tax, as determined by the finance officer, not to exceed seven percent (7%) of the gross proceeds.
(2)	Promote travel and tourism. – Advertise and market activities, develop and distribute promotional materials, conduct market research, and engage in other similar promotional activities that attract tourists or business travelers to the area.  The term also includes administration of the Mount Airy Tourism Development Authority.
(f)  Effective date of levy.  A tax levied under this section shall become effective on the date specified in the resolution levying the tax.  That date must be the first day of a calendar month, however, and may not be earlier than the first day of the second month after the date the resolution is adopted.
(g)  Repeal.  A tax levied under this section may be repealed by a resolution adopted by the Mount Airy Board of Commissioners.  Repeal of a tax levied under this section shall become effective on the first day of a month and may not become effective until the end of the fiscal year in which the repeal resolution was adopted.  Repeal of a tax levied under this section does not affect a liability for a tax that was attached before the effective date of the repeal, nor does it affect a right to a refund of a tax that accrued before the effective date of the repeal.
Sec. 8.  Tourism Development Authority.  (a)	Appointment and membership.  When the board of commissioners adopts a resolution levying a room occupancy tax under this act, it shall also adopt a resolution creating a Mount Airy Tourism Development Authority, which shall be a public authority under the Local Government Budget and Fiscal Control Act.  The board of commissioners shall appoint the following eight members to the Authority:
(1)	Two individuals who are owners or operators of taxable tourist accommodations in the city.
(2)	Two residents of the city who have experience in the promotion of travel and tourism.
(3)	Two residents of the city who are members of the Mount Airy Chamber of Commerce, selected by the Mount Airy Chamber of Commerce.
(4)	One member of the board of commissioners.
(5)	The city finance officer, who shall serve as an ex officio, nonvoting member.
Members of the Authority shall serve without compensation and shall serve for a term of three years.  Vacancies shall be filled in the same manner as the original appointment.  Members appointed to fill vacancies shall serve for the remainder of the unexpired term.  An individual may serve as a member for no more than two consecutive terms.  The members shall elect a chair from among the membership, who shall serve for three years.  The Authority shall meet at the call of the chair and shall adopt rules of procedure to govern its meetings.
(b)	Duties.  The Authority shall expend the net proceeds of the tax levied under this act for the purposes provided in this Part.  The Authority shall promote travel and tourism in the city.  In performing its duties, the Authority may contract with any person, firm, or agency to advise and assist it, and may recommend to the board of commissioners that city staff be employed for this advice and assistance.  Any city staff employed upon a recommendation of the Authority shall be hired and supervised by the Authority, which shall pay the salaries and expenses of this staff.
(c)	Reports.  The Authority shall report quarterly and at the close of the fiscal year to the board of commissioners on its receipts and expenditures for the preceding quarter and for the year in such detail as the board may require.
PART V.
AUTHORIZATION FOR ADDITIONAL LINCOLN COUNTY
ROOM OCCUPANCY TAX
Sec.  9.  Levy of Additional Occupancy Tax.  (a)	Authorization.  The Lincoln County Board of Commissioners may direct the county board of elections to conduct an advisory referendum on the question of whether the county room occupancy tax shall be increased from three percent (3%) to a maximum of six percent (6%).  The election shall be held on a date jointly agreed upon by the two boards and shall be held in accordance with the procedures of G.S. 163-287.  The form of the question to be presented in a special election concerning the increase of the room occupancy tax shall be:
"[ ] FOR   [ ] AGAINST
Increase of the existing three percent (3%) Lincoln County room occupancy tax to a maximum of six percent (6%)."
If the majority of those voting in a referendum held pursuant to this section vote for the increase of the tax, the Lincoln County Board of Commissioners may by resolution, after not less than 10 days' public notice and after a public hearing held pursuant thereto, levy a room occupancy tax of up to three percent (3%) of the gross receipts derived from the rental of accommodations taxable under Chapter 549 of the 1993 Session Laws.  This tax shall be in addition to the tax authorized by that Chapter.  Except as provided in this section, the levy, collection, administration, use, and repeal of the tax authorized by this act shall be in accordance with the provisions of Section 1 of Chapter 549 of the 1993 Session Laws.  Lincoln County may not levy a tax under this act unless it also levies the tax authorized under Chapter 549 of the 1993 Session Laws.  As provided in Chapter 549 of the 1993 Session Laws, the combined occupancy tax rates for Lincoln County and any city or town that is located in Lincoln County and is authorized to levy a room occupancy tax may not exceed six percent (6%).
(b)	Reduction of Tax.  The Lincoln County Board of Commissioners may adopt a resolution to reduce the tax levied pursuant to this section.  Reduction of the tax shall be subject to the provisions governing repeal of the tax in Section 1 of Chapter 549 of the 1993 Session Laws.
PART VI.
HAYWOOD COUNTY TOURISM DEVELOPMENT AUTHORITY
Sec. 10.  Section 15 of Chapter 908 of the 1983 Session Laws reads as rewritten:
"Sec. 15.  Appointments, Duties of Tourism Development Authority.  (a)	When the Haywood County Board of Commissioners adopts a resolution levying a room occupancy tax pursuant to this Part, it shall also adopt a resolution creating a County Tourism Development Authority composed of nine voting members appointed as follows:
(1)	Three members who own or operate hotels, motels, or other accommodations with more than 20 rental units.
(2)	Three members who own or operate hotels, motels, or other accommodations with 20 or fewer rental units.
(3)	Three tourist-oriented business members at large.
All members of the Authority shall be appointed by the Haywood County Board of Commissioners.  The Board of Commissioners shall designate three of its initial appointees to serve a one-year term, three to serve a two-year term, and three to serve a three-year term.  Thereafter, all members shall serve three-year terms.  Vacancies shall be filled by the Board of Commissioners subject to the qualifications established above for the vacating member.  Members appointed to fill vacancies shall serve the remainder of the unexpired term for which they are appointed to fill.
	(b)	The members of the Tourism Development Authority shall elect from its membership a chair.  The Authority shall meet at the call of the chair and shall adopt rules of procedure to govern its meetings.  The finance officer of Haywood County shall serve ex officio as accountant for the Authority.
	(c)	The Tourism Development Authority shall report quarterly and at the close of the fiscal year to the Board of Commissioners on its receipts and disbursements for the preceding quarter and for the year in such detail as the Board may require."
PART VII.
EFFECTIVE DATE
Sec. 11.  This act is effective upon ratification.