GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

H	3 

HOUSE BILL 1748
Committee Substitute Favorable 6/22/00
Senate Finance Committee Substitute Adopted 6/30/00

Short Title:  Granville/Banner Elk Tax Use.	(Local)

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Sponsors:

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Referred to: 

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May 25, 2000

A BILL TO BE ENTITLED
AN ACT TO CHANGE THE PURPOSES FOR WHICH THE GRANVILLE COUNTY OCCUPANCY TAX CAN BE USED FOR A LIMITED PERIOD OF TIME, TO ESTABLISH A TOURISM DEVELOPMENT AUTHORITY, TO MAKE TECHNICAL CHANGES, TO CHANGE THE PURPOSES FOR WHICH THE BANNER ELK OCCUPANCY TAX MAY BE USED, AND TO MAKE CONFORMING CHANGES.
The General Assembly of North Carolina enacts:
Section 1.  Chapter 454 of the 1993 Session Laws reads as rewritten:
"Section 1.  Occupancy tax.
(a)	Authorization and Scope.
The Granville County Board of Commissioners may levy a room occupancy tax of 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.  The combined occupancy tax rates for Granville County and any city or town that is located in Granville County and is authorized to levy a room occupancy tax may not exceed six percent (6%).
(b)	Administration.
A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 153A-155.  The penalties provided in G.S. 153A-155 apply to a tax levied under this section.
			(e)	Distribution and Use of Tax Revenue.
”The county shall, on a quarterly basis, remit the net proceeds of the occupancy tax to the Granville County Tourism Development Authority.  The Authority may use up to two-thirds of the funds remitted to it under this subsection for the following tourism-related expenditures designed to attract tourists and business travelers from outside the county into the county:  (i)	developing facilities for fishing tournaments, skiing tournaments, and boating events; (ii) constructing facilities for festivals; (iii) constructing tournament grade multipurpose athletic facilities; and (iv) financing other similar capital expenditures.  The Authority shall use the remaining net proceeds to promote travel and tourism in Granville County.
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 three percent (3%) 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 county.  The term includes administrative expenses incurred in engaging in the listed activities. ”
(3)	Tourism-related expenditures. – Expenditures that, in the judgment of the Authority, are designed to increase the use of lodging facilities in the county or to attract tourists or business travelers to the county.  The term includes tourism-related capital expenditures.
		Sec. 1.1.  Granville Tourism Development Authority.
(a)	Appointment and Membership.
The Board of County Commissioners shall adopt a resolution creating a county Tourism Development Authority, which shall be a public authority under the Local Government Budget and Fiscal Control Act.  The Authority shall be composed of five members who shall serve for staggered three-year terms.  The members shall be appointed as follows: three appointed by the Granville County Board of Commissioners, one appointed by the Oxford City Council, and one appointed by the Creedmoor City Council.  One of the three members appointed by the Granville County Board of Commissioners must be an owner or manager of a Granville County hotel or motel.  The remaining members must be individuals who are currently active in the promotion of travel and tourism in the county.  Vacancies shall be filled in the same manner as original appointments, and members appointed to fill vacancies shall serve for the remainder of the unexpired term.  The resolution shall determine the compensation, if any, to be paid to the members of the Authority.
At the first meeting of each calendar year, the membership of the Authority shall elect one member to serve as chair until the first meeting of the following year.  The Authority shall meet at the call of the chair and shall adopt rules of procedure to govern its meetings.  The Finance Officer for Granville County shall be the ex officio finance officer of the Authority.
(b)	Duties.
The Authority shall expend the net proceeds of the tax levied under this act for the purposes provided in this act.  The Authority 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 Authority shall report quarterly and at the close of the fiscal year to the Granville County Board of Commissioners on its receipts and expenditures for the preceding quarter and for the year in such detail as the board may require.
Sec. 2.  This act is effective upon ratification."
Section 2.  To achieve the staggered terms required on the Granville County Tourism Development Authority, as provided in Section 1 of this act, the initial terms of the members of the Authority shall be as follows:  The initial term of the member who is an owner or manager of a hotel or motel shall be three years.  The Granville County Board of Commissioners must designate one of its remaining appointees to serve an initial term of two years and the other to serve an initial term of one year.  The remaining initial members shall serve terms of three years each.  Thereafter, all terms shall be three years.
Section 3.  Section 1(a) of Chapter 454 of the 1993 Session Laws, as amended by Section 1 of this act, reads as rewritten:
"(a)	Authorization and Scope.
The Granville County Board of Commissioners may levy a room occupancy tax of five percent (5%) 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.  The combined occupancy tax rates for Granville County and any city or town that is located in Granville County and is authorized to levy a room occupancy tax may not exceed six percent (6%)."
Section 4.  Section 1(e) of Chapter 454 of the 1993 Session Laws, as amended by Section 1 of this act, reads as rewritten:
"(e)	Distribution and Use of Tax Revenue.
The county shall, on a quarterly basis, remit the net proceeds of the occupancy tax to the Granville County Tourism Development Authority.  The Authority shall use at least two-thirds of the funds remitted to it under this subsection 	to promote travel and tourism in Granville County and shall use the remainder 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 three percent (3%) 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 county.  The term includes administrative expenses incurred in engaging in the listed activities.
(3)	Tourism-related expenditures. – Expenditures that, in the judgment of the Authority, are designed to increase the use of lodging facilities in the county or to attract tourists or business travelers to the county.  The term includes tourism-related capital expenditures."
Section 5.  G.S. 153A-155(g) reads as rewritten:
"(g)	This section applies only to Avery, Brunswick, Craven, Currituck, Davie, Granville, Madison, Nash, Person, Randolph, Scotland, and Transylvania Counties."
Section 6.  Sections 1 through 6 of Chapter 318 of the 1989 Session Laws, as amended by Chapter 428 of the 1993 Session Laws, read as rewritten:
"Section 1.  Occupancy Tax.  The Town Council of Banner Elk may levy a room occupancy and tourism development tax.  
The occupancy and tourism development tax that may be levied under this act shall be three percent (3%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation in the Town of Banner Elk 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.  The tax shall not apply to any room, lodging, or accommodation supplied to the same person for a period of 90 continuous days or more or to sleeping rooms or lodging furnished by charitable, educational, or religious institutions or by nonprofit organizations.
"Sec. 2.  Administration of Tax.  (a)	A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 160A-215.  The penalties provided in G.S. 160A-215 apply to a tax levied under this section. 
	(c)	All persons, firms, corporations, and associations who rent either their own dwelling or dwellings or rooms for other persons are required to submit to the town a list of all rented properties.  This list shall include the owner's name and current address and the location of the rental property.  The list shall be submitted semi-annually on or before November 30 and May 30.  Failure to file this listing shall subject the person, firm, corporation, or association to a civil penalty of fifty dollars ($50.00).
"Sec. 3.  Collection of Tax.  	
(b)	Collection of the tax shall be the responsibility of the Banner Elk Tax Administrator.  In his or her discretion, the tax administrator may proceed against an operator whose occupancy tax is delinquent employing all remedies for collection of tax as set out in G.S. 105-367, 105-368, 105-374, and 105-375.  In employing the remedies under those statutes, the tax levied under this act shall be treated as a property tax on personal property.  The Tax Administrator may audit occupancy tax reports as he or she deems necessary utilizing information available to him or her in property tax matters.
"Sec. 5.  Disposition of Taxes Collected.  The town council shall use at least one-third of the room occupancy tax proceeds to promote travel and tourism and shall use the remainder of the proceeds only for tourism-related expenditures.  The term ‘promote travel and tourism' means to advertise or market an area or activity, publish and distribute pamphlets and other materials, conduct market research, or engage in or sponsor similar promotional activities that attract tourists or business travelers to the area; the term includes administrative expenses incurred in engaging in the listed activities.  The term ‘tourism-related expenditures' means expenditures that are designed to increase the use of lodging facilities, recreational facilities, and business establishments in the town or to attract tourists or business travelers to the town, and expenditures incurred by the town in collecting the tax.  The term includes expenditures to construct, maintain, operate, or market a convention or meeting facility, a visitors' center, a coliseum, sidewalks, or public parking areas, and other expenditures that, in the judgment of the town council, will facilitate and support tourism.
The town may retain its costs of collecting the tax, not to exceed seven percent (7%) of the amount collected.
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Section 7.  G.S. 160A-215 reads as rewritten:
"§ 160A-215.  Uniform provisions for room occupancy taxes.
(a)	Scope. – This section applies only to municipalities the General Assembly has authorized to levy room occupancy taxes.  For the purpose of this section, the term "city”means a municipality.
(b)	Levy. – A room occupancy tax may be levied only by resolution, after not less than 10 days' public notice and after a public hearing held pursuant thereto.  A room occupancy tax 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.
(c)	Collection. – Every operator of a business subject to a room occupancy tax shall, on and after the effective date of the levy of the tax, collect the tax.  The 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 taxing 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 taxing 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 a room occupancy tax may deduct from the amount remitted to the taxing city a discount equal to the discount the State allows the operator for State sales and use tax.
(d)	Administration. – The taxing city shall administer a room occupancy tax it levies.  A room occupancy tax is due and payable to the city finance officer in monthly installments on or before the fifteenth 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 fifteenth day of each month, prepare and render a return on a form prescribed by the taxing city.  The return shall state the total gross receipts derived in the preceding month from rentals upon which the tax is levied.  A room occupancy tax return filed with the city finance officer 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.
(e)	Penalties. – A person, firm, corporation, or association who fails or refuses to file a room occupancy tax return or pay a room occupancy tax as required by law 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 governing board of the taxing city 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.
(f)	Repeal or Reduction. – A room occupancy tax levied by a city may be repealed or reduced by a resolution adopted by the governing body of the city.  Repeal or reduction of a room occupancy tax 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 resolution was adopted.  Repeal or reduction of a room occupancy tax does not affect a liability for a tax that was attached before the effective date of the repeal or reduction, nor does it affect a right to a refund of a tax that accrued before the effective date of the repeal or reduction.
(g)	This section applies only to the Cities of Goldsboro, Greensboro, Lumberton, Mount Airy, Shelby, and Statesville, to the Towns of Banner Elk, Mooresville, and St. Pauls, and to the municipalities in Brunswick County."
Section 8.  Sections 3 and 4 of this act become effective October 1, 2007, and apply to taxes collected on or after that date.  Section 6 of this act becomes effective on the first day of the first month after it becomes law and applies to taxes collected on or after that date.  Section 7 of this act is effective when it becomes law.  The remainder of this act becomes effective October 1, 2000, and applies to taxes collected on or after that date.