A BILL TO BE ENTITLED
AN ACT to modify the occupancy tax for pasquotank county and elizabeth city.
The General Assembly of North Carolina enacts:
SECTION 1.  Chapter 175 of the 1987 Session Laws reads as rewritten:
"Section 1.  Pasquotank occupancy tax. (a) Authorization and Scope. The Pasquotank County Board of Commissionersmay levy a room occupancy tax of no more than three percent (3%) of the gross receipts derived from the rental in Pasquotank County of any room, lodging, or similar accommodation subject to sales tax under G.S. 105‑164.4(a)(3).
This tax does not apply to accommodations furnished by nonprofit charitable, educational, benevolent, or religious organizations when furnished in furtherance of their nonprofit purpose. This tax is in addition to any State or local sales tax.
(a1)	Additional Occupancy Tax. – In addition to the tax authorized by subsection (a) of this section, the Pasquotank County Board of Commissioners may levy a room occupancy and tourism development tax of up to three percent (3%) of the gross receipts derived from the rental of accommodations taxable under that subsection. Pasquotank County may not levy a tax under this subsection unless it also levies a tax under subsection (a) of this section. 
	
(c)	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 A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 153A‑155.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)	Use and Distribution of First Three Cents (3¢). – The finance officer of Pasquotank County shall, on a quarterly basis, remit the net proceeds of the occupancy tax levied under subsection (a) of this section to the Elizabeth City‑Pasquotank County Tourism Development Authority. The Authority shall use the net proceeds of the occupancy tax levied under subsection (a) of this section as follows:
(1)	Fifty percent (50%) to promote travel and tourism.
(2)	Twenty‑five percent (25%) for tourism‑related expenditures that are recommended by the Elizabeth City City Council and are approved by the Authority.
(3)	Twenty‑five percent (25%) for tourism‑related expenditures that are recommended by the Pasquotank County Board of Commissioners and are approved by the Authority. 
(e1)	Use and Distribution of the Proceeds from the Additional Occupancy Tax. – The finance officer of Pasquotank County shall, on a quarterly basis, remit the net proceeds of the occupancy tax levied under subsection (a1) of this section to the Elizabeth City‑Pasquotank 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 and shall use the remainder for tourism‑related expenditures. 
	
"Sec. 1.1. Elizabeth City Area Convention and Visitors Bureau. (a) Establishment as a Tourism Development Authority. – Upon adoption of a resolution levying a room occupancy tax under this act by either the Pasquotank County Board of Commissioners or the Elizabeth City City Council, the Pasquotank Board of Commissioners shall adopt a resolution converting the Elizabeth City Area Convention and Visitors Bureau into a tourism development authority, which shall be a public authority under the Local Government Budget and Fiscal Control Act. The county shall transfer to the Authority upon its creation all of the assets of the county's convention and visitors bureau. The resolution shall provide for the membership of the Authority, including the members' terms of office, and for the filling of vacancies on the Authority. At least one‑third of the members must be individuals who are affiliated with businesses that collect the tax in the county, and at least three‑fourths of the members must be individuals who are currently active in the promotion of travel and tourism in the county. 
The Authority shall meet at the call of the chair and shall adopt rules of procedure to govern its meetings. The Finance Officer for Pasquotank County shall be the nonvoting 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 governing body or bodies levying a tax under this act on its receipts and expenditures for the preceding quarter and for the year in such detail as the governing body or bodies may require.
"Sec. 2.  Elizabeth City occupancy tax. (a) Authorization; Scope; Administration. – If the Pasquotank County Board of Commissioners has not levied the tax authorized by Section 1 of this act or has levied the tax at a rate of less than three percent (3%), the Elizabeth City City Council may, by ordinance, levy a room occupancy tax at a rate that does not exceed three percent (3%) when combined with the Pasquotank County occupancy tax rate, if any. This tax shall apply to the same accommodations that are taxable under Section 1 of this act. A tax levied under this subsection 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.
(a1)	Additional Occupancy Tax. – In addition to the tax authorized by subsection (a) of this section, the Elizabeth City City Council may levy an additional room occupancy tax of up to three percent (3%) of the gross receipts derived from the rental of accommodations taxable under subsection (a) only if Elizabeth City also levies the tax authorized under subsection (a) of this section or if Pasquotank County levies the tax authorized under subsection (a) of Section 1 of this act. The total rate of tax levied under subsections (a) and (a1) of this section, when combined with the rate of any room occupancy tax that may be levied by Pasquotank County, may not exceed six percent (6%). The levy, collection, administration, and repeal of the tax authorized by this subsection shall be in accordance with the provisions of this section. 
(b)	Use and Distribution of 
 First Three Cents (3¢). – The finance officer of Elizabeth City shall, on a quarterly basis, remit the net proceeds of the occupancy tax levied under subsection (a) of this section to the Elizabeth City‑Pasquotank County Tourism Development Authority. The Authority shall use the net proceeds of the occupancy tax levied under subsection (a) of this section as follows:
(1)	Fifty percent (50%) to promote travel and tourism.
(2)	Twenty‑five percent (25%) for tourism‑related expenditures that are recommended by the Elizabeth City City Council and are approved by the Authority.
(3)	Twenty‑five percent (25%) for tourism‑related expenditures that are recommended by the Pasquotank County Board of Commissioners and are approved by the Authority. 
(b1)	Use and Distribution of the Proceeds from the Additional Occupancy Tax. – The finance officer of Elizabeth City shall, on a quarterly basis, remit the net proceeds of the occupancy tax levied under subsection (a1) of this section to the Elizabeth City‑Pasquotank 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 and shall use the remainder for tourism‑related expenditures. 
"Sec. 2.1.  Definitions. – The following definitions apply in this act.
(1)	Net proceeds. – Gross proceeds less the cost to the governing body of administering and collecting the tax, as determined by the finance officer, not to exceed three percent (3%) of the first five hundred thousand dollars ($500,000) of gross proceeds collected each year and one percent (1%) of the remaining gross receipts collected each year.
(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, in the judgment of the Tourism Development Authority, are designed to increase the use of lodging facilities, meeting facilities, or convention facilities in the county or to attract tourists or business travelers to the county. The term includes tourism‑related capital expenditures.
"Sec. 3.  Effect of county tax on previously levied city tax.  If the City of Elizabeth City levies an occupancy tax under Section 2 of this act, and the Pasquotank County Board of Commissioners subsequently adopts a resolution levying an occupancy tax in Pasquotank County under Section 1 of this act, the occupancy tax levied by the City of Elizabeth City shall be repealed as of the effective date of the county levy if the county levies an occupancy tax at the rate of six percent (6%), and shall be reduced by the amount that the combined county and city occupancy tax rates exceed six percent (6%) if the county rate is less than six percent (6%).
"Sec. 4.  This act is effective upon ratification."
SECTION 2.  G.S. 153A‑155 reads as rewritten:
"§ 153A‑155.  Uniform provisions for room occupancy taxes.
(a)	Scope. – This section applies only to counties the General Assembly has authorized to levy room occupancy taxes.
(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 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 taxing 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 a room occupancy tax may deduct from the amount remitted to the taxing county a discount equal to the discount the State allows the operator for State sales and use tax.
(d)	Administration. – The taxing county shall administer a room occupancy tax it levies. A room occupancy tax 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 taxing county. 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 county 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 county 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 county may be repealed or reduced by a resolution adopted by the governing body of the county. 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.
(f1)	Use. – The proceeds of a room occupancy tax shall not be used for development or construction of a hotel or another transient lodging facility.
(g)	This section applies only to Anson, Brunswick, Buncombe, Cabarrus, Carteret, Craven, Cumberland, Currituck, Dare, Davie, Durham, Granville, Madison, Montgomery, Nash, New Hanover, Pasquotank, Pender, Person, Randolph, Richmond, Rowan, Scotland, Stanly, Transylvania, Tyrrell, Vance, and Washington Counties, and to the Township of Averasboro in Harnett County." 
SECTION 3.  This act is effective when it becomes law.