A BILL TO BE ENTITLED
AN ACT to amend the clay county room occupancy and tourism development tax.
The General Assembly of North Carolina enacts:
SECTION 1.  Chapter 969 of the 1985 Session Laws, as amended by Chapter 195 of the 1987 Session Laws, reads as rewritten:
"Section 1. Occupancy Tax. (a) Authorization and Scope. – The board of commissioners of a county may levy a room occupancy tax of three percent (3%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation furnished by a hotel, motel, inn, or similar place within the county that is subject to sales tax imposed by the State underG.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 when furnished in furtherance of their nonprofit purpose.

(c)  Administration. – A tax levied under this act shall be levied, administered, collected, and repealed as provided in G.S. 153A‑155.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 act.
(e)  Distribution and Use of Tax Revenue. – Except as provided in Section 2 of this act for Durham County, the distributing authority shall distribute and use the net proceeds of the occupancy tax levied under this section in accordance with this subsection. The distributing authority shall be the taxing county, unless a Tourism Development Authority is required to be established under Section 1.1 of this act. If a Tourism Development Authority is established, then the Tourism Development Authority shall be the distributing authority. The distributing authority shall use at least two‑thirds of the funds remitted to it under this subsection to promote travel and tourism in the 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 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 distributing authority, are designed to increase the use of lodging facilities, meeting facilities, or convention facilities in a county or to attract tourists or business travelers to the county. The term includes tourism‑related capital expenditures.
 
Sec. 1.1. County Tourism Development Authority. – (a) Appointment and Membership. – When the annual net proceeds of the occupancy tax levied under Section 1 of this act exceed one hundred fifty thousand dollars ($150,000), the county board of 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 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 one‑half of the members must be individuals who are currently active in the promotion of travel and tourism in the county. The board of commissioners shall designate one member of the Authority as chair and shall determine the compensation, if any, to be paid to members of the Authority.
The Authority shall meet at the call of the chair and shall adopt rules of procedure to govern its meetings. The finance officer for the county shall be the ex officio finance officer of the Authority.
(b)	Duties. – If the board of commissioners establishes a Tourism Development Authority as provided in subsection (a) of this section, then 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. – If the board of commissioners establishes a Tourism Development Authority as provided in subsection (a) of this section, then the Authority shall report quarterly and at the close of the fiscal year to the 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. Use and Distribution of Tax Revenue in Durham County. Durham County shall retain fifty‑seven and one‑half percent (57‑1/2%) of the revenue collected from a tax levied under this act and shall distribute the remaining forty‑two and one‑half percent (42‑1/2%) of the revenue to the City of Durham. Funds retained by the county or distributed to the City of Durham may be used for any purpose authorized by law, except that at least twenty‑five percent (25%) of the funds so retained or distributed must be used for promotion of travel and tourism. 
Sec. 3. This act applies only to the following counties:  Graham, Clay, Jackson, Durham, Macon, Polk, and Transylvania. 
Sec. 4. This act is effective upon ratification." 
SECTION 2.  Section 3 of Chapter 118 of the 1987 Session Laws reads as rewritten:
"Sec. 3. This act applies only to the following counties: Graham, Jackson, and Macon."
SECTION 3.  This act applies only to Clay County.
SECTION 4.  G.S. 153A‑155(g) reads as rewritten:
"(g)	This section applies only to Alleghany, Anson, Brunswick, Buncombe, Cabarrus, Camden, Carteret, Clay, Craven, Cumberland, Currituck, Dare, Davie, Duplin, Durham, Franklin, Granville, Halifax, Madison, Montgomery, Nash, New Hanover, Pasquotank, Pender, Person, Randolph, Richmond, Rockingham, Rowan, Scotland, Stanly, Transylvania, Tyrrell, Vance, and Washington Counties, to Watauga County District U, and to the Township of Averasboro in Harnett County."
SECTION 5.  This act is effective when it becomes law.