A BILL TO BE ENTITLED
AN ACT to clarify the permitted uses of certain Dare county local taxes.
Whereas, the General Assembly authorized the creation of the Dare County Tourism Board as a public authority; and
Whereas, the General Assembly authorized Dare County to levy an additional 1% occupancy tax and a 1% prepared food and beverage tax to fund the operation of the Tourism Board; and
Whereas, that authorization provided that 75% of the tax proceeds "shall be used for the cost of administration and to promote tourism" and 25% "shall be restricted and used for services or programs needed due to the impact of tourism on the county"; and
Whereas, historical records available within the Tourism Board and historical statements from various town boards and officials and from the general public have all indicated confusion and disagreement over the expenditures of the board with respect to the 25% restricted fund; and
Whereas, such expenditures from the 25% restricted fund have been erroneously made for buying real estate, building walking paths, and funding grant programs designed to promote and augment the growth of tourism, and such purposes were provided for by the remaining 75% fund; and
Whereas, the 25% restricted fund has failed to be reserved for services needed due to the impacts of tourism on the county, such as added costs of traffic control, police, lifeguard, and sanitation services due to the impact of a growing tourist economy; and
Whereas, in 2016, the Office of the State Auditor conducted a review of the relevant financial records and concluded that the Tourism Board should seek clarification as to the intent regarding permissible uses of the 25% restricted fund; Now, therefore,
The General Assembly of North Carolina enacts:
SECTION 1.  Section 7 of Chapter 449 of the 1985 Session Laws, as enacted by Chapter 177 of the 1991 Session Laws, reads as rewritten:
"Sec. 7. Use of Proceeds of Additional Occupancy Tax and Prepared Food and Beverage Tax. Dare County shall remit the net proceeds of the taxes levied under Sections 3 and 4 of this act on a monthly basis to the Dare County Tourism Board. The tourism board may deduct the cost of its annual audit from the proceeds remitted to it. The tourism board shall use the remainder of the proceeds as follows:
(1)	Seventy‑five percent (75%) shall be used for the cost of administration and to promote tourism. The tourism board's expenditures may include (i) advertising to promote less‑than‑peak‑season events and programs, (ii) marketing research, (iii) a mail and telephone inquiry response program, and (iv) welcoming and hospitality functions.
(2)	Twenty‑five percent (25%) shall be used for services or programs needed to respond to burdens associated with the impact of tourism in peak season on the county. Permissible services or programs include increasing traffic control, police, lifeguard, and sanitation crew personnel necessitated by greater numbers of people during peak season but do not include expenditures for costs of events or improvements designed to increase tourism in the county or used by tourists visiting the area.
The tourism board may expend funds only for public purposes. The tourism 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. The tourism board may not use the proceeds distributed to it to purchase real property or for the purposes set out in subdivision (2) above without prior approval by the Dare County Board of Commissioners."
SECTION 2.  This act is effective when it becomes law and applies to expenditures of funds made on or after that date.