A BILL TO BE ENTITLED
AN ACT TO CREATE A TRAVEL AND TOURISM CAPITAL INCENTIVE GRANT PROGRAM.
The General Assembly of North Carolina enacts:
SECTION 1.  Part 2 of Article 10 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B-434.4. Travel and Tourism Capital Incentive Grant Program.
(a)	Program Established. – There is established the Travel and Tourism Capital Incentive Grant Program. Under the program, the Travel and Tourism Grant Committee established in subsection (d) of this section may award grants to the owners of qualified projects for the purpose of inducing the creation of new or the expansion or renovation of existing travel and tourism projects. Grant proceeds may not be distributed to any private individual or entity. The Committee shall develop guidelines to be used in determining whether the conditions in this section are satisfied and whether the project described in the application is consistent with the grant program.
(b)	Owner Defined. – For the purpose of the Travel and Tourism Capital Incentive Grant Program, the owner of a qualified project is the unit of local government that will own the qualified project in whole or in at least fifty percent (50%) partnership with a private individual or entity.
(c)	Unit of Local Government Defined. – For the purpose of the Travel and Tourism Capital Incentive Grant Program, a unit of local government means a county or municipality in the State.
(d)	Committee. – The Travel and Tourism Grant Committee shall consist of the Secretary of Commerce, the Secretary of Revenue, the Director of the Office of State Budget and Management, and three elected local government officials. One elected local government official shall represent the Mountains and shall be appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives. One elected local government official shall represent the Piedmont and shall be appointed by the Governor. One elected local government official shall represent the Coastal Plain and shall be appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate. The elected local government officials may not be associated with or employed by the travel and tourism industry or an entertainment enterprise, or be in any contractual relationship regarding the qualified project. The General Assembly and Governor appointees shall serve two-year terms. The Committee may act only upon a unanimous decision of its members.
It is unlawful for a member of the Committee to, within two years after the end of service on the Committee, provide services for compensation, as an employee, consultant, or otherwise, to any project that was awarded a grant under this section while the former member was serving on the Committee, or to provide services for compensation to any person or entity that contracts with the project. Violation of this subsection is a Class 1 misdemeanor.
Meetings of the Committee are subject to the open meetings requirements of Article 33C of Chapter 143 of the General Statutes. All documents of the Committee, including applications for grants, are public records governed by Chapter 132 of the General Statutes, including applicable provisions of that Chapter protecting confidential information.
(e)	Application and Fee. – The owner of a qualified project may apply for a grant no later than one year after the qualified project is opened to the public. When filing an application under this section, the applicant must pay the Committee a fee of five thousand dollars ($5,000). The fee is due at the time the application is filed. The Committee shall determine the allocation of the fee imposed by this subsection among the agencies whose heads make up the Committee. The proceeds of the fee are receipts of the agency to which they are credited.
The application must contain all information required by the Committee, including a certification of the nature and cost of the tourism project, the estimated revenues to be generated by the project, the estimated economic benefit to the community, and the purposes for which the applicant will use the grant funds. If the tourism project is the result of a public‑private partnership, the grant application must set forth in detail the respective rights and obligations of the parties and the specific terms of the agreement. The application must be signed by the finance officer and the chair of the governing body of the owner.
(f)	Qualification. – A qualified project is a newly created travel and tourism project or expansion or renovation of a travel and tourism project that the Committee determines, pursuant to a feasibility study under this section, meets all of the following conditions:
(1)	At least half of the project will be financed and owned by a unit of local government in which it is located.
(2)	The project will target at least thirty‑five percent (35%) of its visitors from among persons who reside outside the State or more than 50 miles from the project.
(3)	The project has a business plan that demonstrates a positive economic impact on the community in which the project is located.
(4)	The applicant has provided impact projections regarding estimated State and local tax revenues with respect to the project.
(5)	The project will have a significant and positive economic impact on the community in which the project is located, considering among other factors, the extent to which the tourism project will compete directly with existing tourism attractions in the area and the amount by which tax revenues from the tourism project will exceed the amount of the grant provided.
(6)	The applicant has provided a cost-benefit analysis of the project.
(7)	The applicant has provided an economic impact analysis, certified by a certified public accountant, which demonstrates the employment, gross State product, and personal income effects of the project over a 10-year period.
(8)	The project will be available to the public for a minimum of 100 days per year.
(9)	The project will generate at least 10 new jobs in the community in which the project is located.
(10)	The project will have the following minimum cost based on the enterprise tier in which it is located:
Enterprise Tier		Minimum Cost
1 and 2			$  1,000,000
3 and 4			$  5,000,000
5				$10,000,000
(11)	The governing body of the unit of local government has passed a resolution stating the need for and positive economic impact and enhancement of travel and tourism revenues from the project.
(12)	The applicant has demonstrated by clear and convincing evidence all of the following:
a.	The project will not result in unnecessary duplication of existing services.
b.	The project will generate new visitors to the area rather than drawing visitors away from other existing tourism attractions.
(13)	The applicant has certified that the project will not be created, expanded, or renovated unless the applicant is awarded a grant.
(g)	Feasibility Study. – The applicant must fund a feasibility study, certified by a certified public accountant, and coordinated solely by the Committee. The Committee shall develop a list of qualified firms to conduct the study. The Committee shall prescribe the scope of the study to cover all of the qualifications established in this section.
(h)	Amount. – Subject to the maximums provided in this section, the amount of a grant with respect to a qualified project is calculated as a percentage of the total amount of the following taxes collected and retained by the State each year:
(1)	The net State sales tax collected on sales by or within the qualified project, as determined by the Department of Revenue.
(2)	The net privilege tax paid by the qualified project under G.S. 105‑37.1, as determined by the Department of Revenue.
(i)	Maximums. – The maximum term of a grant is 10 years. No project may receive any grant proceeds for a year that is more than 10 years beyond the date of the initial grant award.
The Committee shall set the grant percentage at the time it awards the grant. The percentage used to calculate a grant may not exceed the applicable percentage provided in the table below based on the enterprise tier, as defined in G.S. 105‑129.3, in which the qualified project is located. In addition, the cumulative maximum amount of a grant may not exceed the applicable percentage of the total project cost provided in the table below based on the enterprise tier in which the qualified project is located.
Enterprise Tier		Percentage
1 and 2	35
3 and 4	30
5		25
(j)	Use. – The proceeds of a grant may be used only for capital costs, including debt service, with respect to the qualified project for which the grant was awarded. 
(k)	Disbursement. – In order to receive grant disbursements under this section, the owner of the qualified project must provide the Department of Revenue with periodic, verified accountings of the tax collections provided in subsection (h) of this section. These reports must be made at the times and in the form prescribed by the Department of Revenue. Each report must include the name, address, and tax identification number of every taxpayer whose collections are included in the report and any other information required by the Department of Revenue.
The Department of Revenue must disburse grants awarded under this section in accordance with G.S. 105‑269.16. Upon awarding a grant under this section, the Committee must provide the following information to the Department of Revenue:
(1)	The name, address, and other identifying information of the owner to whom the grant was awarded.
(2)	The name and address of any lessee or individual or entity who has entered into a contract with the owner of the qualified project.
(3)	The address and other identifying information of each facility that is part of the qualified project for which the grant was awarded.
(4)	The applicable percentage and the maximum cumulative amount of the grant as determined in accordance with this section.
(5)	Any other information included in the application, if required by the Department of Revenue.
(l)	Reports. – The Committee must report annually to the Revenue Laws Study Committee concerning the applications made for grants and the grants awarded under this section.
(m)	Cap. – The maximum number of projects that may be awarded grants each fiscal year is 10. No more than twenty million dollars ($20,000,000) in grants shall be awarded each fiscal year. For the purpose of this maximum, the amount awarded is calculated as the cumulative maximum amount of the grant divided by the number of years in its term."
SECTION 2.  Article 9 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑269.16. Travel and tourism grants.
The Department must annually disburse the travel and tourism grants awarded under G.S. 143B‑434.4. Each annual disbursement must be made by October 1 for the preceding fiscal year. The amount of each grant must be calculated in accordance with G.S. 143B‑434.4 based on information provided to the Department by the owner of the qualified project. If information necessary to calculate a portion of a grant is not available, the Department must disburse only that portion for which information is available. To pay for this program, the Department must draw from State sales and use tax collections under Article 5 of this Chapter an amount equal to the grant funds disbursed and the Department's costs of administering the grants. The Department must provide the Committee an annual accounting of grant funds disbursed under this section."
SECTION 3.  G.S. 150B‑1(d) is amended by adding a new subdivision to read:
"(d)	Exemptions from Rule Making. – Article 2A of this Chapter does not apply to the following:
…
(10)	The Travel and Tourism Grant Committee in developing guidelines for the Travel and Tourism Capital Incentive Grant Program under G.S. 143B-434.4 of the General Statutes."
SECTION 4.  This act becomes effective January 1, 2003, and expires for grant applications filed on or after July 1, 2005.