GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
H	2
HOUSE BILL 917
Senate Finance Committee Substitute Adopted 10/3/01 

Short Title:	Durham Charter Cleanup/Raise Occupancy Tax.	()	
Sponsors:	     	
Referred to:	     	
March 29, 2001

A BILL TO BE ENTITLED
AN ACT TO REPEAL OBSOLETE OR REDUNDANT SECTIONS OF THE CHARTER OF THE CITY OF DURHAM, TO CONSOLIDATE DURHAM COUNTY'S OCCUPANCY TAX PROVISIONS, AND TO AUTHORIZE DURHAM COUNTY TO INCREASE ITS OCCUPANCY TAX FROM 5% TO 6%.  

The General Assembly of North Carolina enacts:
PART I.  DURHAM CHARTER CLEANUP
SECTION 1.  The Charter of the City of Durham, being Chapter 671 of the 1975 Session Laws, as amended, is further amended by repealing the following sections:
Section 2.5, entitled "Use of property lines as annexation boundaries", as added by Chapter 342 of the 1993 Session Laws;
Section 13.1, entitled "Council to judge elections", as added by Chapter 852 of the 1979 Session Laws;
Section 23, entitled "Authority of city manager";
Section 24, entitled "Special police";
Section 28, entitled "Political campaign activity prohibited";
Section 29, entitled "Director of public safety";
Section 33, entitled "Protection of the public water supply";
Section 41, entitled "Fiscal year and annual estimate";
Section 42, entitled "Revenue";
Section 46, entitled "Authority to impose";
Section 48, entitled "License transfer";
Section 50, entitled "Investigation of city affairs";
Section 53, entitled "Opening under the streets; obstructions";
Section 58, entitled "Regulation of the use of public property";
Section 59, entitled "Suppression of nuisances";
Section 61, entitled "Sunday observance";
Section 62, entitled "Regulation of Amusements";
Section 64, entitled "Regulation of bondsmen";
Section 65, entitled "Protection of businesses from fraud";
Section 66, entitled "Licensing of plumbers and electricians";
Section 83, entitled "Public buildings";
Section 84, entitled "Public contracts";
Section 98, entitled "Dedication or reservation of recreation areas";
Section 99, entitled "Building inspections";
Section 103, entitled "Regulation of parks and squares";
Section 104, entitled "Public concerts";
Section 106, entitled "Appropriations for recreational, scientific and cultural activities";
Section 107, entitled "Advertisement of the city";
Section 108, entitled "Encouraging location of industry";
Section 109, entitled "City ice plant";
Section 110, entitled "City rock quarry";
Section 113, entitled "Authority to waive governmental immunity"; and
Section 117, entitled "Penalty for failure to turn over city property".
SECTION 2.  Section 7 of the Charter of the City of Durham, being Chapter 671 of the 1975 Session Laws, reads as rewritten:
"Sec. 7. Oaths of Office. – The Mayor and each Council member, before entering upon the duties of the office to which they have been elected, shall take before some officer authorized to administer oaths an oath that they will fairly and impartially perform the duties of their office. "
SECTION 3.  Section 8 of the Charter of the City of Durham, being Chapter 671 of the 1975 Session Laws, as amended by Chapter 370 of the 1983 Session Laws and Chapter 169 of the 1985 Session Laws, reads as rewritten:
"Sec. 8. Powers of the City Council. – The City Council shall have full power and authority, except as otherwise provided for in this Charter, to exercise all of the powers conferred upon and delegated to the City of Durham by this Charter and by the laws of North Carolina. The City Council shall have power to make such ordinances, rules and regulations as it may deem necessary for the proper government of the City and to promote and safeguard the health, morals, safety and general welfare and convenience of the public. The City Council may provide for the proper enforcement of such ordinances, in such manner as it may think best, by fine, imprisonment or otherwise. The City Council may provide for the organization of the offices, departments and divisions of City government, not inconsistent with this Charter: By way of example and not limitation, the City Council, in performing the duties and responsibilities set forth in G.S. 160A‑412, may assign all or part of the duties of an inspection department to an existing or newly created department, division or office of the City, may assign all or some of the personnel appointed pursuant to G.S. 160A‑411 to an existing or newly created department, division or office of the City and may designate the job titles and duties of the personnel so assigned.
"
SECTION 4.  Section 30 of the Charter of the City of Durham, being Chapter 671 of the 1975 Session Laws, reads as rewritten:
"Sec. 30. Authority to Operate Waterworks.	
(3)	The City Council, and all persons acting under their authority, shall have the right to use the ground or soil, in, or upon, or under any road, railroad, highway, lane or alley for the purpose of enlarging or improving or maintaining the plant or system of waterworks owned by the City, upon the condition that they shall not permanently injure any such property, and that the same shall be restored to its original condition, or damages done thereto shall be repaired by the City Council.
SECTION 5.  In order to recodify a local modification to G.S. 160A‑314 applicable to the City of Durham as a part of the Charter, S.L. 1998‑50 is repealed and the Charter of the City of Durham, being Chapter 671 of the 1975 Session Laws, is amended by adding a new section to read:
"Sec. 38. Stationary container collection service.
(a)	Where housing units qualify under city ordinances for roll-out cart solid waste collection service, and the housing units instead choose to be served by stationary containers in accordance with city ordinances, a city may provide stationary container collection service without charging fees for such service other than the fees applicable to roll-out cart service.
(b)	Nothing in this section shall be construed to impair the authority of a city to charge customers who do not qualify for service under subsection (a) of this section the fees established by city ordinances for stationary container collection service."
part ii.  durham occupancy tax
SECTION 6.  Durham Occupancy Tax.  (a)  Authorization and Scope. – The Durham 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 when furnished in furtherance of their nonprofit purpose.
SECTION 6.(b)  Authorization of Additional Two Percent (2%) Tax. – In addition to the tax authorized by subsection (a) of this section, the Durham County Board of Commissioners may levy a room occupancy tax of two percent (2%) of the gross receipts derived from the rental of accommodations taxable under subsection (a) of this section.  The levy, collection, administration, and repeal of the tax authorized by this act shall be in accordance with the provisions of this section.  Durham County may not levy a tax under this subsection unless it also levies the tax authorized under subsection (a) of this section.
SECTION 6.(c)  Authorization of Additional One Percent (1%) Tax. – In addition to the tax authorized by subsections (a) and (b) of this section, the Durham County Board of Commissioners may levy a room occupancy tax of one percent (1%) of the gross receipts derived from the rental of accommodations taxable under subsections (a) and (b) of this section. The levy, collection, administration, and repeal of the tax authorized by this act shall be in accordance with the provisions of this section.  Durham County may not levy a tax under this subsection unless it also levies the tax authorized under subsections (a) and (b) of this section.
If a plan for financing a Performing Arts Theater has not been approved by the Durham City Council and has not been disapproved by the Durham County Commissioners within 42 months after the levy of the one‑cent (1¢) tax authorized under this subsection, the county's authority to levy the one‑cent (1¢) tax described in this subsection and the levy of the one‑cent (1¢) tax described in this subsection are repealed on the first day of the second month following the 42‑month period.
If construction on the Performing Arts Theater has not begun within 42 months after the levy of the one‑cent (1¢) tax authorized under this subsection, the county's authority to levy the one‑cent (1¢) tax described in this subsection and the levy of the one‑cent (1¢) tax described in this subsection are repealed on the first day of the second month following the 42‑month period.
Any funds collected but not spent before the repeal date shall be redistributed to the Durham Convention and Visitors Bureau to promote travel and tourism.
This section does not affect the rights or liabilities of the county, a taxpayer, or another person arising under a law amended or repealed by this section before the effective date of its amendment or repeal; nor does it affect the right to any refund or credit of a tax that accrued under the amended or repealed law before the effective date of its amendment or repeal.
SECTION 6.(d)  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.
SECTION 7.(a)  Distribution and Use of Tax Revenue. – Durham County shall distribute and use the net proceeds of the tax collected under this act as provided in this section.  As used in this section, "net proceeds" means gross proceeds less the cost to the county of administering and collecting the tax, as determined by the finance officer.
SECTION 7.(b)  Use of Proceeds From First Three Percent (3%) Tax. – Durham County shall retain fifty‑seven and one‑half percent (57½%) of the net proceeds collected from the tax levied under subsection (a) of Section 6 of this act and shall distribute the remaining forty‑two and one‑half percent (42½%) of the net proceeds collected from the tax levied under subsection (a) of Section 6 of this act to the City of Durham.  Funds retained by the county or distributed to the City of Durham pursuant to this subsection may be used for any purpose authorized by law.
SECTION 7.(c)  Use of Proceeds From Additional Two Percent (2%) Tax. – Durham County shall, on a monthly basis, remit the net proceeds of the tax levied under Section 6(b) of this act to the Durham Convention and Visitors Bureau, a joint agency established by an interlocal cooperation agreement between Durham County and the City of Durham.  The Bureau may use funds remitted to it under this subsection only to promote travel and tourism in Durham County.  If the interlocal cooperation agreement expires or the Bureau is otherwise dissolved, Durham County shall use the net proceeds of the tax levied under Section 6(b) of this act only to promote travel and tourism in Durham County.
SECTION 7.(d)  Use of Proceeds From Additional One Percent (1%) Tax During First 24 Months. – The net proceeds of the tax collected under Section 6(c) of this act during the first 24 months that the tax is levied shall be distributed and used as follows:
(1)	The county shall use up to the first two hundred thousand dollars ($200,000) collected to fund the development of a Cultural Arts Master Plan.
(2)	The county shall remit the next seven hundred thousand dollars ($700,000) collected to the Durham Convention and Visitors Bureau. The Bureau shall use the funds remitted to it under this subdivision to promote travel and tourism.
(3)	The county shall remit the next two hundred forty-eight thousand dollars ($248,000) collected to the City of Durham. The city shall use these funds for the design and engineering costs associated with the construction of a Performing Arts Theater.
(4)	The county shall use the next four hundred thousand dollars ($400,000) collected for improvements to the Museum of Life and Science. This may include the financing of debt service.
(5)	The county shall credit the next five hundred thousand dollars ($500,000) collected into an Arts Reserve Fund and shall use the funds to implement the Cultural Arts Master Plan developed under subdivision (1) of this subsection.
(6)	The county shall remit any revenue collected in excess of two million forty-eight thousand dollars ($2,048,000) to the Durham Convention and Visitors Bureau to be used to promote travel and tourism.
SECTION 7.(e)  Use of Proceeds From Additional One Percent (1%) Tax After First 24 Months. – The net proceeds of the tax collected under Section 6(c) of this act after the first 24 months that the tax is levied shall be distributed quarterly and used as follows:
(1)	The first one million four hundred thousand dollars ($1,400,000) collected annually shall be used to finance the debt service associated with the construction of the Performing Arts Theater. Thirty‑two years after the levy of the tax authorized under Section 6(c) of this act, these proceeds shall be distributed to the Durham Convention and Visitors Bureau to promote travel and tourism.
(2)	The next five hundred thousand dollars ($500,000) collected annually may be used for improvements to the Museum of Life and Science. This may include the financing of debt service. Any of these funds that are not needed for this purpose shall be  distributed to the Durham Convention and Visitors Bureau and used to promote travel and tourism.
(3)	The county shall remit any revenue in excess of one million nine hundred thousand dollars ($1,900,000) collected annually to the Durham Convention and Visitors Bureau which shall be used to promote travel and tourism.
As used in this subsection, "annually" means the 12‑month period beginning after the first 24 months that the tax authorized under Section 6(c) is levied.
SECTION 8.  Section 3 of Chapter 969 of the 1985 Session Laws reads as rewritten:
"Sec. 3.  This act applies only to the following counties:  Graham, Clay, Jackson, Macon, Polk, and Transylvania."
SECTION 9.  Chapter 665 of the 1991 Session Laws is repealed.    
SECTION 10.  The purpose of Part II of this act is to consolidate the acts relating to Durham County's authority to levy an occupancy tax and to authorize Durham County to levy an additional one percent (1%) occupancy tax.  It is intended that those provisions of prior acts that are expressly consolidated into this act continue without interruption so that all rights and liabilities that have accrued are preserved and may be enforced.
part iii.  effective date
SECTION 11.  Part II of this act becomes effective December 1, 2001.  The remainder of this act is effective when it becomes law.