GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
H	1
HOUSE BILL 926

 
 
Short Title:	Modify New Hanover Room Tax Use.	()	
Sponsors:	Representative McComas.	
Referred to:	Local Government II.	
March 29, 2001

A BILL TO BE ENTITLED
AN ACT TO MODIFY THE PURPOSES FOR WHICH THE NEW HANOVER COUNTY ROOM OCCUPANCY TAX MAY BE USED AND TO MAKE CONFORMING CHANGES.

The General Assembly of North Carolina enacts:
SECTION 1. The General Assembly finds that the beaches of New Hanover County are an important part of North Carolina's common natural heritage. Public access to these beaches should be available to all citizens, especially residents of that county, for the use and enjoyment of these public resources. The primary purpose of the New Hanover County room occupancy tax is to fund the local share of renourishment and maintenance of those beaches under contracts with the United States Army Corps of Engineers. The remaining proceeds of the tax are for the purpose of promoting travel and tourism. It is the intent of the General Assembly that the State shall continue to fund its share of renourishment and maintenance of the New Hanover County beaches at the rate provided in the 1999‑2000 fiscal year.
SECTION 2.  Part VIII of Chapter 908 of the 1983 Session Laws, as amended by Chapter 987 of the 1983 Session Laws, Chapters 726 and 971 of the 1985 Session Laws, and Chapter 540 of the 1995 Session Laws, reads as rewritten:
       "Part VIII.  New Hanover Occupancy Tax. 
"Sec. 31.  Levy of Tax.  (a)  The New Hanover County Board of Commissioners may "levy a room occupancy tax of two percent (2%) of the gross receipts derived from the rental of any accommodations within the county that are subject to  sales tax imposed by the State under G.S. 105‑164.4(a)(3). This tax is in addition to any local sales tax.  This tax does not apply to accommodations furnished by nonprofit charitable, educational, benevolent, or religious organizations. 
"Sec. 33.  Administration of Tax.  A tax levied under this act shall be levied, administered, collected, and repealed as provided in G.S. 153A‑155.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.
"
"Sec. 35.  Disposition of Taxes Collected. (a)	New Hanover County shall distribute the net proceeds of the occupancy tax as provided in this section. 
(1)	Sixty percent (60%) of the net proceeds shall be deposited in a special fund, the cash balance of which shall be deposited at interest or invested in accordance with G.S.  159‑30. The county shall use these funds only for the following purposes:
a.	Beach nourishment projects only in those areas of Kure Beach, Wrightsville Beach, and Carolina Beach that undergo regular nourishment pursuant to an agreement with the United States Army Corps of Engineers.
b.	Loans to local government entities for beach nourishment in any other areas approved both by resolution of the New Hanover Board of Commissioners and by resolutions of all the beach towns in New Hanover County. A loan made under this subdivision must bear interest at a rate no less than the rate set under G.S. 105‑241.1(i) as of the date the loan is made and must be for a term not to exceed five years.
(2)	The applicable percentage provided in the table below of the net proceeds shall be distributed on a quarterly basis to the county and its municipalities in accordance with the method by which the one percent (1%) local sales and use taxes levied in the county pursuant to Article 39 of Chapter 105 of the General Statutes are distributed. These funds shall be used only to promote travel and tourism.
Date Proceeds Received	Percentage
Before July 1, 2002		40%
Fiscal Year 2002-2003		39%
Fiscal Year 2003-2004		38%
Fiscal Year 2004-2005		37%
Fiscal Year 2005-2006		36%
On or after July 1, 2006		35%
(3)	The applicable percentage provided in the table below of the net proceeds shall be allocated among the beach towns on a pro rata basis. The beach towns may use these funds only for tourism‑related expenditures such as public beach access expenditures. 
Date Proceeds Received	Percentage
Fiscal Year 2002-2003		1%
Fiscal Year 2003-2004		2%
Fiscal Year 2004-2005		3%
Fiscal Year 2005-2006		4%
On or after July 1, 2006		5%

Unless a change in the use of occupancy tax revenue is authorized pursuant to subsection (b), the  net proceeds of the occupancy tax shall be used for the purposes provided in this subsection. No revenue distributed under subdivision (2), however, may be used to plan, construct, operate, maintain, or in any way promote a civic center, convention center, public auditorium, or like facility.
(b)	The purposes for which revenue from the room occupancy tax may be used by the county and its municipalities may be changed only by resolution of the New Hanover Board of County Commissioners after being approved by a majority of the votes cast in an election held in New Hanover County on the question of how revenue from the room occupancy tax should be used. The ballot presented to the qualified voters of the county in an election concerning the use of revenue from the room occupancy tax shall state all the proposed uses of this revenue and the percentage of the revenue to be used for each purpose. Any change in use of revenue from the room occupancy tax made by the county commissioners after voter approval may likewise be changed only by resolution of the county commissioners after being approved by the voters in another election.
The question of how revenue from the room occupancy tax should be spent may be submitted to the qualified voters of the county only at the time of a statewide general election. All elections under this section shall be conducted in accordance with the laws then governing elections in this State.
(c)	The following definitions apply in this section:
(1)	Beach towns. – Carolina Beach, Kure Beach, and Wrightsville Beach.
(2)	Net proceeds. – Gross proceeds less the cost to the county of administering and collecting the tax.
(3)	Public beach access expenditures. – Any expenditures to make beaches accessible to the public, including capital and operating expenditures for handicapped access structures, walk‑overs to the beach, visitor facilities, restroom and shower facilities, public safety, and parking, including off‑site parking with public transportation from the off‑site parking location to the beach.
"
"Sec. 36.1. Additional Tax. In addition to the tax authorized by  Section 31 of this Part, the New Hanover County Board of Commissioners may levy a room occupancy and tourism development tax of one percent (1%) of the gross receipts derived from the rental of accommodations taxable under that section. The levy, collection, administration, and repeal of the tax authorized by this section, and the use of tax revenue from a tax levied under this section, shall be in accordance with Sections 31 through 35 of this Part. New Hanover County may not levy a tax under this section unless it also levies a tax under  Section 31 of this Part."
SECTION 3.  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.
(g)	This section applies only to Avery, Brunswick, Craven, Currituck, Davie, Granville, Madison, New Hanover, Nash, Person, Randolph, Scotland, and Transylvania Counties."
SECTION 4.  This act becomes effective January 1, 2002, and applies to taxes collected on or after that date.