GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
S	2
SENATE BILL 92
 Finance Committee Substitute Adopted 4/16/01

Short Title:	Various Local Occupancy Taxes.	()	
Sponsors:	     	
Referred to:	     	
February 7, 2001

A BILL TO BE ENTITLED
AN ACT TO AUTHORIZE VARIOUS MUNICIPALITIES AND COUNTIES TO LEVY ROOM OCCUPANCY TAXES.

The General Assembly of North Carolina enacts:
PART I. CITY OF GASTONIA.
SECTION 1.1.  Occupancy tax. – (a) Authorization and Scope. – The Gastonia City Council may levy a room occupancy tax of up to 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 city 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 1.1.(b)  Administration. – A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 160A-215.  The penalties provided in G.S. 160A-215 apply to a tax levied under this section.
SECTION 1.1.(c)  Distribution and Use of Tax Revenue. – Gastonia shall, on a quarterly basis, remit the net proceeds of the occupancy tax to the Gastonia Tourism Development Authority.  The Authority shall use at least two-thirds of the funds remitted to it under this subsection to promote travel and tourism in Gastonia 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 city 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 Tourism Development Authority, are designed to increase the use of lodging facilities, meeting facilities, or convention facilities in a city or to attract tourists or business travelers to the city. The term includes tourism-related capital expenditures.
SECTION 1.2.  Gastonia Tourism Development Authority.  (a) Appointment and Membership. – When the Gastonia City Council adopts a resolution levying a room occupancy tax under this act, it shall also adopt a resolution creating a city 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 city and at least three-fourths of the members must be individuals who are currently active in the promotion of travel and tourism in the city.  The city council 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 Gastonia shall be the ex officio finance officer of the Authority.
SECTION 1.2.(b)  Duties. – The Authority shall expend the net proceeds of the tax levied under this act for the purposes provided in Section 1 of this act.  The Authority shall promote travel, tourism, and conventions in the city, sponsor tourist-
related events and activities in the city, and finance tourist-related capital projects in the city.
SECTION 1.2.(c)  Reports. – The Authority shall report quarterly and at the close of the fiscal year to the Gastonia City Council on its receipts and expenditures for the preceding quarter and for the year in such detail as the city council may require.
PART II. CITY OF KINGS MOUNTAIN.
SECTION 2.1.  Occupancy tax.  (a) Authorization and Scope. – The Kings Mountain City Council may levy a room occupancy tax of up to 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 city 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 2.1.(b)  Administration. – A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 160A-215.  The penalties provided in G.S. 160A-215 apply to a tax levied under this section.
SECTION 2.1.(c)  Distribution and Use of Tax Revenue. – Kings Mountain shall, on a quarterly basis, remit the net proceeds of the occupancy tax to the Kings Mountain Tourism Development Authority.  The Authority shall use at least two-thirds of the funds remitted to it under this subsection to promote travel and tourism in Kings Mountain 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 city 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 Tourism Development Authority, are designed to increase the use of lodging facilities, meeting facilities, or convention facilities in a city or to attract tourists or business travelers to the city. The term includes tourism-related capital expenditures.
SECTION 2.2.  Kings Mountain Tourism Development Authority.  (a) Appointment and Membership. – When the Kings Mountain City Council adopts a resolution levying a room occupancy tax under this act, it shall also adopt a resolution creating a city 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 city, and at least three-fourths of the members must be individuals who are currently active in the promotion of travel and tourism in the city.  The city council 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 Kings Mountain shall be the ex officio finance officer of the Authority.
SECTION 2.2.(b)  Duties. – The Authority shall expend the net proceeds of the tax levied under this act for the purposes provided in Section 1 of this act.  The Authority shall promote travel, tourism, and conventions in the city, sponsor tourist-related events and activities in the city, and finance tourist-related capital projects in the city.
SECTION 2.2.(c)  Reports. – The Authority shall report quarterly and at the close of the fiscal year to the Kings Mountain City Council on its receipts and expenditures for the preceding quarter and for the year in such detail as the city council may require.
PART III. CITY OF LINCOLNTON.
SECTION 3.1.  Occupancy tax.  (a) Authorization and Scope. – The Lincolnton City Council may levy a room occupancy tax of up to 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 city 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 3.1.(b)  Administration. – A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 160A-215.  The penalties provided in G.S. 160A-215 apply to a tax levied under this section.
SECTION 3.1.(c)  Distribution and Use of Tax Revenue. – Lincolnton shall, on a quarterly basis, remit the net proceeds of the occupancy tax to the Lincolnton Tourism Development Authority.  The Authority shall use at least two-thirds of the funds remitted to it under this subsection to promote travel and tourism in Lincolnton 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 city 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 Tourism Development Authority, are designed to increase the use of lodging facilities, meeting facilities, or convention facilities in a city or to attract tourists or business travelers to the city. The term includes tourism-related capital expenditures.
SECTION 3.2.  Lincolnton Tourism Development Authority.  (a) Appointment and Membership. – When the Lincolnton City Council adopts a resolution levying a room occupancy tax under this act, it shall also adopt a resolution creating a city 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 city, and at least three-fourths of the members must be individuals who are currently active in the promotion of travel and tourism in the city.  The city council 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 Lincolnton shall be the ex officio finance officer of the Authority.
SECTION 3.2.(b)  Duties. – The Authority shall expend the net proceeds of the tax levied under this act for the purposes provided in Section 1 of this act.  The Authority shall promote travel, tourism, and conventions in the city, sponsor tourist-related events and activities in the city, and finance tourist-related capital projects in the city.
SECTION 3.2.(c)  Reports. – The Authority shall report quarterly and at the close of the fiscal year to the Lincolnton City Council on its receipts and expenditures for the preceding quarter and for the year in such detail as the city council may require.
PART IV. MONROE.
SECTION 4.1.  Monroe occupancy tax.  (a) Authorization and Scope. – The Monroe City Council may levy a room occupancy tax of up to five percent (5%) 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 city 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 4.1.(b)  Administration. – A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 160A-215.  The penalties provided in G.S. 160A-215 apply to a tax levied under this section.
The tax collector may collect any unpaid taxes levied under this act through the use of attachment and garnishment proceedings as provided in G.S. 105-368 for collection of property taxes. The tax collector has the same enforcement powers concerning the tax authorized by this act as the Secretary of Revenue in enforcing the State sales tax under G.S. 105-164.30.
SECTION 4.1.(c)  Distribution and  Use of Tax Revenue. – The tax collector shall account for the proceeds of a tax levied under this act to the city finance director on a monthly basis.  The city shall use at least five percent (5%) of the net proceeds of the tax to promote tourism and economic development.  The city shall use the remaining net proceeds of the tax for construction, operation, and maintenance of a civic center for Downtown Monroe Development, and for economic development.
PART V. NORTH TOPSAIL BEACH.
SECTION 5.1.  Occupancy tax (a) Authorization and Scope. – The North Topsail Beach City Council may levy a room occupancy tax of up to 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 city 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 5.1.(b)  Administration. – A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 160A-215.  The penalties provided in G.S. 160A-215 apply to a tax levied under this section.
SECTION 5.1.(c)  Distribution and Use of Tax Revenue. – North Topsail Beach shall spend the net proceeds of the occupancy tax levied for beach renourishment and protection. For purposes of this section, "net proceeds" is the gross proceeds less the cost to the city 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.
PART VI. SURF CITY.
SECTION 6.1.  Part IX of Chapter 908 of the 1983 Session Laws, as amended by Chapter 985 of the 1983 Session Laws, as it relates to Surf City only is recodified and rewritten as Section 6.2 of this act.
SECTION 6.2.  Surf City occupancy tax. (a) Authorization and Scope. – The Surf City Town Council may levy a room occupancy tax of up to 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 town that is subject to sales tax imposed by the State under G.S. 105-164.4(a)(3) and from the rental of private residences and cottages, whether or not the residence or cottage is rented for less than 15 days.  This tax is in addition to any State or local sales tax.
SECTION 6.2.(b)  Authorization of Additional Tax. – In addition to the tax authorized by subsection (a) of this section, the Surf City Town Council may levy an additional room occupancy tax of up to three percent (3%) of the gross receipts derived from the rental of accommodations taxable under subsection (a).  The levy, collection, administration, and repeal of the tax authorized by this subsection shall be in accordance with the provisions of this section.  The governing body of a town may not levy a tax under this subsection unless it also levies the tax authorized under subsection (a) of this section.
SECTION  6.2.(c)  Administration. – A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 160A-215.  The penalties provided in G.S. 160A-215 apply to a tax levied under this section.
The tax collector may collect any unpaid taxes levied under this act through the use of attachment and garnishment proceedings as provided in G.S. 105-368 for collection of property taxes. The tax collector has the same enforcement powers concerning the tax imposed by this act as does the Secretary of Revenue in enforcing the State sales tax under G.S. 105-164.30.
SECTION 6.2.(d)  Distribution and Use of Tax Revenue. – The Town of Surf City may use the proceeds of the tax levied pursuant to subsection (a) of this section only for tourism-related expenditures.  As used in this section, "tourism-related expenditures" includes any of the following expenditures:  criminal justice system, fire protection, public facilities and utilities, health facilities, solid waste and sewage treatment, and the control and repair of waterfront erosion.  The term does not include, however, expenditures for services normally provided by the town on behalf of its citizens unless these services promote tourism and enlarge its economic benefits by enhancing the ability of the town to attract and provide for tourists.
The Town of Surf City may use the proceeds of the tax levied pursuant to subsection (b) of this section only for beach renourishment and protection.
PART VII. TOPSAIL BEACH.
SECTION 7.1.  Part IX of Chapter 908 of the 1983 Session Laws, as amended by Chapter 985 of the 1983 Session Laws, as it relates to Topsail Beach only is recodified and rewritten as Section 7.2 of this act.
SECTION 7.2.  Topsail Beach occupancy tax. (a) Authorization and 
Scope. – The Topsail Beach Town Council may levy a room occupancy tax of up to 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 town that is subject to sales tax imposed by the State under G.S. 105-164.4(a)(3) and from the rental of private residences and cottages, whether or not the residence or cottage is rented for less than 15 days.  This tax is in addition to any State or local sales tax.
SECTION 7.2.(b)  Authorization of Additional Tax. – In addition to the tax authorized by subsection (a) of this section, the Topsail Beach Town Council may levy an additional room occupancy tax of up to three percent (3%) of the gross receipts derived from the rental of accommodations taxable under subsection (a). The levy, collection, administration, and repeal of the tax authorized by this subsection shall be in accordance with the provisions of this section.  The governing body of a town may not levy a tax under this subsection unless it also levies the tax authorized under subsection (a) of this section.
SECTION 7.2.(c)  Administration. – A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 160A-215.  The penalties provided in G.S. 160A-215 apply to a tax levied under this section.
The tax collector may collect any unpaid taxes levied under this act through the use of attachment and garnishment proceedings as provided in G.S. 105-368 for collection of property taxes. The tax collector has the same enforcement powers concerning the tax imposed by this act as does the Secretary of Revenue in enforcing the State sales tax under G.S. 105-164.30.
SECTION 7.2.(d)  Distribution and Use of Tax Revenue. – The Town of Topsail Beach may use the proceeds of the tax levied pursuant to subsection (a) of this section only for tourism-related expenditures.  As used in this section, "tourism-related expenditures" includes any of the following expenditures:  criminal justice system, fire protection, public facilities and utilities, health facilities, solid waste and sewage treatment, and the control and repair of waterfront erosion.  The term does not include, however, expenditures for services normally provided by the town on behalf of its citizens unless these services promote tourism and enlarge its economic benefits by enhancing the ability of the town to attract and provide for tourists.
The Town of Topsail Beach may use the proceeds of the tax levied pursuant to subsection (b) of this section only for beach renourishment and protection.
PART VIII.  DARE COUNTY.
SECTION 8.  Chapter 449 of the 1985 Session Laws, as amended by Chapter 826 of the 1985 Session Laws and Chapters 177 and 906 of the 1991 Session Laws, is further amended by adding a new section to read:
"Section 3.1. Supplemental Occupancy Tax.  In addition to the taxes authorized by Sections 1 and 3 of this act, the Dare 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 Section 1 of this act. The county may not levy a tax under this section unless it also levies the taxes under Section 1 and Section 3 of this act. A tax levied under this section may not become effective before the first day of the second month after the resolution levying the tax is adopted. The levy, collection, administration, and repeal of the tax authorized by this section shall be in accordance with Section 1 of this act. The county shall use the net proceeds of the tax authorized by this section only for shoreline protection activities the board of commissioners considers necessary to protect the public health, safety, and economic well‑being of the county."
PART IX. CITY UNIFORM PROVISIONS.
SECTION 9.  City administrative provisions. – G.S. 160A-215 reads as rewritten:
"§ 160A‑215.  Uniform provisions for room occupancy taxes.
(a)	Scope. – This section applies only to municipalities the General Assembly has authorized to levy room occupancy taxes. For the purpose of this section, the term "city" means a municipality.
(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 city. 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 city shall design, print, and furnish to all appropriate businesses and persons in the city 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 city a discount equal to the discount the State allows the operator for State sales and use tax.
(d)	Administration. – The taxing city shall administer a room occupancy tax it levies. A room occupancy tax is due and payable to the city finance officer in monthly installments on or before the fifteenth 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 fifteenth day of each month, prepare and render a return on a form prescribed by the taxing city. 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 city 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 city 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 city may be repealed or reduced by a resolution adopted by the governing body of the city. 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 the Cities of Gastonia, Goldsboro, Greensboro, Kings Mountain, Lincolnton, Lumberton, Monroe, Mount Airy, Shelby, and Statesville, to the Towns of Banner Elk, Mooresville, North Topsail Beach, St. Pauls, Surf City, and Topsail Beach, and to the municipalities in Brunswick County."
PART X. EFFECTIVE DATE.
SECTION 10.  This act is effective when it becomes law.