AN ACT to authorize the creation of the Swannanoa Valley Tourism Development Authority.

The General Assembly of North Carolina enacts:

SECTION 1.  Part VI of Chapter 908 of the 1983 Session Laws, as amended by Section 1 of Chapter 942 of the 1985 Session Laws, S.L. 2021‑162, Section 60(a) of S.L. 2013‑414, Section 8 of S.L. 2015‑128, and Section 3.1 of S.L. 2022‑40, reads as rewritten:

PART VI. BUNCOMBE OCCUPANCY TAX.

Sec. 17. Authorization and Scope. – (a) The Board of Commissioners of Buncombe County may levy a room occupancy and tourism development tax of up to two percent (2%) of the gross receipts derived from the rental of accommodations within the county that are subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3).

Sec. 18. Repealed.

Sec. 19. 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 – A tax levied under this act shall be levied, administered, collected, and repealed as provided in G.S. 153A‑155.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. 20. Repealed.

Sec. 21. Disposition of Taxes Collected. – (a) Buncombe County shall shall, on a quarterly basis, remit the net proceeds of the occupancy tax collected from the areas collectively consisting of, and legally denoted as, the Buncombe County Townships of (i) Broad River (28), (ii) Black Mountain (25), and (iii) Swannanoa (21), and hereinafter collectively referred to as the district, to the Swannanoa Valley Tourism Development Authority to be used for purposes consistent with Section 24 of this act. Buncombe County shall remit the remainder of the net proceeds of the occupancy tax collected to the county Buncombe County Tourism Development Authority in Buncombe County. to be used for purposes consistent with this section. Net proceeds means gross proceeds less the cost to the county of administering and collecting the tax, not to exceed five percent (5%) of the gross proceeds collected each year.

(b)        The Buncombe County Tourism Development Authority may expend any funds remitted to it pursuant to subsection (a) of this section only as follows:

(1)        Two‑thirds of the funds shall be used only (i) to further the development of travel, tourism, meetings and events in the county through marketing, advertising, sales, and promotion and (ii) for the administrative expenses of the Authority, not to exceed twenty percent (20%) of the net proceeds for the applicable fiscal year of the Authority. For purposes of this provision, administrative expenses shall include expenses of the Authority for salaries, benefits, operations, and facilities.

(2)        The remainder shall be split evenly between the following funds created by the Authority, with no portion of the remainder being used for operational expenses:

a.         The Tourism Product Development Fund. The Authority shall use monies in the Fund to provide financial assistance for major tourism projects in order to increase patronage of lodging facilities in, and further economic development in, Buncombe County.

b.         The Legacy Investment From Tourism Fund. The Authority shall use monies in the Fund to provide financial assistance for tourism‑related projects that are designed to (i) increase patronage of lodging facilities, meeting facilities, and convention facilities by attracting tourists, business travelers, or both and (ii) benefit the community at large in Buncombe County.

(c)        The Buncombe County Tourism Development Authority shall administer and spend the funds in the Tourism Product Development Fund as follows:

(1)        The Authority shall create a Product Development Committee to review and evaluate proposals from applicants for tourism capital projects, including capital maintenance. No proceeds may be used for operational expenses. The Product Development Committee shall make recommendations to the Authority regarding use and disposition of funds derived from the Tourism Product Development Fund. A for‑profit entity is not eligible to receive funds or loans from the Tourism Product Development Fund. Only upon recommendation of the Product Development Committee, and upon a vote of three‑fourths of the current voting members of the Authority to expend such funds, the Authority may award funds to qualified projects in the form of outright grants of money and may guarantee loans and participate in pledges of debt service for these projects; provided, however, that no loan guarantee may exceed the amount committed from the Fund for the project. Projects must be located in Buncombe County unless the Commissioners of Buncombe County give specific approval to projects outside the county. Applicants must provide a feasibility study satisfactory to the Product Development Committee demonstrating the project's economic value to the area and the number of estimated new room nights the project will generate.

(2)        To be a qualified project, a project must be expected to increase patronage of lodging facilities in Buncombe County.

(3)        The Authority is not required to exhaust all of the funds generated each year and may accumulate money in order to create a revolving fund to further the purposes of this section. The Authority may not commit, for purposes of debt service, a portion of the net funds in excess of thirty‑three percent (33%) of the average net funds received over a rolling three‑year average for a period of time in excess of 15 years for any one project. The Authority shall not be the sole funding source for any debt service.

(4)        The Product Development Committee need not be comprised solely of members of the Authority. A majority of the members of the Product Development Committee must be persons who are owners or operators of hotels, motels, or bed and breakfasts.

(d)       The Buncombe County Tourism Development Authority shall administer and spend the funds in the Legacy Investment From Tourism Fund as follows:

(1)        The Authority shall create a Legacy Investment From Tourism Committee to review and evaluate proposals from applicants for tourism‑related capital projects, including capital maintenance, and project administration, design, restoration, maintenance, and rehabilitation as well as enhancement of natural resources and expansion of necessary infrastructure. The Legacy Investment From Tourism Committee shall make recommendations to the Authority regarding use and disposition of funds derived from the Legacy Investment From Tourism Fund. A for‑profit entity is not eligible to receive funds or loans from the Legacy Investment From Tourism Fund. The Legacy Investment From Tourism Fund cannot be used for operational expenses. Only upon recommendation of the Legacy Investment From Tourism Committee, and upon a vote of three‑fourths of the current voting members of the Authority to expend such funds, the Authority may award funds to qualified projects in the form of outright grants of money and may guarantee loans and participate in pledges of debt service for these projects; provided, however, that no loan guarantee may exceed the amount committed from the Fund for the project. Projects must be located in Buncombe County unless the Commissioners of Buncombe County give specific approval to projects outside the county. Applicants must provide information as to how the project balances visitor and resident needs as part of the application process for a Legacy Investment From Tourism Fund project.

(2)        To be a qualified project, a project must be expected to (i) increase patronage of lodging facilities, meeting facilities, and convention facilities by attracting tourists, business travelers, or both and (ii) benefit the community at large in Buncombe County.

(3)        The Authority is not required to exhaust all of the funds generated each year and may accumulate money in order to create a revolving fund to further the purposes of this section. The Authority may not commit for purposes of debt service a portion of the net funds in excess of thirty‑three percent (33%) of the average net funds received over a rolling three‑year average for a period of time in excess of 15 years for any one project. The Authority shall not be the sole funding source for any debt service.

(4)        The Legacy Investment From Tourism Committee need not be comprised solely of members of the Authority. A majority of the members of the Legacy Investment From Tourism Committee must be persons who are owners or operators of hotels, motels, or bed and breakfasts.

Sec. 22. Appointment, Duties of the Buncombe County Tourism Development Authority. – (a) When the board of county commissioners adopts a resolution levying a room occupancy tax pursuant to this Part, it shall also adopt a resolution creating a county Tourism Development Authority, which shall be a public authority under the Local Government Budget and Fiscal Control Act and shall be composed of the following 11 members:

(1)        A county commissioner appointed by the Buncombe County Board of Commissioners, who shall serve as an ex officio, nonvoting member;

(2)        A member of the Asheville City Council appointed by the Asheville City Council, who shall serve as an ex officio, nonvoting member;

(3)        Six owners or operators of hotels, motels, bed and breakfasts, or vacation rental management companies, four of which own or operate hotels, motels, or bed and breakfasts, with more than 100 rental units, two of whom shall be appointed by the Asheville City Council and two by the Buncombe County Board of Commissioners; and one of which owns or operates hotels, motels, bed and breakfasts, or vacation rental management companies, with 100 or fewer rental units, who shall be appointed by the Asheville City Council; and one of which owns or operates hotels, motels, or bed and breakfasts with 100 or fewer rental units, who shall be appointed by the Buncombe County Board of Commissioners.

(4)        Three individuals actively involved in the tourist business who have participated in tourism promotion, appointed as follows: one vacation rental owner or vacation rental management company owner appointed by the Buncombe County Board of Commissioners; one executive from a ticketed tourist attraction appointed by the Asheville Area Chamber of Commerce; and one restaurant owner, owner of a brewery, distillery, or winery open for tours or tastings, or executive director of a ticketed arts organization appointed by the Asheville City Council.

All members of the Authority shall serve without compensation. Vacancies in the Authority shall be filled by the appointing authority of the member creating the vacancy. Members appointed to fill vacancies shall serve for the remainder of the unexpired term for which they are appointed to fill. Members shall serve three‑year terms and may serve no more than two consecutive terms. The members shall elect a chair, who shall serve for a term of two years. The Authority shall meet at the call of the chair and shall adopt rules of procedure to govern its meetings. The finance officer for Buncombe County shall be the ex officio finance officer of the Authority.

(b)        The Buncombe County Tourism Development Authority may contract with any person, firm, or agency to advise and assist it in the promotion of travel, tourism, and conventions and may recommend to the board of county commissioners that county staff be employed for this advice and assistance. Any county staff employed under this Part shall be hired and supervised by the Tourism Development Authority, which shall pay the salaries and expenses of this staff.

(c)        The Buncombe County Tourism Development Authority shall report quarterly and at the close of the fiscal year to the board of county commissioners on its receipts and expenditures for the preceding quarter and for the year in such detail as the board may require.

(d)       The following definitions apply in this section:

(1)        Vacation rental management company. – A corporate entity having at least five rental units that are available for rent in Buncombe County for more than sixty percent (60%) of the days in the calendar year.

(2)        Vacation rental management company owner. – The owner of a corporate entity having at least five rental units that are available for rent in Buncombe County for more than sixty percent (60%) of the days in the calendar year.

(3)        Vacation rental owner. – The owner of at least one vacation rental unit in Buncombe County, registered in compliance with all local and State laws, that is available for rent for more than sixty percent (60%) of the days in the calendar year.

Sec. 23. Repealed.

Sec. 23.1. First Additional Tax. – In addition to the tax authorized by Section 17 of this Part, the Buncombe County Board of Commissioners may levy an additional 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 17 through 22 and Section 24 of this Part. Buncombe County may not levy a tax under this section unless it also levies a tax under Section 17 of this Part.

Sec. 23.2. Second Additional Tax. – In addition to the tax authorized by Sections 17 and 23.1 of this Part, the Buncombe County Board of Commissioners may levy an additional room occupancy and tourism development tax of one percent (1%) of the gross receipts derived from the rental of accommodations taxable under those sections. 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 17 through 22 and Section 24 of this Part. Buncombe County may not levy a tax under this section unless it also levies the taxes under Sections 17 and 23.1 of this Part.

Sec. 23.3. Third Additional Occupancy Tax. – In addition to the tax authorized by Sections 17, 23.1, and 23.2 of this Part, the Buncombe County Board of Commissioners may levy an additional room occupancy and tourism development tax of two percent (2%) of the gross receipts derived from the rental of accommodations taxable under those sections. 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 17 through 22 and Section 24 of this Part. Buncombe County may not levy a tax under this section unless it also levies the taxes under Sections 17, 23.1, and 23.2 of this Part.

Sec. 24. Swannanoa Valley Tourism Development Authority. – (a) Use of Tax Revenue. – The Swannanoa Valley Tourism Development Authority shall use at least two‑thirds of the funds distributed to it under Section 21 of this act to promote travel and tourism in the district and shall use the remainder for tourism‑related expenditures in the district.

The following definitions apply in this subsection:

(1)        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.

(2)        Tourism‑related expenditures. – Expenditures that, in the judgment of the Tourism Development Authority, are designed to increase the use of accommodations, meeting facilities, or convention facilities in the district, to attract tourists or business travelers to the district, or to promote outdoor adventure tourism within the district. The term includes tourism‑related capital expenditures that allow for restoration and development of tourism‑related infrastructure.

(b)        Appointment and Membership. – The Swannanoa Valley Tourism Development Authority shall be a public authority under the Local Government Budget and Fiscal Control Act. The Buncombe County Board of Commissioners shall, by resolution, provide for the membership of the Authority, including the members' terms of office, and for the filling of vacancies on the Authority. The Authority shall consist of a minimum of nine members. At least one‑third of the members shall be individuals who are affiliated with businesses that collect tax in the district, and at least one‑half of the members shall be individuals who are currently active in the promotion of travel and tourism in the district. The Authority shall elect one member to serve as chair of the Authority, and all members shall serve without compensation.

The Authority shall meet at the call of the chair and shall adopt rules of procedure to govern its meetings. The Finance Officer for Buncombe County shall be the ex officio finance officer of the Authority. The Authority and the Buncombe County Board of Commissioners may each appoint additional ex officio, nonvoting members who are representative of the district or county, respectively, as necessary to promote the travel and tourism‑related purposes of this act.

(c)        Duties. – The Swannanoa Valley Tourism Development Authority shall expend the net proceeds of the tax distributed to it under this act for promoting travel and tourism and for tourism‑related expenditures as provided in this section.

(d)       Reports. – The Swannanoa Valley Tourism Development Authority shall report quarterly and at the close of the fiscal year to the Buncombe County Board of Commissioners on its receipts and expenditures for the preceding quarter and for the year in such detail as the Board may require.

SECTION 2.  Section 1 of this act (i) becomes effective only if the Buncombe County Board of Commissioners adopts a resolution creating the Swannanoa Valley Tourism Development Authority and (ii) applies to the distribution and use of occupancy tax proceeds on the fiscal quarter following the first full fiscal quarter after the adoption of such resolution. The remainder of this act is effective when it becomes law.