AN ACT to modify the cherokee county occupancy tax.

The General Assembly of North Carolina enacts:

SECTION 1.  Chapter 1055 of the 1983 Session Laws, as amended by Section 21(e) of S.L. 2007‑527 and Section 1 of S.L. 2008‑33, reads as rewritten:

Section 1. Occupancy Tax. –

(a)        Authorization and Scope. – The Cherokee County Board of Commissioners may levy a room occupancy and tourism development tax of three percent (3%) of the gross receipts derived from the rental of any room, lodging, or similar accommodation furnished by any hotel, motel, inn, tourist camp, or other similar place within the county that is subject to sales tax imposed by the State under G.S. 105‑164.4(a)(3). The occupancy 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.

(b)        Authorization of Additional Tax. – In addition to the tax authorized by subsection (a) of this section, the Cherokee County Board of Commissioners 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) of this section. The levy, collection, administration, and repeal of the tax authorized by this subsection shall be in accordance with the provisions of this act. Cherokee County may not levy a tax under this subsection unless it also levies the tax authorized under subsection (a) of this section.

Sec. 3. Administration of Tax. – A tax levied under this act shall be levied, collected, administered, and repealed as provided in G.S. 153A‑155.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. 5. Distribution and Use of Tax Revenue. – Cherokee County shall, on a quarterly basis, remit the net proceeds of the room occupancy tax to the Cherokee County Tourism Development Authority. The Authority shall use at least two‑thirds of the funds remitted to it under this act to promote travel and tourism in Cherokee County and shall use the remainder for tourism‑related expenditures.

The following definitions apply in this section:

(1)        Net proceeds. – Gross proceeds less the cost to the county 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 county or to attract tourists or business travelers to the county. The term includes tourism‑related capital expenditures.

Sec. 6. Cherokee County Tourism Development Authority. –

(a)        Appointment and Membership. – When the Cherokee County Board of Commissioners adopts a resolution levying a room occupancy tax under this act, 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. The resolution shall provide for the membership of the Authority, including the members' terms of office, in accordance with this section, 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 county, and at least one‑half of the members must be individuals who are currently active in the promotion of travel and tourism in the county. Members of the Authority shall serve for terms of three years, and no member shall serve more than two consecutive full terms unless a minimum of 12 months has elapsed since the expiration of the member's second full term. The board of commissioners 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 Cherokee County shall be the ex officio finance officer of the Authority. The Authority shall be composed of seven members as follows:

(1)        One member of the Cherokee County Board of Commissioners, appointed by the Cherokee County Board of Commissioners.

(2)        One member, nominated by the Town Council of the Town of Murphy, who is actively engaged in the promotion of travel and tourism or the collection of occupancy tax. The Cherokee County Board of Commissioners shall appoint the Town Council's nominee under this subdivision.

(3)        One member, nominated by the Board of Aldermen of the Town of Andrews, who is actively engaged in the promotion of travel and tourism or collects occupancy tax. The Cherokee County Board of Commissioners shall appoint the Board of Aldermen's nominee under this subdivision.

(4)        Three members affiliated with a lodging business that collects the Cherokee County occupancy tax. The Cherokee County Board of Commissioners shall appoint the three members under this subdivision.

(5)        One member actively engaged in the promotion of travel and tourism within Cherokee County. The Cherokee County Board of Commissioners shall appoint the member under this subdivision.

(b)        Duties. – The Authority shall expend the net proceeds of the tax levied under this act for the purposes provided in this act. The Authority shall promote travel, tourism, and conventions in the county, sponsor tourist‑related events and activities in the county, and finance tourist‑related capital projects in the county.

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

Sec. 8. This act is effective upon ratification.

SECTION 2.  This act becomes effective October 1, 2026, and applies to occupancy tax proceeds collected by the county and remitted to the Cherokee County Tourism Development Authority on or after that date. The modifications to appointments and term limits of members of the Cherokee County Tourism Development Authority under Section 1 of this act become incrementally effective upon the expiration of the terms of current members of the Authority and applicable to newly seated members of the Authority thereafter.