AN ACT to Create Hertford County District H and to authorize the levy of an occupancy tax in the District.

The General Assembly of North Carolina enacts:

SECTION 1.  Section 1 of Chapter 979 of the 1987 Session Laws, as amended by Section 21(z) of S.L. 2007‑527 and only as it applies to Hertford County, is rewritten and recodified as Sections 2 and 3 of this act. This act does not affect the rights or liabilities of the county, a taxpayer, or another person arising under the law rewritten and recodified by this act before the effective date of this act, nor does it affect the right to any refund or credit of a tax that accrued under the law rewritten and recodified by this act before the effective date of this act.

SECTION 2.  Occupancy Tax. – (a) Authorization and Scope. – The Hertford 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.

SECTION 2.(b)  Administration. – A tax levied under this act shall be levied, administered, collected, and repealed as provided in G.S. 153A‑155.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 section.

SECTION 2.(c)  Definitions. – The following definitions apply in this act:

(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 proceeds 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 Hertford County Tourism Development Authority, are designed to increase the use of lodging facilities, meeting facilities, or convention facilities in the county or to attract tourists or business travelers to the county. The term includes tourism‑related capital expenditures.

SECTION 2.(d)  Distribution and Use of Tax Revenue. – Hertford County shall, on a quarterly basis, remit the net proceeds of the occupancy tax levied under this section to the Hertford County 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 Hertford County and shall use the remainder for tourism‑related expenditures.

SECTION 3.  Tourism Development Authority. – (a) Appointment and Membership. – The Hertford County Board of Commissioners shall adopt a resolution creating the Hertford County Tourism Development Authority to conform with the requirements of this section. The Authority shall be a public authority under the Local Government Budget and Fiscal Control Act. The resolution adopted by the Board of Commissioners 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 shall be individuals who are affiliated with businesses that collect the tax in the county, and at least one‑half of the members shall be individuals who are currently active in the promotion of travel and tourism in the county. 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 Hertford County shall be the ex officio finance officer of the Authority.

SECTION 3.(b)  Duties. – The Authority shall expend the net proceeds of the tax levied under Section 2 of 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.

SECTION 3.(c)  Reports. – The Authority shall report quarterly and at the close of the fiscal year to the Hertford County Board of Commissioners on its receipts and expenditures for the preceding quarter and for the year in such detail as the Board of Commissioners may require.

SECTION 3.(d)  The Hertford County Board of Commissioners shall adopt the resolution required by this section within 60 days of the effective date of this act.

SECTION 4.(a)  Hertford County District H Created. – Hertford County District H is created as a taxing district. Its jurisdiction consists of that part of Hertford County that is located outside of incorporated areas of the Town of Ahoskie and the Town of Murfreesboro. Hertford County District H is a body politic and corporate and has the power to carry out the provisions of this section. The Hertford County Board of Commissioners shall serve ex officio as the governing body of the district, and the officers of the county shall serve as the officers of the governing body of the district. A simple majority of the governing body constitutes a quorum, and approval by a majority of those present is sufficient to determine any matter before the governing body if a quorum is present.

SECTION 4.(b)  Authorization and Scope. – The governing body of Hertford County District H 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 district 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 or room occupancy tax.

SECTION 4.(c)  Administration. – A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 153A‑155 as if Hertford County District H were a county. The penalties provided in G.S. 153A‑155 apply to a tax levied under this section.

SECTION 4.(d)  Definitions. – The following definitions apply in this act:

(1)        Net proceeds. – Gross proceeds less the cost to the district 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 proceeds 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 Hertford County Tourism Development Authority, are designed to increase the use of lodging facilities, meeting facilities, or convention facilities in the district or to attract tourists or business travelers to the district. The term includes tourism‑related capital expenditures.

SECTION 4.(e)  Distribution and Use of Tax Revenue. – Hertford County District H shall, on a quarterly basis, remit the net proceeds of the occupancy tax levied under this section to the Hertford County Tourism Development Authority. The Authority shall deposit one hundred percent (100%) of the net proceeds of the room occupancy and tourism development tax levied under this section into a special fund, the cash balance of which shall be deposited at interest or invested in accordance with G.S. 159‑30. The Authority shall use at least two‑thirds of the funds remitted to it under this subsection to promote travel and tourism in Hertford County District H and shall use the remainder for tourism‑related expenditures in the district. In accordance with the North Carolina Constitution and the United States Constitution, the tax proceeds may be used only for the direct benefit of the jurisdiction of Hertford County District H. None of the proceeds may be used for promotion or expenditures in areas within Hertford County that are outside of the district.

SECTION 4.(f)  G.S. 153A‑155(g) reads as rewritten:

(g)      Applicability. – Subsection (c) of this section applies to all counties and county districts that levy an occupancy tax. To the extent subsection (c) conflicts with any provision of a local act, subsection (c) supersedes that provision. The remainder of this section applies only to Alleghany, Anson, Brunswick, Buncombe, Burke, Cabarrus, Camden, Carteret, Caswell, Chatham, Cherokee, Chowan, Clay, Craven, Cumberland, Currituck, Dare, Davie, Duplin, Durham, Edgecombe, Forsyth, Franklin, Graham, Granville, Halifax, Haywood, Henderson, Hertford, Jackson, Madison, Martin, McDowell, Montgomery, Moore, Nash, New Hanover, Northampton, Pasquotank, Pender, Perquimans, Person, Randolph, Richmond, Rockingham, Rowan, Rutherford, Sampson, Scotland, Stanly, Swain, Transylvania, Tyrrell, Vance, Washington, Wayne, and Wilson Counties, to Harnett County District H, Hertford County District H, New Hanover County District U, Surry County District S, Watauga County District U, Wilkes County District K, Yadkin County District Y, and the Township of Averasboro in Harnett County and the Ocracoke Township Taxing District.

SECTION 5.  This act is effective when it becomes law.