Agenda - 08-23-2011 - 8d - Laserfiche WebLink

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39 ATTAC)E~VIENT ~ -1 MEMQItANDUM Memorandum to~_ Steve Stewart From: Mike Brough Subject: Hotel Occupancy Tax Date: March 1, 2011 Attached is a resolution adding a new Chapter 8A to the Town Code to -levy ahotel- and motel room occupancy tax. It is in format a resolution rather than an ordinance because G.S. 160A- 215, which establishes procedures for -the adoption, administration, and enforcement of such a tax, specifies. for. some-reason that this must be done by_-resolution. I.believe-the format is irrelevant i.e. the-resolution has the-same force as an ordinance. While the above cited general statute establishes procedural -requirements for those municipalities that have -the power to levy such a tax, .the- substantive authority for such a tax is found in local -legislation. Many municipalities have such local acts, and apparently all such local acts are essentially identical. In fact, I spoke with Bob Hornik today, and he told me that he_ was- advised by a member of the Legislative Drafting staff in Raleigh tt'~at it was a waste of time for Hillsborough to ask for anything_different than had-been approved for other municipalities. I mention this because some of the provisions of our local act are far from ideal and not what I would have drafted had there been a choice. In particular, not only are there limitations on the way this tax money can be spent, but the expenditures will actually be made by the Cazrboro Tourism Development Authority, not the Board of Aldermen. In other words, the CTDA is not an advisory boazd but- an independent authority. However, the BOA appoints the members of the CTDA -and can remove-them at the Board's discretion. In addition, this draft establishes one year, non-staggered terms for the entire membership of the CTDA. Hopefully, this will assure that the CTDA is not operating at cross purposes with the Board's policies. There is one other peculiarity, and that is the local act's requirement that one-third of the members of the CTDA .must be "individuals who are affiliated with businesses that collect the tax," and three-fourths of the members must be "individuals who are currently active in the promotion- of travel and tourism in the town." I think the latter requirement can be interpreted fairly loosely to include business owners who depend on walk-in traffic, and so it should not be difficult to meet this requirement. But it seems to me the former requirement will require an appointment of someone associated with our one hotel. For that reason, as well as the reason expressed above, this draft provides for only three members on the CTDA. The Board may decide that a larger membership is preferable, and I would be happy to revise the draft accordingly. Please feel free to let me know if you have any questions or comments.