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