An ordinance authorizing the collection of four tourist accommodation taxes by the Metropolitan Government to be distributed by formula for the direct promotion of tourism, tourist related activities (which may include funding for a convention center), the general fund of the Metropolitan Government and a reserve fund to be used exclusively for the purpose of modifying, constructing, financing and operating a convention center; providing requirements for the performance of work on the convention center; and requiring the Metropolitan Government to actively solicit bids from minority-owned businesses for construction of a new convention center.

Whereas the Tennessee State Legislature has enacted and the Governor has signed Senate Bill 1116 which enables the Metropolitan Government to levy four additional tourist accommodation taxes; and

Whereas Nashville’s visitor industry contributes to the community’s economic well being and contributes to the cost of general government and public education; and

Whereas the visitor industry in Nashville employs one in five working adults, generates $1.6 billion in wages, collects $3.5 billion in visitor spending each year, and collects $279 million in state and local taxes annually; and

Whereas Nashville is losing convention business worth millions of dollars annually and can compete for only 20 to 30 percent of the national market today; and

Whereas numerous market and financial studies have endorsed the feasibility of constructing a modern convention facility which would allow Nashville to compete for at least 70 percent of the national market, attract 1,000,000 additional visitors annually and create 36,000 new jobs; and

Whereas visitors will pay for the construction and operation of the convention center and contribute additional sales tax revenue; and

Whereas it is in the public interest to market Nashville’s Music City brand, grow a vital segment of the economic base, increase the flow of visitor contributions to our tax base, minimize the increase of local property taxes by recruiting additional sales tax dollars into the Nashville economy;

Now, therefore, be it enacted by the Council of the Metropolitan Government of Nashville and Davidson County:

Section 1. Section 5.12.020 of the Metropolitan Code is hereby amended by deleting the word “five” where it appears in the first sentence, and replacing it with the word “six,” and is hereby further amended by adding the following language at the end of that Section:

“The proceeds from such tax shall be retained by the Metropolitan Government and distributed in accordance with T.C.A. § 7-4-110(b). The tax so imposed is a privilege tax upon the transient occupying the room of a hotel located within the territory of the Metropolitan Government;” and

Section 2. Metropolitan Code Section 5.12.060 relative to the distribution of proceeds is hereby deleted and replaced with the following:

A. “Except for the taxes levied pursuant to T.C.A. § 7-4-102(c), the proceeds from the tax levied in this Chapter shall be retained by the Metropolitan Government and distributed as follows:

(1) One-third of the proceeds in its entirety shall be used for the direct promotion of tourism;

(2) One-third of the proceeds in its entirety shall be maintained in a reserve fund to be used exclusively for the purpose of modifying, constructing, financing and operating a convention center;

(3) One-sixth of the proceeds shall be used for tourist-related activities which may include funding a convention center; and

(4) One-sixth of the proceeds shall be deposited in the General Fund of the Metropolitan Government.

B. If the total tax collections received pursuant to this Section and dedicated to the purposes contained in Subsections B (1), B (2) and B (3) exceed the amounts necessary to fund the obligations thereunder, the excess shall be placed in a reserve fund and expended only for tourist-related activities.

C. The proceeds from the tax authorized by T.C.A. § 7-4-102(c) shall be retained by the metropolitan government and be used exclusively for tourist-related activities within the area of the metropolitan government.

D. Proceeds of this tax may not be used to provide a subsidy in any form to any hotel or motel.
Section 3: Title 5 of the Metropolitan Code, Chapter 12, is hereby amended as follows:
1. By designating Sections 5.12.010 through 5.12.100 as Article I.
2. By adding the following new sections as Article II “Additional Hotel Occupancy Tax for Convention Center:

5.12.110 Definitions.

As used in this Article, unless the context otherwise requires:

(1) “Person” means any individual, firm, partnership, joint venture, association, social club, fraternal organization, joint stock company, corporation, estate, trust, business trust, business organization, receiver, trustee, syndicate, or any other group or combination acting as a unit;
(2) “Tax collection officials” means the Department of Finance of the county or municipality, as applicable, or the county clerk, as so designated by ordinance of the legislative body of the Metropolitan Government.

5.12.120 Additional hotel occupancy privilege tax for convention center authorized.

In addition to any other tax or fee imposed pursuant to this Chapter on the occupancy of the hotel room, there is hereby authorized an additional two dollars ($2.00) privilege tax upon the occupancy of each hotel room within the territory of the Metropolitan Government. The tax so imposed is a privilege tax upon each occupied room for each night of occupancy and needs to be collected and distributed as provided in this Article.

5.12.130 Distribution of additional convention center hotel occupancy tax funds.
All revenues received by the Metropolitan Government from the privilege tax imposed pursuant to this Article shall be deposited into a Metropolitan Government fund entitled “The Convention Center Fund” and shall be used for the purpose of paying costs incurred in modification or construction of a publicly-owned convention center in excess of Four Hundred Million Dollars ($400,000,000.00) and costs located within the territory of the Metropolitan Government. Such revenues may also be used for the operation, promotion, management and marketing of such a convention center. If the revenues from such surcharge or tax in any fiscal year exceed the total of such debt service requirements from that year, such surplus revenue thus accruing shall be retained by the Metropolitan Government as a reserve fund for future convention center debt service requirements.
5.12.140 Termination of additional convention center hotel occupancy privilege tax.
The additional convention center hotel occupancy tax authorized by this Article shall terminate once the total bonded indebtedness incurred for the modification or construction of such convention center facility by the Metropolitan Government has been paid in full as to bond principal and interest, including the expenses of bond sale or sales, and the Metropolitan Council repeals the provisions of this Article. Provided, however, that any funds and interests remaining in the reserve fund after all obligations imposed under the provision of this part have been fulfilled, shall be used by the governmental board or agency responsible for the operation of the convention center for use by it in the operation, promotion and advertisement of the convention center facilities.
Section 4. Title 5 of the Metropolitan Code is hereby amended by amending Chapter 5.16 by adding the following new Article IV “Privilege Tax for Contract Vehicles Leaving the Airport”:
5.16.130 Privilege tax for contract vehicles leaving the airport authorized.

A. There is hereby authorized a privilege tax on the privilege of contracted vehicles exiting public airports located within the boundaries of the Metropolitan Government.

(1) Such tax shall be imposed only upon contracted vehicles which charge customers a separate fee for transportation from the airport unless otherwise excluded in this part.

(2) The tax shall be in the amount of Two Dollars ($2.00) each time a contracted vehicle meeting the requirements of subdivision (2) exits the airport while transporting customers from the airport located within the territory of the Metropolitan Government, but shall exclude non-commercial vehicles and equipment operated by the Metropolitan Transit Authority.

(3) The tax so imposed is a privilege tax upon the contracted vehicle exiting the airport and is to be collected and distributed as provided in this Article.

(4) The privilege tax is due each time a contracted vehicle to which this section applies leaves the airport. The operator of the contracted vehicle shall be responsible for keeping accurate records to determine the amount of tax due and payable. Such information shall be transmitted daily by the operator of the contracted vehicle to a designated individual within the business organization which hired the operator of the contracted vehicle. The privilege tax shall be remitted to the Metropolitan tax collection official by a designated individual within such business organization not later than the 20th of each month.

B.1. Taxes due and payable that are not remitted to the tax collection official on or before the due dates are delinquent.

2. The person owing such taxes shall be liable for interest on such delinquent taxes from the due date at the rate of 8% per annum, and in addition for a penalty of 1% for each month or fraction of a month that such taxes are delinquent. Such interest and penalty shall become a part of the tax required in this Chapter to be remitted.

3. As provided in T.C.A. § 7-4-205, willful refusal of a person to collect or remit the tax or willful refusal of an operator of a contracted vehicle to keep accurate records of the tax due and payable is a Class C misdemeanor.

4. Any fine levied in this Chapter shall be applicable to each individual transaction involving a contractor of a contracted vehicle for willful refusal to keep accurate records or the willful refusal of a person to collect or remit the tax due and owing.

5.16.140 Distribution of privilege tax for contract vehicles leaving the airport.

All revenues received by the Metropolitan Government from this privilege tax shall be deposited into the Metropolitan Government fund entitled “The Convention Center Fund” and shall be used for the purpose of paying costs incurred in the modification or construction of a publicly owned convention center in excess of Four Hundred Million Dollars ($400,000,000.00) and costs located within the territory of the Metropolitan Government. If the revenues from such surcharge or tax in any fiscal year exceed the total of such debt service requirements from that year, said surplus revenue thus accruing shall be retained by the Metropolitan Government as a reserve fund for future debt service requirements.

5.16.150 Termination of privilege tax for contract vehicles leaving the airport.
5.16.151
The privilege tax for contract vehicles leaving the airport authorized by the Article shall terminate once the total bonded indebtedness incurred for the modification or construction of a convention center facility by the Metropolitan Government has been paid in full as to bond principal and interest, including expenses of bond sale or sales, and the Metropolitan Council repeals the provisions of this Article. Provided however, that any funds remaining in the reserve fund after all obligations imposed under this provision of this part have been fulfilled, shall be used by the governmental board or agency responsible for the operation of the convention center for use by it in the operation, promotion and advertisement of the convention center facilities.

Section 5: Title 5, Chapter 32 is hereby amended by adding the following new Article III “Rental Vehicle Surcharge”:

5.32.190 Surcharge authorized.

A. In addition to state tax provided in T.C.A. § 67-4-1901, the surcharge or tax of One Percent (1%) of the gross proceeds derived from the lease or rental of any passenger motor vehicle, truck or trailer for a period of five (5) days or less; provided, that said surcharge or tax will not apply to any automobile rented as a replacement vehicle, the cost of which is covered by insurance or by a business that rents a truck or trailer for the purpose of transporting goods, or by any individual or business that rents a vehicle as a replacement while the renter’s vehicle is being repaired, replaced or serviced; provided further, that the individual presents to the renter upon return of the rented vehicle a copy of the repair or service invoice or signs a statement under penalty of perjury that the lease or rental of the vehicle is used as a replacement for a vehicle that is being repaired, replaced or serviced. The surcharge or tax shall not apply to any vehicle rental transaction in which an entity whose principal business activity is the sale or service of new and used motor vehicles is the renter. This surcharge or tax shall apply to the gross proceeds from the rental agreement, excluding any sales tax imposed by Chapter 6 of the Tennessee Code Annotated. The surcharge or tax shall also be subject to the exemptions provided by T.C.A. § 67-4-1906. The surcharge or tax shall not be subject to a credit provided by T.C.A. § 67-4-1903 and shall be implemented consistent with existing tax policies and procedures of the Department of Revenue and of the remainder of this Chapter.

B. All revenue received by the Metropolitan Government from this surcharge or tax shall be deposited into a Metropolitan Government fund entitled “The Convention Center Fund,” which shall be used for the purpose of paying costs associated with modification or construction of a publicly-owned convention center in excess of Four Hundred Million Dollars ($400,000,000.00) of costs within the territory of the Metropolitan Government. If the revenues from such surcharge or tax in any fiscal year exceed the total of such debt service requirements for that year, such surplus revenue thus accruing shall be retained by the Metropolitan Government as a reserve fund for future debt service requirements.

C. The surcharge for rental vehicles authorized pursuant to this article shall terminate once the total bonded indebtedness incurred for the construction of a convention center facility by the Metropolitan Government has been paid in full as to bond principal and interest, including expenses of bond sale or sales, and the Metropolitan Council has repealed the provisions of this Article. Provided however, that any funds remaining in the reserve fund after all obligations imposed under the provisions of this section have been fulfilled, shall be used by the governmental board or agency responsible for operation of the convention center for use by it in the promotion and advertisement of the convention center facilities.

Section 6. During the construction of the new publicly owned convention center as provided in this part, any contractor entering into a contract with the Metropolitan Government for the performance of work on such convention center shall pay all workers performing the work under such contracts not less than the prevailing wage rate for all types and classifications of work for contractors entering into a state contract pursuant to Tennessee Code Annotated, Title 12, Chapter 4, Part 4. In addition, all such contractors shall provide health insurance coverage for all workers performing work under such contracts.

After the construction of such convention center is completed, all persons employed to perform labor or services at such convention center shall be paid a wage which is not less than the average of the prevailing wage rate for all types and classifications of work for contractors entering into a state contract pursuant to Tennessee Code Annotated, Title 12, Chapter 4, Part 4. In addition, health insurance coverage shall be provided to all such employees.

Section 7: The metropolitan government, in soliciting bids for construction of a publicly owned convention center in excess of Four Hundred Million Dollars ($400,000,000.00) in costs located within the territory of such Metropolitan Government, shall actively solicit bids from minority owned businesses. Such Metropolitan Government shall strive to maximize participation of minority owned businesses to prime and second tier business contracting opportunities. The Metropolitan Council shall insure that the funds which are deposited into the Convention Center Fund, created pursuant to this Act, are expended in a non-discriminatory manner.

Section 8. The Metropolitan Government shall monitor the expenditure of funds from the Convention Center Fund to insure that all contractors, vendors, suppliers and professional services providers receiving compensation from such funds do not discriminate in hiring, partnering, contracting, or subcontracting, on the basis of race, religion, ethnic background, or sex.

Section 9. The Metropolitan Government shall monitor the results of minority owned business participation. Such government shall periodically investigate to ascertain whether minority owned business participation is being achieved at a level contemplated pursuant to subsection (b) of this section and shall report such information to the Comptroller of the Treasury in the manner prescribed in subdivision (4) of this section.

Section 10. The Metropolitan Government shall prepare and submit a quarterly report entitled “The Convention Center Compliance Report” which shall be submitted to the Comptroller of the Treasury no later than twenty (20) business days after the end of any calendar quarter in which funds are expended from The Convention Center Fund. Such report shall include:

(A) Data on the race, religion, ethnic background and sex of the workforce of each person that receives funds from The Convention Center Fund;

(B) Data on the actual expenditure of funds to minority owned businesses from The Convention Center Fund; and

(C) Data summarizing the findings of all periodic investigations conducted in accordance with subdivision (3) of this subsection.
(D)
Section 11. The Metropolitan Government is hereby authorized to commence collection of the four tourist accommodation taxes authorized hereinabove on September 1, 2007.

Section 12. This Ordinance shall take effect from and after its adoption, the welfare of the Metropolitan Government of Nashville and Davidson County requiring it.

Sponsored by: Mike Jameson

Amendment No. 1
To
Ordinance No. BL2007-1557

Mr. President:

I move to amend Ordinance No. BL2007-1557 as follows:

1. By amending Section 2 by deleting the phrase “subsections B(1), B(2) and B(3)”, wherein it appears in subsection B, and substituting in lieu thereof the phrase “subsections A(1), A(2) and A(3)”.

2. By amending Section 7 by deleting the phrase “pursuant to this Act”, and substituting in lieu thereof the phrase “pursuant to this ordinance”.

3. By deleting Section 9 in its entirety and substituting in lieu thereof the following new Section 9:

“Section 9. The Metropolitan Government shall monitor the results of minority owned business participation. The Metropolitan Government shall periodically investigate to ascertain whether minority owned business participation is being achieved at a level contemplated by Public Chapter No. 422, and shall report such information to the Comptroller of the Treasury in the manner prescribed in Public Chapter No. 422.”

4. By amending Section 10 by deleting the phrase “subdivision (3) of this subsection”, and substituting in lieu thereof the phrase “Public Chapter No. 422.

Sponsored by: Mike Jameson

LEGISLATIVE HISTORY
Introduced:	July 3, 2007
Passed First Reading:	July 3, 2007
Referred to:	Budget & Finance Committee Convention & Tourism Committee
Amended:	July 17, 2007
Passed Second Reading:	July 17, 2007
Passed Third Reading:	August 7, 2007 - Roll Call Vote
Approved:	August 9, 2007
By: