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Bill grants hotel tax increase to Playhouse, restructures tourism board

Rep. Chuck McGrady Rep. Chuck McGrady

RALEIGH — The Legislature is close to enacting the one-cent increase in Henderson County’s tourism tax to fund the Flat Rock Playhouse and make the governing tourism board into an independent authority.

Legislation that has only two more stops before becoming law strips the Travel and Tourism board from under the Board of Commissioners and replaces it with a Tourism Development Authority of nine members. The bill passed the Senate 37-11 on Wednesday after the House approved it two days earlier.

An amendment adopted by the Senate on Wednesday directs the proceeds of the 1-cent increase — $223,000 this year — to the Playhouse “to be used for maintenance, operation, renovation and promotion of mainstage and downtown locations.”

The bill requires that membership be made up of three members appointed by the Board of Commissioners, three members appointed by the Hendersonville City Council, one member each by the Fletcher and Flat Rock town councils and one recommended by the Chamber of Commerce and appointed by county commissioners. It limits service on the board to five years running.

Of the nine members, at least a third must be affiliated with hotel and lodging businesses that collect the tax and half must be “currently active in the promotion of travel and tourism in the county.”

Henderson County commissioners voted 4-1 last month to ask the local delegation to file the bill raising the occupancy tax collected for overnight lodging from 5 to 6 cents. The increase will raise $222,900 in the upcoming year and grow to $270,100 by 2017, according to a fiscal analysis by legislative researchers. The projections would give the authority a $1.34 million in the fiscal year that starts Saturday.

County commissioners said they planned to direct at least part of the proceeds to the Flat Rock Playhouse, which is trying to pay off debt it incurred from a money-losing season in 2010 and slower ticket sales last year.

The bill in its original form did not specify where the money would go. That changed with the Senate amendment.

The structural changes came about because the old county board was “an old-style board” under county commissioners.

“It was established before the General Assembly put together guidelines on how those things ought to be set up,” said state Rep. Chuck McGrady, R-Hendersonville. As an authority, the board will have “the same structure as the majority of counties. Right now it’s a county function. The board doesn’t really have any legal authority of its own.”