                                 CODE OF VIRGINIA

ENTITLEMENT TO TAX REVENUES FROM TOURISM PROJECT (§ 58.1-3851.1)

A. For purposes of this section:
			&#8220;Economic development authority&#8221; means a local industrial
development authority or a local or regional political subdivision, the public
purpose of which is to assist in economic development.
			&#8220;Gap financing&#8221; means debt financing to compensate for a
shortfall in project funding between the expected development costs of an
authorized tourism project and the debt and equity capital provided by the
developer of the project.

B. 1. If a locality has established a tourism zone pursuant to § 58.1-3851, has
adopted an ordinance establishing a tourism plan as determined by guidelines set
forth by the Virginia Tourism Authority, and has adopted an ordinance
authorizing a tourism project to meet a deficiency identified in the adopted
tourism plan approved by the Virginia Tourism Authority, and the tourism project
has been certified by the State Comptroller as qualifying for the entitlement to
tax revenues authorized by this section, the authorized tourism project shall be
entitled to an amount equal to the revenues generated by a one percent state
sales and use tax on transactions taking place on the premises of the authorized
tourism project. The entitlement shall be contingent on the locality enacting an
ordinance designating certain local tax revenues to the tourism project pursuant
to subsection C and shall be subject to the conditions set forth in subsection
D. The purpose of such entitlement shall be to assist the developer with
obtaining gap financing and making payments of principal and interest thereon.
The entitlement shall continue until the gap financing is paid in full. Entitled
sales and use tax revenues shall be applied solely to payments of principal and
interest on the qualified gap financing.

   2. On a quarterly basis, the Tax Commissioner shall certify the amount of the
   entitled sales and use tax revenues to the Comptroller, who shall remit such
   revenues to the county or city in which the authorized tourism project is
   located. The county or city shall remit the revenues to the economic
   development authority. No payments herein shall be made until an agreement
   exists between the developer of the authorized tourism project and the
   economic development authority.

   3. The state sales and use tax entitlement established in subdivision 1 shall
   not include any (i) sales and use tax revenues dedicated pursuant to &#xA7;
   58.1-638 or 58.1-638.1 or (ii) revenues generated pursuant to Chapter 766 of
   the Acts of Assembly of 2013, the additional state sales and use tax in
   certain counties and cities assessed pursuant to subsection B of &#xA7;
   58.1-603.1 and subsection B of &#xA7; 58.1-604.01; or the additional state
   sales and use tax in certain counties and cities of historic significance
   imposed under &#xA7; 58.1-603.2.

C. If a locality has adopted the ordinances required by subdivision B 1 to
entitle an authorized tourism project to an amount equal to the revenues
generated by a one percent state sales and use tax on transactions taking place
on the premises of the authorized tourism project, the local governing body of
the county or city in which the authorized tourism project is located shall also
direct by ordinance that an amount equal to the revenues generated by at least a
one percent local sales and use tax, or an equivalent amount of other local tax
revenues as designated by the ordinance, generated by transactions taking place
on the premises of the authorized tourism project shall be applied to the
payment of principal and interest on the qualified gap financing. Such revenues
shall be remitted in the same manner, for the same time period, and under the
same conditions as the remittances paid in accordance with subsection B, mutatis
mutandis.

D. Prior to any entitlement to tax revenues for an authorized tourism project
pursuant to subsections B and C, the owner of such project shall have a minimum
of 70 percent of funding for the project in place through debt or equity, enter
into a performance agreement with the economic development authority or
political subdivision, and enter into an agreement to pay an access fee. The
access fee shall be equivalent to the state sales and use tax revenue generated
by and returned to the project pursuant to subdivision B 1 and shall be
collected by the locality and remitted to the economic development authority on
a quarterly basis. The access fee and the sales and use tax entitlement shall be
used solely to make payments of principal and interest on the qualified gap
financing.

E. In the event that the total amount of sales and use tax entitlement and the
access fee exceeds any annual debt service on the qualified gap financing, such
excess shall be paid to the principal of the loan until the qualified gap
financing is paid in full.

F. A tourism project that is entitled to and receives revenues pursuant to this
section shall not be eligible to receive revenues pursuant to &#xA7; 58.1-608.3,
58.1-3851.2, or 58.1-3851.3.

HISTORY: 2011, cc. 646, 814; 2012, cc. 73, 572; 2015, cc. 203, 349; 2022, c.
468.