KENAI PENINSULA BOROUGH

ORDINANCE 2005-05 (GLICK) SUBSTITUTE

AN ORDINANCE ENACTING KPB CHAPTER 5.19, PROVIDING FOR A

TRANSIENT ACCOMMODATIONS TAX AND PROVIDING FOR THE SUBMISSION TO THE VOTERS OF A PROPOSITION AUTHORIZING

THE BOROUGH TO IMPOSE THIS TAX

WHEREAS, due to the elimination of municipal revenue sharing, increased tax exemptions, significant increases in expenses including mandated retirement system contributions, insurance costs, and increased overall borough and school district expenses, the borough is considering a variety of measures to keep the borough unreserved general fund balance within the parameters established by Resolution 2001-045; and

WHEREAS, tourism is a sustainable renewable resource; and

WHEREAS, the Kenai Peninsula borough has funded the Kenai Peninsula Tourism and Marketing Council for the last fifteen years; and

WHEREAS, the continued marketing of the Kenai Peninsula as a tourist destination requires a stable source of funding; and

WHEREAS, several people have suggested that the borough impose a transient accommodations tax, otherwise known as a bed tax, to increase tax revenue derived from the many tourists who visit the Kenai Peninsula Borough; and

WHEREAS, bed taxes are common throughout the State of Alaska and other states in the United States; and

WHEREAS, as a bed tax is a form of a sales tax, voter approval is required before the bed tax may be imposed;

NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH:

SECTION 1. That KPB Chapter 5.19 is hereby enacted as follows:

Chapter 5.19. Transient Accommodations Tax

5.19.100. General--Levied--Amount.

A. The borough levies a tax on all accommodations rent payable to a seller and not exempt from taxation under subsection 5.19.200 in the amount of up to 4 percent of the accommodations room rent. The guest shall pay the tax to the seller at the time the rent is paid. The seller shall collect the tax when the seller collects the rent.

5.19.110. General--Proceeds--Payment to cities.

The borough may enter into cooperative agreements with cities in the borough to promote tourism using funds generated by this tax. Such agreements must be approved by the assembly and shall include provisions ensuring the use of borough funding complies with legal limitations in the borough's nonareawide authority to promote tourism.

5.19.120. General--Payment by buyer and collection by seller.

The obligation of the tax is upon the buyer. The seller shall collect the tax at the time of payment for the rent.

5.19.130. General--Seller--Liability to the borough--Successor liability--Corporate officer liability.

A. All transient accommodations taxes collected or which should have been collected pursuant to this chapter are borough moneys for which the seller is at all times liable to the borough. The seller is also liable for all monies collected from the buyer as transient accommodations tax.

B. Any person acquiring an ownership interest in an ongoing business or the accounts receivable of a business, whether by purchase, foreclosure, or otherwise, shall be liable for the payment of taxes, penalties, interest, fees and costs accruing and unpaid to the borough on account of the operation of the business by the former owner, owners or assigns. The borough may continue to make efforts to collect the tax from the person who owned the business at the time the liability was incurred.

C. The liability of a purchaser or other entity for outstanding taxes, penalties, interest, fees and costs accrued and unpaid by the former owner shall be limited to an amount stated in writing by the borough in response to a release of information request. The borough shall have 15 days to respond to the request.

D. The president and any officer, employee or agent of a corporation having control of, supervision of, or charged with the responsibility of filing transient accommodations tax returns or remitting transient accommodations taxes is personally liable for any unpaid corporate transient accommodations taxes, penalties, interest, fees and costs accruing and unpaid to the borough. Dissolution of, or sale of, or other change in the form of the corporation does not discharge this liability.

5.19.140. General--Administration enforcement authority--Request for ruling--Appeal of determination.

A. The mayor shall have the authority to enforce proper registration, reporting and tax collection requirements imposed in this chapter, including the authority to implement and interpret this chapter, in a manner consistent with the provisions of this chapter and determine the appropriate application of fees as provided in KPB 5.19.650.

B. Any taxpayer under this chapter, or any seller obliged to collect the tax under this chapter, or any borough official may apply to the mayor for a determination on the application of this chapter to an actual fact situation.

C. Any taxpayer or seller may appeal any written determination made by the mayor or borough administration pursuant to this section or section 250 of this chapter by appealing to the superior court in the Kenai venue district under the rules of appellate procedure governing appeals from administrative agency decisions, within 30 days of the date of the determination; otherwise, a challenge or protest of a determination of the mayor or borough administration made under this section or section 250 of this chapter is barred.

5.19.150. General--Refunds.

A. No transient accommodations tax refund shall be made unless the claimant complies with the requirements to obtain a transient accommodations tax refund set out in this section.

B. A claim for refund of transient accommodations taxes paid for exempt accommodations shall be denied unless the claimant complies with 5.19.250.

C. A claim for refund of transient accommodations taxes over-collected in error is barred unless

1. The claimant files a claim for refund with the borough within one year of the date of sale, on the form prescribed by the borough; and

2. If the claimant is a seller, and the tax refund is owed to any buyer, the seller submits, and the borough approves, a refund plan to all affected buyers.

D. A claim for refund overpaid in error because of a mistake on the face of a transient accommodations tax return is barred unless:

1. The claimant files a claim for refund within one year of the due date of the return, on the form prescribed by the borough; and

2. The claimant files an amended return pursuant to the requirements of this chapter.

E. When the borough initiates an audit or estimate pursuant to KPB 5.19.570-580, the period for claiming a refund under subsections C. and D., above, is the same as the period under audit, but in no case more than three years from the date of sale.

F. The borough shall not be liable for interest on any refund claimed or paid, or for any costs incurred by a buyer or seller in claiming or obtaining a refund.

5.19.200. Exemptions/waivers--Exemptions.

A. The following classes of accommodation sales are exempt:

1. Accommodation sales which the borough is prohibited from taxing by the Constitution or laws of the United States or of the State of Alaska;

2. Receipts of nonprofit schools and student organizations within the schools for extracurricular activities or events;

B. The following classes of buyers are exempt from the provisions of this chapter:

1. Retail sales, services and rentals to the United States, the State of Alaska, or any instrumentality or political subdivision of either;

C. The following classes of sellers are exempt from the provisions of collecting the transient accommodations tax set forth in this chapter, but must adhere to the provisions set forth in section 5.19.300 of this chapter:

1. An organization that has obtained a 501(c) (3) exemption ruling from the Internal Revenue Service, as long as proof of such ruling is provided to the borough administration.

D. Subject to the limitation below, no borough transient occupancy tax shall be imposed to the extent and in the amount that a transient occupancy tax is imposed by a city on the same transaction as is the borough tax. This exemption shall not exceed fifty percent of the borough transient occupancy tax:

5.19.210. Exemptions/waivers--Exemption for sales for resale.

The following sales of accommodations are exempt under this chapter:

• Sales to a wholesale or retail dealer in the accommodations sold, for the purpose of resale by the dealer;

5.19.220. Exemptions/waivers--Exemptions--Nonprofit or Governmental Entities.

A. In order to receive an exemption from payment of transient accommodations tax under section 5.19.200(B)(1), a buyer shall:

1. Present to the seller a government purchase order, government check or credit card issued in the name of the government agency, for each sale.

5.19.230. Exemptions/waivers--Exemptions--Resale certificate.

A. In order to receive an exemption from payment of transient accommodations tax under section 5.19.210, a seller shall obtain a resale certificate as provided in KPB 5.18.240 (KPB Sales Tax Code section 240), and present the resale certificate at the time of each sale.

5.19.240. Exemptions--Seller's liability for incorrect determination--Buyer's protest--Appeals.

A. A seller shall determine in the first instance whether a sale is exempt under this chapter. However, if a seller incorrectly determines that a sale is exempt, and does not collect the tax from the buyer, then the seller is liable to the borough for the uncollected tax.

B. If the seller determines that a sale is not exempt, but the buyer believes the sale to be exempt, then the buyer may protest the tax by paying the tax at the time of sale and filing a certificate of protest form with the borough, no later than 60 days after the date of sale. The seller shall collect the protested tax at the time of the sale.

C. If the seller determines that a sales is exempt, the seller can request a determination on whether a sale is exempt by filing a certificate of protest form with the borough, no later than 60 days after the date of sale. The seller shall continue to collect the tax at the time of sale, until the seller receives a determination from the borough.

D. The mayor will rule on each protest by sending to the buyer or seller a written determination on the protest. If the protest is allowed, a refund of the transient accommodations tax paid will be remitted to the buyer with the determination.

E. Either the buyer or seller may appeal the mayor's determination to superior court pursuant to KPB 5.19.140(C).

5.19.250. Exemptions/waivers--Waiver--Application for extension of time--Assembly authority.

A. For good cause shown, the mayor may grant extensions on any time limitation described in this chapter upon application filed on or before the date specified as the original time limitation; except that no extension of time shall be allowed for filing claims for refund of taxes, or for appeals to superior court from determinations of the borough.

B. The assembly shall have no authority to grant any extension of time or waiver of any provision of this chapter or any regulations adopted pursuant to this chapter other than by ordinance.

5.19.260. Exemptions/waivers--Waiver--Uncollected taxes, penalties and interest.

A. The mayor may forgive the payment of uncollected transient accommodations taxes, interest and penalty thereon, and penalties for failure to file owing by a seller to the borough upon a determination by the mayor that such uncollected transient accommodations taxes:

1. Have never been collected by a substantial portion of a clearly, definable class of seller; or

2. Have never been collected on a substantial portion of a clearly defined class or type of transaction or service; or

3. Where an interpretation is affirmatively provided by the borough to an inquiring seller, and the seller in reasonable reliance upon that interpretation fails to collect a transient accommodations tax, which collection is later determined to have been legally required under this chapter.

B. The mayor shall notify the assembly in writing of any such incidence of forgiveness which shall be final unless overridden by the assembly within 30 days of such forgiveness.

5.19.300. Registration--Certificate of registration required.

All sellers of accommodations shall file with the borough an application for a certificate of registration, on a form provided by the borough, prior to commencing business, or the opening of an additional place of business. Each business shall be registered under the advertised name and locations of the business. If a seller engages in business at more than one location, the seller shall obtain a certificate of registration for each location.

5.19.310. Registration--Certificate issuance--Display required--Compliance agreement--Bond requirements.

A. Upon receipt of a properly executed application indicating that all returns required to have been filed pursuant to this chapter by the applicant as seller or agent of any seller have been filed, and that all transient accommodations taxes required to have been remitted to the borough have been paid, the mayor will issue without charge to the seller a certificate of registration. The certificate shall state the address of the place of business to which it is applicable, the applicable State of Alaska business license number, if any, and shall authorize the seller to collect the tax.

B. The certificate must be prominently displayed at the place of business named in the certificate.

C. Where the application or borough records indicate that applicant is currently in violation of filing and remittance requirements of the borough transient accommodations tax provisions, the mayor may deny the application for registration until such time as applicant enters a binding agreement setting out a method by which full compliance will be attained.

D. Before issuing a registration certificate, the mayor may require an applicant to post a cash or other bond with the borough in an amount sufficient to insure the full and prompt collection and payment of transient accommodations taxes. The bond is forfeited upon the failure to file any transient accommodations tax return; however, the borough reserves the right to collect any and all delinquent amounts owed by the applicant.

E. Upon payment of the fee established by regulation, the mayor will issue a duplicate transient accommodations tax certificate to any seller whose certificate has been lost or destroyed.

5.19.320. Registration--Certificate nonassignable--Surrender requirements--Successor seller.

The certificate of registration is non-assignable and nontransferable and must be surrendered to the mayor by the seller to whom it was issued upon his ceasing to do business within the taxing jurisdiction named therein. If there is a change in the form of organization such as from a single proprietorship to a partnership or a corporation, the admission or withdrawal of a general partner, or a change in seller's agent for service, the seller making such change shall surrender his old certificate to the mayor for cancellation. The successor seller is required to file a new application for a certificate of registration. Upon receipt of such application, properly executed, as provided in this chapter, a new certificate will be issued to such successor seller.

5.19.330. Registration--Certificate index.

The mayor or his designee shall maintain in a public place within the borough administration building a current index alphabetized by name of business and name of owner, updated not less than quarterly, of all current certificates of registration for public inspection.

5.19.400. Computation--Addition of tax to total retail price.

A. The tax to be added to the accommodations price shall be up to four percent (4%) of the accommodations price rounded off to the nearest cent by eliminating any fraction of one-half cent or less and by increasing any fraction over one-half cent to the next highest cent. Each seller shall be furnished the schedule of tax payable on each taxable amount from one cent to $100.00.

5.19.410. Computation--Seller--Restrictions on imposition of tax.

A. The seller shall separately state the tax to the buyer on each taxable transaction.

B. A seller shall not advertise, hold out or state to the public or to any buyer, directly or indirectly, that the tax payment or any part thereof imposed by this chapter will be assumed or absorbed by the seller, or that it will not be added to the accommodations price or that it will be refunded or assumed, in whole or in part.

5.19.420. Application of payments.

• Payments on transient accommodations tax accounts shall be applied to the oldest balance due, by transient accommodations tax period, in the following order: first to accrued fees and costs, then accrued interest, then accrued penalty, then to the tax principal; and then the next oldest balance due, in the above order, and so forth, until the payment is applied in full; except as otherwise provided in this section.

B. Payments on transient accommodations tax accounts submitted with transient accommodations tax returns shall be applied to the most current return period, in the following order: first to accrued interest, then to accrued penalty, and then to the tax principal. Any remaining monies shall be applied as in subsection A, above.

C. Payments on transient accommodations tax accounts where transient accommodations tax liens have been recorded to secure payment on the account shall be applied to the oldest unsecured balance due, by tax reporting period, in the order listed in subsection A, above.

D. The borough may by written agreement, or shall by court order, vary the application of payments.

5.19.430. Tax jurisdiction--Location of accommodations.

The rate of tax to be added to the sale price is based on the place of accommodations.

5.19.500. Returns/records/audit--Returns--Filing required--Filing schedule.

A. Every seller is required to file a transient accommodations tax return, on forms furnished by the borough, according to the filing schedule established by the borough for that seller, whether or not any sale was made.

B. All sellers shall file transient accommodations tax returns on a quarterly basis. The borough may require more or less frequent filing under the following conditions:

1. On a case-by-case basis, the borough may determine that an alternate filing schedule is appropriate. In such cases, the seller will be notified in writing of the filing schedule.

5.19.510. Returns/records/audit--Returns--Contents.

A. Every seller required by this chapter to collect transient accommodations tax shall file with the borough upon forms furnished by it a return setting forth the following information with totals rounded to the nearest dollar:

1. Gross sales;

2. The nontaxable portions separately stating the amount of sales revenue attributable to each class of exemption;

3. Computation of taxes to be remitted;

4. Such other information as may be required by the borough.

B. The borough reserves the right to reject a filed return for failure to comply with the requirements of this section, for one year from the date of filing. The borough shall give written notice to a seller that a return has been rejected, including the reason for the rejection.

5.19.520. Returns/records/audit--Returns and transient accommodations taxes--Filing and payment required by due date.

A. A completed transient accommodations tax return, together with remittance in full for the amount of transient accommodations taxes collected or which should have been collected, or for monies collected as accommodations by the seller, must be transmitted to the borough on or before the first business day following the last day of the month following the end of each reporting period.

B. A transmittal of taxes made by mail shall not be considered delinquent if the postmark on the envelope indicates the date of mailing to be on or before the first business day following the last day of the month following the end of the reporting period.

5.19.530. Returns/records/audit--Returns--Credit for costs of collection.

A. If a return is filed and tax payments are remitted by the filing deadline, a seller in full compliance with this chapter may retain 5% of the tax collected, to a maximum of $1,000 per quarter, to cover the costs of collecting the tax.

B. If the seller is not in full compliance with this chapter, the seller is not eligible for and may not retain the 5% credit.

C. Full compliance for the purposes of this section means that a seller does not have an account with a balance due, or does not have a missing or incomplete return outstanding.

5.19.540. Returns/records/audit--Returns--Confidentiality requirement--Exceptions.

A. Returns which include remittance in full of all transient accommodations taxes due and which are timely and properly filed with the borough for the purposes of complying with the terms of this chapter and all data obtained from such returns are confidential, and such returns and data obtained there from shall be kept from inspection by all private persons. Nothing contained in this section shall be construed to prohibit the audit and investigation by the borough of any return filed under this chapter or of the books and records of any seller required to file any return under this chapter.

B. Nothing contained in this section shall be construed to prohibit the delivery to a person, or his duly authorized representative, of a copy of any return or report filed by him, nor to prohibit the publication of statistics so classified as to prevent the identification of particular buyers or sellers, nor to prohibit the furnishing of information on a reciprocal basis to other agencies or political subdivisions of the state or the United States concerned with the enforcement of tax laws.

C. Nothing contained in this section shall be construed to prohibit the disclosure through enforcement action proceedings or by public inspection or publication of the name, estimated balance due, and current status of payments, and filings of any seller or agent of any seller required to collect transient accommodations taxes or file returns under this chapter, who fails to file any return and/or remit in full all transient accommodations taxes due within 30 days after the required date for that business. Entry into any agreement whether pursuant to the provisions of this chapter or otherwise shall not act as any prohibition to disclosure of the records of that seller as otherwise provided in this chapter.

D. A prospective lessee or purchaser of any business or business interest may inquire as the obligation or tax status of any business upon presenting to the mayor a release of tax information request signed by the registered owner of the business.

5.19.550. Returns/records/audit--Final return--Required information.

Fifteen days prior to the sale, lease, or other disposition, or change in ownership interest, other than a transfer of outstanding shares of stock, or upon incorporation of any business registered pursuant to this chapter, the business seller shall file a notice with the borough together with an informational return identifying the name and address of each person or entity involved in the change, the nature of the change and the effective date of the change.

5.19.555. Returns/records/audit--Returns--Finality of returns--Amendment of returns--Escaped assessments.

A. A seller may file an amended return with the borough, and the borough may accept the amended return, but only in the following circumstances:

1. The amended return is filed within one year of the original due date for the return; and

2. The seller provides justification in writing for requesting approval of the amended return; and

3. The seller was registered to collect transient accommodations tax during the period for which the amended return is filed and filed an original return for that period; and

4. The seller agrees to submit to an audit upon request of the borough.

B. If the borough rejects an amended return, it shall give written notice to a seller, including the reason for the rejection.

C. The borough may adjust a return for a seller if, after investigation, the borough determines that the figures included in the original returns are incorrect, and that additional transient accommodations taxes are due; and the borough adjusts the return within three years of the original due date for the return.

5.19.560. Returns/records/audit--Records--Seller record keeping required--Loss of records.

A. Every seller engaged in activity subject to this chapter shall keep and preserve suitable records of all sales made by the seller and such other books or accounts as may be necessary to determine the amount of tax which he is obliged to collect. Every seller shall preserve suitable records of sales for a period of 3 years from the date of the return reporting such sales, and shall preserve for a period of 3 years all invoices of goods and merchandise purchased for resale, and all such other books, invoices and records as may be necessary to accurately determine the amount of taxes which the seller was obliged to collect under this chapter.

B. A seller shall immediately notify the borough of any fire, theft or other casualty which prevents his or her compliance with this chapter. The casualty constitutes a defense to any penalty provided in this chapter if determined to be the proximate cause of the failure to comply for a given reporting period, but does not excuse the seller from liability for taxes due. Accidental loss of funds or records is not a defense against the penalties of this chapter.

5.19.570. Returns/records/audit--Audit--Authority--Seller's consent to inspection of federal income tax returns--Estimated tax--Results.

A. The borough administration may examine and audit any relevant books, papers, records, returns or memoranda of any seller, may require the attendance of any seller or buyer, or any officer or employee of a seller or buyer at a meeting or hearing, and may require production of all relevant business records, in order to determine whether the seller has complied with this chapter.

B. A seller required to register for transient accommodations tax collection under this chapter consents to the inspection of the seller's federal income tax returns in order to determine the seller's compliance with this chapter.

C. If the borough is unable to ascertain the amount of tax due from a seller because the seller has failed to keep accurate records, has failed or refused to allow an audit or inspection of records, has failed to file a return, has falsified records or, has improperly calculated the tax, then the borough may estimate the tax due based upon any information available to it. The borough shall send a written notice of the estimated tax due to the seller, and of the assessment of an audit estimate fee.

D. The results of any examination or audit performed under this section shall be reported in writing to the seller.

5.19.580. Returns/records/audit--Audit--Protest.

A. If the seller wishes to dispute the amount of the estimate, or the results of an examination or audit, the seller must file a protest with the borough, within 30 days of the date of the notice of estimated tax or results of an audit or examination. The protest must set forth:

1. the seller's justification for reducing or increasing the estimated tax amount, including any missing tax returns for the periods estimated; or

2. the seller's reasons for challenging the examination or audit results.

B. In processing the protest, the borough may hold an informal meeting or hearing with the seller, either on its own or upon request of the seller, and may also require that the seller submit to an audit.

C. The borough administration shall make a written determination on the seller's protest, and mail a copy of the determination to the seller.

5.19.600. Enforcement--Civil and criminal actions--Payment agreements--Joint bank accounts--Offset.

A. Nothing in this chapter shall be construed as preventing the borough from filing and maintaining an action at law to recover any taxes, penalties, interest, and fees due from a seller. Failure to register under this chapter or to collect taxes which otherwise should have been collected under this chapter shall not be a defense to an action by the borough against such seller to recover all amounts due. Each act prohibited in this chapter constitutes a separate cause of action or offense.

B. The mayor may enter into an agreement secured by a confession of judgment or a deed of trust on property with sufficient equity to cover the liability for delinquent transient accommodations taxes on such payment terms as the administration finds reasonable, provided that the terms shall require full payment of all obligations of the seller within a maximum period of 24 months from entry of such an agreement, unless a shorter term is required by other provisions of this code, in which case those provisions shall be followed. The mayor shall not enter into a repayment agreement with a seller who has been involved in a repayment agreement within the prior five (5) years, unless otherwise provided in this code.

C. All businesses or owners of businesses against which the borough has an outstanding judgment may be required by the mayor to deposit transient accommodations tax monies collected, on a weekly basis, to a joint bank account upon which the borough is signatory. Dual signature would be required for withdrawal from the account.

D. The borough shall set off all delinquent borough transient accommodations taxes owed by a seller against borough or school district accounts payable to the seller or credit balances on borough or school district accounts in the name of the seller.

5.19.610. Enforcement--Failure to register--Criminal penalty--Civil penalty--Other remedies.

A. A seller who fails to obtain a registration certificate as required by this chapter, after notice in writing of the obligation to register has been delivered personally or by regular mail to the seller, the seller's place of business, or the last known address of the seller is subject to a civil penalty not to exceed $1,000, in addition to any taxes, penalties, interest, costs and actual attorney fees that may be assessed against the seller.

B. The mayor may pursue any other civil or criminal remedies at law against a seller who fails to obtain a registration certificate required by this chapter, including injunctive relief.

5.19.620. Enforcement--Failure to file returns or remit taxes--Criminal penalty--Civil penalties and interest--Injunction--Publication.

A. Failure to file 2 or more returns in any 1 calendar year after notice from the borough to the seller's last registered address; when intentional, constitutes a misdemeanor and is punishable by imprisonment for up to 30 days, and by a fine not to exceed $500.00, plus costs of prosecution, in addition to any civil penalty assessed.

B. A seller who fails to file a return within the time required by this chapter, or who fails to remit all taxes collected by him, or later found to be due, is subject to a civil penalty of 5% per month of the amount of taxes found to be due, to a maximum of 25%. The filing of an incomplete return, or the failure to remit all taxes, is the equivalent of filing no return. All taxes due but not paid within the time required by this chapter shall accrue and be assessed an interest charge at the rate of 15% per annum.

C. Any seller who fails to file a return required under this chapter within fifteen (15) days of written notification by regular mail, regardless of whether any taxes were due for the reporting period for which the return was required, shall be subject to a penalty of $25.00 for each return not filed, in addition to any penalty for late filing.

D. Sellers who have not filed returns for two (2) consecutive reporting periods shall be assumed to have ceased conducting business and shall be removed from the roll of active businesses. Reinstatement of a business removed from the active roll by this section shall require the payment of a mandatory reinstatement fee.

E. If the mayor has reason to believe that a seller who has been removed from the roll of active businesses pursuant to this section is in fact continuing to conduct business, the mayor may cause a proceeding to be filed in the Superior Court requesting the issuance of an injunction prohibiting that business from continuing to conduct business.

F. As soon as practicable after the expiration of thirty days following the end of each calendar quarter, the borough shall publish in a newspaper of general or customary circulation in the appropriate area of the borough, a list of every seller who:

1. Was conducting business in the borough and was required to file a return during that quarter, but who has not filed the required return, unless the seller has paid any balance due for that period in full.

2. Did not pay all balances due, as long as the balance due is greater than $100; or

3. Owes taxes, penalty or interest pursuant to a payment agreement unless the payment agreement required payment in full within 30 days of the date of execution of the agreement.

G. Notwithstanding subsection (F) above, the borough is not required to include in the quarterly publication a closed business which has been published in the preceding four publications.

5.19.630. Enforcement--Failure to keep adequate records.

Each of the following acts, when intentional, constitutes a misdemeanor and is punishable by imprisonment for up to 30 days, and by a fine not to exceed $500.00, plus costs of prosecution, in addition to any civil penalty assessed:

A. Falsification or misrepresentation of any record filed with the borough hereunder or required to be kept hereby, if used to mislead borough tax authorities;

B. Refusal of a seller to allow inspection at reasonable times of records required to be kept by this chapter.

5.19.640. Enforcement-- transient accommodations tax liens.

A. The mayor may cause a transient accommodations tax lien to be filed and recorded against all real and personal property of a registered seller where the seller has:

1. Failed to file transient accommodations tax returns for two consecutive filing periods as required by the chapter; or

2. Failed within 60 days of the end of the filing period from which taxes were due to either (a) remit all amounts due or (b) to enter into a secured payment agreement as provided in this chapter.

B. Prior to filing a transient accommodations tax lien, the mayor shall cause an additional written notice of intent to file to be mailed to the last known address of the delinquent seller.

5.19.650. Enforcement--Schedule of Fees.

The following fees shall be imposed and collected pursuant to this chapter:

A. Issuance of a duplicate transient accommodations tax certificate at a rate established by regulation;

B. Missing filing fee at the rate of $25.00 for each return not filed;

C. Reinstatement to active roll at the rate of $100.00 per business;

D. Audit estimate preparation fee at a rate established by regulation but not to exceed $100.00.

5.19.900. Definitions.

When not clearly otherwise indicated by the context, the following words and phrases, as used in this chapter, have the following meanings:

A. "Finance director" means the Kenai Peninsula Borough finance director or the director's designee

B. "Buyer" means a person who rents a hotel or motel room for a term less than 30 consecutive days. A person who rents a hotel or motel room for a term of 30 consecutive days or more for use by that person's employees for periods of less than 30 consecutive days each on a rotating basis is not a buyer.

C. "Hotel room" or "motel room" means a structure or part of a structure rented, or offered for rent, for a term of less than 30 consecutive days for dwelling, lodging or sleeping purposes, including without limitation bed and breakfast establishments, cabins, and other similar temporary sleeping facilities, but excluding a structure or part of a structure rented or offered for rent solely in connection with a principal business or institutional purpose other than providing meals, lodging, entertainment or recreation; for example, a hospital or university dormitory.

D. "Seller" means a person who offers hotel or motel rooms for rent and to whom rent for a hotel or motel room is payable, either directly or through an agent or employee.

E. "Quarter" means any one of the four consecutive three-month periods in a calendar year, the first of which commences January 1.

F. "Rent" means

1. to rent a room or other accommodation means to obtain the right to use or occupy the room or other accommodations; and

2. a monetary consideration paid to rent an accommodation.

SECTION 2. 5.20.190 Use of Transient Accommodations Taxes.

The room tax fund is established to account for revenues from the transient accomodations tax to be used for tourism marketing.

A. On the first business day of July following the close of the preceding fiscal year, an amount equal to at least 25 percent of the transient accommodations taxes received for the preceding fiscal year shall be transferred to the room tax fund. Subsequent closing and audit adjustments to transient accomodations tax revenue of the preceding fiscal year shall be made to the room tax fund as necessary.

B. The balance of transient accommodations taxes remaining after funds have been transferred to the room tax fund as provided in subparagraph A of this section shall be available to support general government operations.

SECTION 3. That a ballot proposition shall be placed before borough voters at the next regular election to read as follows:

PROPOSITION No. ______

Shall Ordinance 2005-05 (Substitute), providing for the imposition of up to 4 percent transient accommodations tax, be ratified?

Yes ____ No ____

SECTION 4. That Section 3 shall become effective immediately upon the enactment of this ordinance.

SECTION 5. That Sections 1 and 2 of this ordinance shall become effective January 1, 2006, only if the proposition contained in Section 3 is approved by a majority of voters voting on the question in the regular election of October 4, 2005.

ENACTED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH THIS 9TH DAY OF JUNE, 2005.

Sherry Biggs, Borough Clerk