WHEREAS, there is a great need to promote and develop tourism, the second largest industry in the United States, and increase the inflow of tourism dollars resulting in economic benefits to the citizens of Mena; and.

WHEREAS, the City is authorized under Arkansas Code Annotated, Section 26-75-602(a)(c), as amended, to levy a gross receipts tax not to exceed three ( 3%) upon the gross receipts of hotels, motels, and restaurants within the City limits for the promotion and development of tourism within the City; and

WHEREAS, under Arkansas Code Annotated, Section 26-75-605, as amended, the City is authorized to create an Advertising and Promotion Commission to collect, determine the use of, and distribute and spend the tax funds collected; and

WHEREAS, the City Council of the City of Mena feels that it is in the best interest of the City that the said “Hospitality Tax” should be levied in the City of Mena.

NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF, MENA, ARKANSAS, THAT:

SECTION 1: In addition to the tax of one percent (1%) now being levied and collected in the City of Mena, Arkansas, pursuant to authority of Act 25 of 1* Extraordinary Session of 1981, as amended and Ordinance No. 815 of the City of Mena, Arkansas, there is hereby levied effective, June 1, 2003, a tax

Page 2; Ordinance No. 2049 of three (3%) upon the gross receipts or gross proceeds from the renting, leasing, or otherwise furnishing hotel, motel or short-term condominium: rental accommodations for sleeping, meeting, or party room facilities for profit in the City but such accommodation shall not include the rental or lease of such accommodations for periods of thirty (30) days or more; and a tax of one (1%) upon the gross receipts or gross proceeds received by restaurants,, cafes, cafeterias, delicatessens, drive-in restaurants, carry-out restaurants, concession stands, convenience stores, grocery store-restaurants, and all other establishments engaged in the selling of prepared food and beverages for on. or off premises consumption, but such tax shall not apply to such gross receipts or gross proceeds of organizations qualified under Section 501 (c): (3) of the Federal Internal Revenue Code. SECTION 2: The tax so levied shall be collected from the purchaser or user of the food or accommodations and shall be paid by the persons, firms, corporations,: associations, trusts, or estates (or other entity of whatever) liable therefore ‘. and selling such food or furnishing such accommodations. Collections shall be remitted to a designated agent of the “Commission” with forms provided by the commission in the same manner and at the same time as the tax levied by the Arkansas Gross Receipts Act of 1941, and Arkansas Code Annotated, Section 26-52-101 et. seq. SECTION 3: There is hereby created the City Advertising and Promotion Fund, to which

Page 3; Ordinance No. 2049 fund there shall be credited all collections of the Hospitality Tax as provided under Arkansas Code Annotated, Section 26-75-604(a).: SECTION 4: The City Advertising and Promotion Fund shall be used, in the manner determined by the City Advertising and Promotion Commission, for, advertising and promoting the City of Mena and its environs, for the construction, reconstruction, repair, maintenance, improvement, equipping, and operation of tourist promotion facilities in the City, and for all other purposes authorized by Arkansas Code Annotated, Section 26-75-606 as amended by Act 626 and Act 650 of 1989, as amended, including the pledge of revenues therein to the payment of bonds issued under state law. Such taxes shall not be used for general capital improvements within the city, for: the costs associated with the general operation of the city; or for general subsidy of any civic groups, or the chamber of commerce. SECTION 5: There is hereby created the City Advertising and Promotion Commission, Arkansas Code Annotated, Section 26-75-605, The Commission shall have;. ‘ all the powers and duties as prescribed by law. The Commission shall be composed of seven (7) members as follows: Four (4) members shall be owners or managers of businesses in the tourism industry, at least three (3) of whom shall be owners or managers of hotels, motels, or restaurants, one owner or manager may reside outside of the city, but within Polk County, Arkansas, Code Annotated, 26-75-605(a)(1) and all of whom shall be

Page 4, Ordinance No. 2049 appointed by the City Council for staggered terms of four (4) years; two (2) members shall be members of the City Council and shall be selected by the: City Council; and one (1) member shall be selected from the public at large, who shall reside within the city, and shall be nominated by the Mayor and approved by the City Council for a term of four (4) years, The staggered terms of the tourism industry representatives shall be determined by the process authorized by Act 626 of 1989, as amended. The commission shall meet at least quarterly and shall adopt rules and procedures as necessary for the effective operation of the commission.

SECTION6: (A) Any person, firm, corporation, association, trust, or estate (or other entity of whatever) required under this Ordinance to pay the hotel and restaurant tax: or file reports of said tax who willfully fails to pay said tax or file a report shall be guilty of a misdemeanor.

(B) In addition to all other powers granted to the Commission pursuant to

state law, the Commission shall have full enforcement and collection powers: as set forth in Arkansas Code Annotated Section 26-75-603,and Section 26-

18-101 et seq., as well as the power to:

(1) Assess penalties and interest against taxpayers who fail to timely report

or pay the tax. The penalty shall be equal to five percent (5%) of the unpaid

tax amount per month not to exceed a total assessment of thirty-five percent

(35%) of the unpaid tax. Simple interest on unpaid taxes shall be assessed

Page 5: Ordinance No. 2049 at the rate of ten percent (10%) per annum; (2) Assess unpaid or unreported tax within three (3) years of the date the tax. is due; (3) Provide for judicial relief from proposed assessments in accordance with, Arkansas Code Annotated, Section 26-75-603(d)(1).: (4) Issue certificates of indebtedness in accordance with subdivision 3 of: Arkansas Code Annotated, Section 26-75-603. SECTION 7: This Ordinance shall be repealed upon the enactment of a one percent (1%) city sales tax for general improvements approved by the voters. Tax may be used for but not limited to the following: sewer rehabilitation, parks and recreation, streets, advertising and promotion, and economic development,. SECTION 8: All ordinances and parts of ordinances in conflict herewith are hereby repealed. PASSED AND APPROVED THIS _24th DAY OF ______March, 2003. ATTEST: REGINA, CITY CLERK/TREASURER