Summary of HB 1215 (Session 2025, North Carolina) – Garner Manager/ Wake Municipal Meals Tax Reallocation
Date Filed: April 30, 2026
Sponsor: Representative Paré (co-sponsors: Erin Paré, Mike Schietzelt)
Overall purpose
- The bill has two main, distinct parts:
1) Local governance: authorize the Town Manager of Garner to settle certain small-town claims without prior Town Council action, subject to attorney approval.
2) Revenue allocation: modify how Wake County’s prepared food and beverage (PFB) tax revenues are allocated among municipalities (including Raleigh), Wake County, and related tourism-oriented programs, with an emphasis on distributing funds to promote travel, tourism, and regional facilities.
Part I. Garner Town Manager settlement authority (Section 1)
- What it does:
- Expands or codifies the Town of Garner’s ability to settle certain town claims without prior council approval.
- Specific authorities authorized for settlement by the town manager (subject to requirements):
1) Personal injury or property damage claims with actual loss up to $10,000 (note: the text lists both $100 and $10,000 in different places; the more coherent interpretation is up to $10,000, reflecting the upper limit for such settlements) and that do not exceed actual loss including time loss, medical expenses, etc.
2) Eminent domain claims where the amount is within the budgeted amount for a capital improvement project.
3) Debts owed to the town where the amount does not exceed $10,000.
- Conditions and process:
- Settlements must be approved by the town attorney.
- Settlements must be reported to the town council in a timely manner.
- A settlement constitutes a complete release of the town from all damages related to the claim.
- Effective date:
- This Part becomes law upon enactment.
Part II. Wake County Municipalities / Meals Tax Reallocation (Section 2)
- Context:
- Amends provisions related to Wake County’s authority to levy an intercounty “prepared food and beverage tax” (PFB tax) up to 1% on prepared food and beverages sold in the county.
- Updates definitions and administration rules to align with interlocal agreements and distribution practices.
- Key provisions related to the PFB tax (as amended):
- Intent and definitions: clarifies terms such as “prepared food and beverage,” “promote travel and tourism,” “retailer,” and “taxable establishment.”
- Levy and interlocal agreement requirements:
- Before levying the tax, Wake County and the City of Raleigh must enter into an interlocal agreement (Article 20, Chapter 160A) detailing capital projects to be funded by the tax and a preliminary schedule.
- If the agreement isn’t finalized within 3 years after enactment, the section is repealed.
- After levy, the interlocal agreement must be amended to include at least three other municipalities within the county.
- Section 5. Tax authorization and use:
- The Wake County Board of Commissioners may impose a 1% PFB tax with a public hearing.
- The county and City of Raleigh must negotiate the interlocal agreement prior to levy; exemptions and refunds provisions remain in place (Sec. 6) with standard refund mechanics for non-profit/government entities.
- Exemptions and refunds (Sec. 6):
- Exemptions for boarding houses, vending machine sales, bundled lodging/food charges, employer-provided meals, and grocery store deli/food sales (with specific caveats).
- Nonprofit and governmental entities may receive refunds for PFB taxes paid on eligible purchases, following the same rules and documentation as the state-level sales tax refund process.
- Levy date and administration:
- Levy effective date must be specified in the ordinance; cannot be earlier than January 1, 1993 (preservation of existing policy language).
- Sec. 11 Distribution and Use of PFB tax:
- Anticipated annual net proceeds: at least $4.5 million.
- Distribution framework (post-administration costs):
- Greater Raleigh Convention and Visitors Bureau: $675,000 for travel/tourism promotion (annually).
- Municipal distributions: each municipality receives a share proportional to its actual PFB tax collections, with Raleigh and Cary having special rules:
- Angier and Durham portions go to Wake County; Cary’s share is reduced by an offset amount.
- Municipalities must use net proceeds to promote travel and tourism or fund allowable activities; funds held in a special non-reverting fund for up to 5 years; annual reporting required to Wake County.
- Eligible activities include facilities related to convention/visitor venues, museums, performing arts, and other tourism-related programs (e.g., parking, events, cultural programs).
- Raleigh’s distribution: 47.75% of net monthly proceeds, allocated with a priority sequence:
- Up to $680,000 for convention/visitor facilities, off-street parking, and related programs.
- Additional net proceeds may fund expansions to the Raleigh Civic Center Complex, sports/cultural facilities, etc.; reserves allowed; expenditures require prior county-city agreement.
- Wake County’s distribution: 37.25% for planning and tourism/preservation-related activities; funds kept in a non-reverting fund; quarterly reporting required.
- Eligible uses mirror the broader tourism/promotion activities in Subsection (3): planning, facilities, parks, museums, and related programs; reserves permitted; County-city agreement required for expenditures.
- Small Tourism Projects Grant Fund: funds for municipalities (prioritizing non-Raleigh/Cary) for tourism-related projects designed to increase tourism/patronage; a committee evaluates proposals; possible outright grants or loan guarantees (subject to caps; no loan guarantee exceeding fund amount).
- Centennial Authority transfers: prior/ongoing arrangements for funding a regional facility near Carter-Finley Stadium, including prior transfers to the Centennial Authority (notably separate outlays and ongoing transfers for operation/maintenance).
- Sec. 13. Future Revenue Allocations:
- If annual net proceeds exceed $4.5 million, additional net proceeds up to $6.5 million are allocated 75% to Raleigh and 25% to Wake County; above $6.5 million, allocation becomes 60% to Raleigh and 40% to Wake County.
- Sec. 14. Transfers to Centennial Authority:
- Historical language about shifting undesignated proceeds to a regional facility (01/1996-1997) remains in place, including annual July transfers from Raleigh and Wake County to the Centennial Authority for regional facility management and maintenance.
Effective date and implementation (Part II, Section 2)
- Part II becomes effective July 1, 2026.
- Wake County and the City of Raleigh must amend the interlocal agreement within 90 days of enactment to align with the revised distribution framework.
Administrative and timeline notes
- Some provisions reference older statutory sections and historic interlocal agreements.
- The bill imposes a 3-year deadline to finalize the required interlocal agreement before levy and requires inclusion of additional municipalities after levy.
- Annual reporting and quarterly accounting are expressly required for funds distributed to municipalities and to Wake County.
Implications and potential impact
- Garner: Town Manager settlement authority could streamline minor settlements up to roughly $10,000 (subject to proper attorney approval and reporting).
- Wake County municipalities: The bill formalizes and expands the framework for distributing PFB tax proceeds to fund tourism, promotions, and facilities, potentially increasing funding for tourist-related infrastructure and programming, while requiring interlocal coordination and annual reporting.
- Raleigh and Wake County: The distribution framework creates explicit tiers and priorities for funding regional facilities, tourism marketing, and small tourism grants, with sunset/recapture mechanisms if interlocal agreements are not maintained.
Note: The bill uses some blended or conflicting numeric notes within the text (e.g., conflicting settlement thresholds). The explicit, operative thresholds should be verified against the final enrolled text and any accompanying fiscal notes or committee amendments for precise figures.
