§ 40-28. Initial resolution, application and allocation of revenue; municipal participation.

(a)

Initial resolution; fund generally. The initial resolution adopted by the county levying the tax shall be adopted not more than 30 days after approval by the board of county commissioners. The initial resolution shall set the effective date of the tax which shall not be more than 30 days after adoption of the initial resolution and shall further state the purpose of the tax to be the construction of an addition to the public auditorium, or of additional facilities adjacent to the public auditorium, in the nature of a convention center, for conventions, exhibitions, meetings or similar large gatherings. Revenue from this tax shall be credited to a county fund entitled "The Auditorium Fund," under the jurisdiction of the county mayor, and all such expenditures therefrom shall be for the stated purposes as provided in the county resolution levying the tax.

(b)

Capital expenditures by county; allocation of revenue. If capital expenditures for construction of such facilities are made by the county alone, the revenue from this tax shall be applied and allocated as follows:

(1)

First application of revenue. The revenue from such tax shall first be applied to payment of all bonded indebtedness, principal and interest and the expenses of the bond sale incurred by the county for construction of such facilities.

(2)

Reimbursement to county. The revenue from this tax shall thereafter be applied to reimburse the county in full for any and all capital expenditures by the county for construction of such facilities, made or financed by means other than bonded indebtedness, including, but not limited to capital expenditures from general revenue, sinking fund for capital improvements and contributions in kind of real or personal property.

(c)

Municipal participation; allocation of revenue. If a municipality within the county shall participate jointly with the county in the contribution of capital expenditures for construction of such facilities, the revenue from this tax shall be applied and allocated as follows:

(1)

First application of revenue. The revenue from such tax shall first be applied to payment of bonded indebtedness, principal and interest including expenses of the bond sale, incurred by both the county and the municipality, or by either of them, for construction of such facilities, and such revenue shall be allocated between the county and the municipality in such amounts necessary to meet the fiscal debt service requirements each year of both if there are sufficient funds. Such allocation shall be based upon actual bonded indebtedness incurred for such purpose, without deduction or offset due to any grant, credit or benefit which either government entity may be entitled by law to receive in connection with or as a result of such capital expenditures, such as but not limited to any grant, credit or benefit accruing under provisions of federal housing and urban renewal statutes.

(2)

Payments to municipality. The county mayor under whose jurisdiction shall be the auditorium fund as provided herein shall, excluding the first year in which this tax shall be levied and beginning June 30 of each year subsequent thereto or as soon as practicable thereafter but in no event more than 90 days, calculate and pay over to the municipality that amount due each municipality from the proceeds of this tax levy during that fiscal year currently ending. Revenue derived from the levy of this tax during the first year in which the tax is levied shall be carried over for use in the next ensuing fiscal year in the payment of the allocable amounts to the county and the municipality in accordance with the provisions of this section where applicable.

a.

If at the close of any fiscal year, the revenue from such tax shall not be sufficient to meet the total debt service of both the county and the municipality for bonded indebtedness incurred for construction of such facilities, the available revenue from this tax shall be allocated between the county and the municipality in the same direct proportion as such bonded indebtedness of each bears to the total of such bonded indebtedness of both, calculated upon the basis of the total principal amount of all such bonds which have been issued by the county and the municipality at any time prior to the close of that fiscal year, provided further, that the balance, if any, of such debt service of either the county or the municipality not paid by revenue of this tax at the end of each fiscal year shall be accumulated by each in a separate account (hereinafter referred to as "deficit account") which shall bear simple interest at the same rate as the bonds issued by such governmental entity for construction of such facilities.

b.

If the revenue from such tax in any fiscal year exceeds the total of such debt service requirements for that year, such surplus revenue thus accruing may be retained by the county mayor as a sinking fund for such future debt service requirements, or such surplus may be applied to the reduction of the deficit accounts of the county and the municipality in the same proportion as provided in subsection (c)(2)a. of this section.

c.

If the total bonded indebtedness incurred for construction of such facilities by either the county or the municipality shall become paid in full as to bond principal and interest, including expenses of the bond sale, and some portion of such bonded indebtedness of one governmental entity remains unpaid, then that governmental entity whose bonded indebtedness has been satisfied in full shall cease, for the time being, to share in the revenue of this tax, and the total revenue from this tax shall be applied toward payment of such outstanding bonded indebtedness of the other governmental entity. For purposes of this subsection only, the bonded indebtedness of either the county or the municipality shall be considered paid in full whenever the bonded indebtedness obligation to the holders of such obligation shall have been satisfied in full, even though such obligations may have been paid in part from sources other than the revenue from this tax.

(3)

Allocation when all bonded indebtedness is paid. Upon the total of such bonded indebtedness of both the county and the municipality being paid in full, principal and interest, including expenses of the bond sale, then the revenue from this tax, together with any surplus revenue accumulated in accordance with subsection (c)(2)b. of this section, shall next be applied to the county and the municipal accumulated deficit accounts as provided in subsection (c)(2)a. of this section. For purposes of this subsection only, the revenue and surplus, if any, shall be allocated between the county and the municipality in the same direct proportion that such deficit account of each bears to the total of such deficit accounts of both governmental entities. Upon one of such governmental entities being reimbursed in full, both principal and interest on such deficit account, with a balance of the deficit account of the other governmental entity remaining unreimbursed, then the total revenue from this tax shall, for the time being, be applied to reimbursement of the deficit account of that governmental entity whose account remains unpaid.

(4)

Allocation when all deficit accounts are reimbursed. When both the county and the municipality shall have been reimbursed in full, principal and interest for such deficit accounts, in accordance with subsection (c)(3) of this section, then the revenue from this tax shall next be applied to reimburse both the county and the municipality for capital expenditures for construction of such facilities made from sources other than the proceeds of bonded indebtedness, including but not limited to, capital expenditures made from general revenues, sinking funds for capital improvements, and contributions in kind of real or personal property. For purposes of this subsection only, the revenue from this tax, together with and including any surplus in the auditorium fund, if any, shall be allocated 50 percent to the county and 50 percent to the municipality. When either of such governmental entities shall be reimbursed in full for all of such capital expenditures for construction of such facilities, then the total revenue from this tax shall be applied to reimbursement of the other governmental entity for such capital expenditures.

(d)

Effect when bonds paid in full. At the later of:

(1)

Such time as the original issue of bonds issued to finance the construction of the Cook Convention Center and any bonds issued in accordance with subsections (h) and (i) of this section shall become paid in full as to both principal and interest; and

(2)

June 30, 2015;

the taxing resolution shall be repealed and the tax shall no longer be levied; provided further that any funds remaining in the auditorium fund, after all obligations imposed under the provisions of this Act shall have been fulfilled, shall be paid into a trust fund restricted to those uses in subsections (f) through (i) of this section.

(e)

Construction of facilities. The county is authorized to pledge the revenue from this tax or any part thereof in payment of any bonds issued under any bond act for construction of such facilities. Any municipality participating in the capital expenditure for construction of such facilities is authorized to pledge its right to receive any funds from the county as provided in this article, in payment of any bonds issued by such municipality under any municipal bond act for construction of such facilities.

(f)

Funding of convention center/visitors bureau. Notwithstanding any of the provisions contained herein to the contrary, any revenues produced from this tax over and above that amount which is required for each year's debt service on the existing and outstanding bonded indebtedness incurred by the city and the county for the construction of the existing Cook Convention Center, shall be used to provide funding for the convention and visitors bureau or such successor agency which deals with the promotion of tourism in Memphis and Shelby County. Subject to the availability of funds, the convention and visitors bureau or its successor agency shall receive an amount of $3,300,000.00 for fiscal year 1995-1996; provided further, that subject to the availability of funds, the amount of such funding shall increase by five percent per annum for each fiscal year thereafter until the tax provided for herein shall no longer be levied.

(g)

Use of excess revenues. Subject to the restrictions and conditions set forth in this article, the Memphis City Council and the board of county commissioners may appropriate all excess revenues derived from the levy of the tax provided for herein for the funding of the convention and visitors bureau or its successor agency.

(h)

Payment of bonded indebtedness. If there are excess revenues remaining after each year's debt service on the existing and outstanding bonded indebtedness incurred by the city and the county for the construction of the existing Cook Convention Center and after funds have been provided to the convention and visitors bureau or its successor agency as prescribed in subsection (f) of this section, then such excess revenues shall be applied to payment of bonded indebtedness (issued after January 1, 1995), principal and interest including expenses of the bond sale, in aggregate principal amount of not exceeding $11,500,000.00 incurred by the county for construction of improvements to the Pyramid Arena. Such payment shall be based upon actual bonded indebtedness incurred for such purpose, without deduction or offset due to any grant, credit or benefit which the county may be entitled by law to receive in connection with or as a result of such capital expenditures, such as but not limited to any grant, credit or benefit accruing under provisions of federal housing and urban renewal statutes.

(i)

Additional uses of excess revenues. If there are excess revenues remaining after each year's debt service on the existing and outstanding bonded indebtedness incurred by the city and the county for the construction of the existing Cook Convention Center, after funds have been provided to the convention and visitors bureau or its successor agency as prescribed in subsection (f) of this section, and after each year's debt service on the existing and outstanding bonded indebtedness (issued after January 1, 1995), in aggregate principal amount of not exceeding $11,500,000.00, incurred by the county for construction of improvements to the Pyramid Arena as prescribed in subsection (h) of this section, such funds shall be used for one of the following purposes or any combination thereof:

(1)

To fund the payment of any capital improvement project expenditures relative to the existing Cook Convention Center and Auditorium that have been made by the city and the county in the past, present or the future including, but not limited to, debt service, interest, and pro rata issuance costs which are additional to the construction costs;

(2)

To provide additional funding for the convention and visitors bureau or its successor agency;

(3)

To fund the operating deficit, if any, of the existing Cook Convention Center and Auditorium; or

(4)

To the payment of bonded indebtedness, principal and interest including expenses of the bond sale, incurred by the city and county, or by either of them for construction or modification of a sports facility as designated by the mayor of Memphis and the Memphis City Council and the mayor of Shelby County and the Shelby County Board of County Commissioners.

(Code 1992, § 27-80; Priv. Acts 1969, ch. 131, § 10; Priv. Acts 1987, ch. 85, §§ 1, 2; Priv. Acts 1995, ch. 74, §§ 1—4; Priv. Acts 2001, ch. 57, § 1)