[Angela Russell]

Dear Fellow Commissioners.
Following is the most recent version of the Hotel Occupancy Tax Ordinance after the workshop on 01/29/2026. Please note that there was not enough time at the 01/29/2026 workshop to fully work through items 9, 10, and 11. I suggested changes to Commissioner Fox’s version for items 9 & 10 but Commissioner Fox wanted time to consider more in depth. We did not have enough time to discuss Commissioner Fox’s item 11 on 01/29/2026 so we will need to allow time for Commissioner Fox to address at the final workshop.

Unfortunately, this forum format does not allow correct alignment, etc. I will email the 01/29/2026 workshop version also. I would like to schedule the final workshop for 02/17/2026 following the optional agenda review meeting or 02/25/2026 at 1:30. Please let me know as soon as possible if one of the days does not work for you. I will need to invite Director Holden and the law department.

ORDINANCE
AN ORDINANCE OF THE COMMISSION
OF KNOX COUNTY, TENNESSEE,
AMENDING THE KNOX COUNTY CODE,
CHAPTER 58, ARTICLE III, SECTION
58-92 REGARDING DISBURSEMENT OF
COUNTY FUNDS LEVIED THROUGH
THE HOTEL OCCUPANCY TAX.
(Ord. No. O-91-11-101, adopted 1-27-92
and Ord. No. O-02-6-102, adopted 7-22-02)

ORDINANCE O-26-??-100

REQUESTED BY: COMMISSIONER RUSSELL
COMMISSIONER FOX

PREPARED BY: COMMISSIONER RUSSELL
COMMISSIONER FOX

APPROVED AS TO FORM AND
NOT AS TO CONTENT: ____________________
DIRECTOR OF LAW

APPROVED 1ST READING: ________________
DATE

APPROVED 2ND READING: ________________
DATE

APPROVED EMERGENCY: _______________
(YES)(NO)

VETOED: ___________________________________
DATE

VETO OVERRIDE: _______________________
DATE

MINUTE BOOK _________PAGE ___________

WHEREAS, Chapter 58, Article III, Section 58-92 of the Knox County Code currently provides appropriation, grant and funding contract procedures for allocation of the hotel occupancy tax, otherwise known as the hotel/motel tax fund; and,

WHEREAS, Knox County is experiencing significant budget and debt challenges, and taxpayer resources must be allocated with great circumspection; and,

WHEREAS, Knox County owes its residents and taxpayers the highest standard of fiscal responsibility regarding stewardship of taxpayer resources; and,

WHEREAS, transparency in allocation and expenditure of taxpayer’s resources must apply to all areas of the county budget, including organizations that receive tax dollars from the county; and,

WHEREAS, in the Knox County fiscal year 2026 budget nonprofit entities received $12,000,000 through the hotel/motel tax fund; and,

WHEREAS, Knox County should review and conduct due diligence of financial records of a nonprofit entity that receives taxpayer resources, to ensure that the resources are being utilized properly

NOW THEREFORE BE IT ORDAINED BY THE COMMISSION OF KNOX COUNTY AS FOLLOWS:

Section 1. The Knox County Code, Chapter 58, Article III, Section 58-92, entitled “Appropriation, grant and funding contract procedures,” is hereby amended by replacing subsection (a) to read as follows:

(a) Any person or organization requesting the receipt funds generated by the provisions of this article shall submit an application in such form as may be prescribed by the mayor, subject to the minimum requirements provided herein. Such form shall include, without limitation, all information required by general state law relating to the appropriation of funds for the financial aid of any nonprofit, charitable, or civic organization. Attached to the submission of an application shall be:

1 Copy of its corporate Charter, Bylaws, and similar corporate documents.
2 Copy of IRS letter evidencing organization is a nonprofit, tax-exempt organization.
3 Copy of the most recent filed year IRS 990 tax return.
4 Salary information for organization’s chief officer and next highest paid employee.
5 Disclosure of any potential staff or board member conflicts of interest.
6 Statement of nature and extent of program of organization which serves residents of Knox County, and how county funds will be used.
7 Financial budget in generally accepted accounting form of organization, including detailed accounting of expenditures budgeted to be paid by organization from funds it anticipates receiving from Knox County.
8 Financial statements in generally accepted accounting form of organization, including a copy of organization’s prior year’s external audit showing a clean unqualified opinion.
9 Detailed accounting of expenditures paid by organization from funds it received from Knox County during previous fiscal year, if applicable. Remove and replace with: #1 below.
10 Summary and source of funding for administration costs and all other programs or initiatives sponsored or undertaken by the organization, but funded through other sources, so that the citizens of Knox County may be fully apprised of the financial status of each nonprofit organization. Remove and replace with: Detailed list of other government, civic organization, or non-profit funding. Summarized list of total funds received from taxable entities (corporations, partnerships, etc.) and individuals.
11 Sworn statement from the executive director of the organization subject to penalty of perjury, affirming:
1)that no funds of the organization are used to benefit any person or persons residing in, staying in, or visiting Knox County while in violation of United States immigration laws (including but not limited to 8 USC § 1182, §1227, §1324, §1325, and §1326);
2)practices are in place to make sure no organization funds are used for the benefit of such person or persons described in subparagraph (k)(1). This item was not discussed.
12 Such other information, as may be required code of ordinances or law.

Applications will not be considered eligible for funding based on the following:

1 No organization’s application will be considered eligible if a detailed accounting of expenditures paid by the organization from the funds it received from Knox County during the previous fiscal year is not on file with Knox County, if applicable.
2 No organization whose expenditures include funding other nonprofit, charitable, or civic organizations.

These documents must be received by the county mayor 90 days prior to inclusion in the Knox County Budget. The county mayor shall review applications and approve funding amounts to be included in the proposed Knox County budget. Any applications and accompanying documentation filed with the county mayor shall be available for review by the county commission.

Upon recommendation by the county mayor, an application shall be reviewed by the county director of finance and the county law director as to form, substance, and compliance with the provisions of this article. In reporting on all applications received and reviewed during the preparation of the annual budget of the county, the director of finance shall prepare and submit for review a fiscal note describing the total funding requirements of all applications presented to the director of finance, including therewith the recommendation of the county mayor, along with anticipated revenues available for such funding.

Additionally, those applications and accompanying documentation recommended by the county mayor shall be presented to the county commission by the county mayor no later than 30 days before presenting the budget at large, accompanied by a fiscal note describing the impact upon available and anticipated revenues generated pursuant to this article, as well as an accounting of the cumulative impact upon such available or anticipated revenues of the funds generated pursuant to this article.

Section 2. The Knox County Code, Chapter 58, Article III, Section 58-92, entitled “Appropriation, grant and funding contract procedures,” part (b), is hereby amended by replacing subsection (b) to read as follows:

(b) Upon completion of the review by the director of finance and the county law director of any application for funding pursuant to the provisions of this article, the application, recommendations, and other review prepared by the county director of finance shall be made available to the county commission no later than 30 days before presentation of the budget by the county mayor to the county commission. No request for funding pursuant to this article shall be considered by the county commission without the review, reports, and recommendations/resolutions mandated herein.

Upon approval of the Knox County Budget, any organization approved for funding pursuant to this article must sign a contractual agreement with the county and ensure compliance with all stated terms and conditions; including, providing Knox County’s internal audit department access to all financial, operational, and compliance records, and implementation of any recommendations and/or requirements that the internal audit department deems necessary.

Section 3. The Knox County Code, Chapter 58, Article III, Section 58-92, entitled “Appropriation, grant and funding contract procedures,” part (d), is hereby amended by deleting subsection (d).

Section 4. This Ordinance shall take effect as provided by the Charter of Knox County, Tennessee, the public welfare requiring it.

_________________________________________
Presiding Officer of the Commission Date

_________________________________________
County Clerk Date

Approved: ________________________________
County Mayor Date

Vetoed: __________________________________
County Mayor Date

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