07:31 PM EDT on Thursday, May 26, 2005

Associated Press

RALEIGH — The General Assembly agreed Thursday to allow the Charlotte area to raise its hotel tax to help pay for a proposed NASCAR hall of fame.

Without debate, the House voted 92-18 to give Mecklenburg County the right to raise its occupancy tax from 6 percent to 8 percent.

The tax already has the Senate's approval and now becomes law.

It's designed to generate about half of the money needed for a proposed $137.5 million bid by North Carolina to bring the hall to Charlotte.

Daytona Beach, Fla., Atlanta, Kansas City and Richmond, Va., also are in the running for the hall. NASCAR's bid deadline is May 31.

About $65 million generated by the tax would help finance the museum and a new ballroom for the Charlotte convention center, next to the proposed site.

The hotel tax increase wouldn't be permitted unless NASCAR chose Charlotte. The bill allows the higher hotel tax for as long as the city carries debt incurred by museum construction. The city could refinance the debt for no more than 30 years.

The city also plans to use $37.5 million in existing revenues for the new ballroom and $15 million in private contributions.

Museum boosters had asked the state to donate land as part of the bid, but officials have found out the federal government -- rather than the state -- controls the land.

The state has asked federal highway officials to examine whether Charlotte can use the land without going through years of bureaucracy. Otherwise, boosters may have to ask the General Assembly for $20 million to meet the $137.5 million bid.

As part of the deal, Charlotte would receive about 11 acres near an exit on Interstate 277. The state could redesign the exit to free up some land. Charlotte could then collect additional taxes by letting developers build on it and collect taxes.