GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

H	1 

HOUSE BILL 1904

Short Title:  Estimated Tax/Statewide Funds.	(Public)
─────────────────────────────────────── 
Sponsors: Representatives Diamont; Jeralds, Perdue, Locks, and Bowman.
─────────────────────────────────────── 
Referred to:  Appropriations.
─────────────────────────────────────── 

May 10, 1989

A BILL TO BE ENTITLED
AN ACT TO APPROPRIATE FUNDS FOR STATEWIDE PROGRAMS AND TO CONFORM STATE LAW TO A RECENT CHANGE IN THE FEDERAL RULE FOR CALCULATING ESTIMATED INCOME TAX PAYMENTS.
The General Assembly of North Carolina enacts:
H431–PARK IMPROVEMENT FUNDS
Section 1.  There is appropriated from the General Fund to the Department of Natural Resources and Community Development, Parks and Recreation Division, $5,000,000 for the 1989-90 fiscal year to develop and maintain existing parks in the State Parks System.
––-HOUSING REHABILITATION AND DEVELOPMENT FUNDS
Sec. 2.  There is appropriated from the General Fund to the North Carolina Housing Finance Agency $5,000,000 for the 1989-90 fiscal year to be placed in the Housing Trust Fund established in Chapter 122E of the General Statutes.
At least $2,000,000 of these funds shall be used to support the development of self-help housing and the remainder shall be used to support programs of rehabilitation or new construction developed by the North Carolina Housing Partnership pursuant to G.S. 122E-6.
––-VIETNAM VETERANS MEMORIAL FUNDS
Sec. 3.  There is appropriated from the General Fund to the Department of Transportation $600,000 for the 1989-90 fiscal year to establish a Vietnam Veterans Memorial Park on Interstate 85, provided that a local match of a like amount of funds, property, or services is raised to match this appropriation on the basis of $1.00 of non-State funds, property, or services for every $2.00 of State funds.
H1428–ACTIVITY BUS REPLACEMENT FUNDS
Sec. 4.  There is appropriated from the General Fund to the Department of Public Education $3,000,000 for the 1989-90 fiscal year for the replacement of activity buses manufactured prior to April 1, 1977, and for transportation supplies and equipment.  The Department shall establish a formula for allocating these funds into accounts against which local school administrative units may draw an amount of funds that equals the amount of local funds provided for the primary purpose of replacing activity buses manufactured prior to April 1, 1977, that were in actual operation on March 1, 1989.  Each local school administrative unit account shall be funded at a minimum of $16,000 and a maximum of $32,000.  After an administrative unit has replaced all of its pre-1977 activity buses that were in actual operation on March 1, 1989, the unit may use funds remaining in its account to provide transportation supplies and transportation equipment, but for no other purposes.  Administrative units that operate activity vans may request a waiver from the State Board of Education to purchase vans that meet applicable National Transportation Safety Board safety standards.  These units shall match State funds with local funds on the same basis as for activity buses.
It is the intent of the General Assembly that this appropriation be a one-time appropriation for the primary purpose of assisting local school administrative units in the replacement of pre-1977 activity buses that were in actual operation on March 1, 1989, which buses have been found to be unsafe for students.
––-PUBLIC LIBRARY CONSTRUCTION FUNDS
Sec. 5. There is appropriated from the General Fund to the Department of Cultural Resources $2,000,000 for the 1989-90 fiscal year to provide funds for construction grants to public libraries.  A public library may not receive a grant of more than $50,000 under this section.  To obtain a grant under this section, a public library must raise a like amount of non-State funds to match the State funds on a dollar-for-dollar basis.
––-GROUP HOMES FUNDS
Sec. 6.  (a)	There is appropriated from the General Fund to the Department of Human Resources, Division of Mental Health, Mental Retardation, and Substance Abuse Services the sum of $1,430,860 for the 1989-90 fiscal year for the start-up and operation of the HUD 202 Fund Reservation Group Homes for the Mentally Retarded and the sum of $1,542,708 for the 1990-91 fiscal year for the operation of these group homes.
(b)	There is appropriated from the General Fund to the Department of Human Resources, Division of Mental Health, Mental Retardation, and Substance Abuse Services the sum of $867,500 for the 1989-90 fiscal year for the start-up and operation of the HUD 202 Fund Reservation Group Homes for the mentally ill and the sum of $657,292 for the 1990-91 fiscal year for the operation of these group homes.
H862–INFANT MORTALITY PREVENTION FUNDS
Sec. 7.  There is appropriated from the General Fund to the Department of Human Resources, Division of Health Services, $260,000 for the 1989-90 fiscal year for an Infant Mortality Prevention Campaign. The Campaign shall be an educational awareness program, directed at all women of childbearing age, on the importance of early, continuous, and good prenatal care.  The program shall be accomplished through television, radio, and other news media.
H549–ACADEMIC ENHANCEMENT FUNDS
Sec. 8.  There is appropriated from the General Fund to the Board of Governors of The University of North Carolina the sum of $6,000,000 for the 1989-90 fiscal year to be distributed equally to the following constituent institutions and used to supplement the institutions' endowment funds:
(1)	Fayetteville State University.
(2)	Elizabeth City State University.
(3)	North Carolina Central University.
(4)	Winston-Salem State University.
(5)	North Carolina Agricultural and Technical State University.
(6)	Pembroke State University.
––-CONFORM ESTIMATED TAX LAW
Sec. 9.  G.S. 105-163.15 reads as rewritten:
"§ 105-163.15. Failure by individual to pay estimated income tax; penalty.
(a)	In the case of any underpayment of the estimated tax by an individual, there shall be added to the tax imposed under Article 4 for the taxable year an amount determined by applying the applicable annual rate established under G.S. 105-241.1(i) to the amount of the underpayment for the period of the underpayment.
(b)	For purposes of subsection (a), the amount of the underpayment shall be the excess of the required installment, over the amount, if any, of the installment paid on or before the due date for the installment.  The period of the underpayment shall run from the due date for the installment to whichever of the following dates is the earlier: (i) the fifteenth day of the fourth month following the close of the taxable year, or (ii) with respect to any portion of the underpayment, the date on which such portion is paid.  A payment of estimated tax shall be credited against unpaid required installments in the order in which such installments are required to be paid.
(c)	For purposes of this section there shall be four required installments for each taxable year with the time for payment of the installments as follows:
(1)	First installment – April 15 of taxable year;
(2)	Second installment – June 15 of taxable year;
(3)	Third installment – September 15 of taxable year; and
(4)	Fourth installment – January 15 of following taxable year.
(d)	Except as provided in subsection (e), the amount of any required installment shall be twenty-five percent (25%) of the required annual payment.  The term ‘required annual payment' means the lesser of:
(1)	Ninety percent (90%) of the tax shown on the return for the taxable year, or, if no return is filed, ninety percent (90%) of the tax for that year; or
(2)	One hundred percent (100%) of the tax shown on the return of the individual for the preceding taxable year, if the preceding taxable year was a taxable year of 12 months and the individual filed a return for that year.
(e)	In the case of any required installment, if the individual establishes that the annualized income installment is less than the amount determined under subsection (d), the amount of the required installment shall be the annualized income installment, and any reduction in a required installment resulting from the application of this subsection shall be recaptured by increasing the amount of the next required installment determined under subsection (d) by the amount of the reduction and by increasing subsequent required installments to the extent that the reduction has not previously been recaptured.
In the case of any required installment, the annualized income installment is the excess, if any, of (i)	an amount equal to the applicable percentage of the tax for the taxable year computed by placing on an annualized basis the taxable income for months in the taxable year ending before the due date for the installment, over (ii) the aggregate amount of any prior required installments for the taxable year. The taxable income shall be placed on an annualized basis under rules prescribed by the Secretary. The applicable percentages for the required installments are as follows:
(1)	First installment –twenty-two and one-half percent (22.5%);
(2)	Second installment –forty-five percent (45%);
(3)	Third installment –sixty-seven and one-half percent (67.5%); and
(4)	Fourth installment –  ninety percent (90%).
(f)	No addition to the tax shall be imposed under subsection (a) if the tax shown on the return for the taxable year reduced by the tax withheld under Article 4A is less than forty dollars ($40.00) or if the individual did not have any liability for tax under Division II of Article 4 for the preceding taxable year.
(g)	For purposes of this section, the term ‘tax' means the tax imposed by Division II of Article 4 minus the credits against the tax allowed by Article 4.  The amount of the credit allowed under Article 4A for withheld income tax for the taxable year is considered a payment of estimated tax, and an equal part of that amount is considered to have been paid on each due date of the taxable year, unless the taxpayer establishes the dates on which all amounts were actually withheld, in which case the amounts so withheld are considered payments of estimated tax on the dates on which such amounts were actually withheld.
(h)	If, on or before January 31 of the following taxable year, the taxpayer files a return for the taxable year and pays in full the amount computed on the return as payable, no addition to tax shall be imposed under subsection (a) with respect to any underpayment of the fourth required installment for the taxable year.
(i)	Notwithstanding the other provisions of this section, an individual who is a farmer or fisherman for a taxable year is required to make only one installment payment of tax for that year.  This installment is due on or before January 15 of the following taxable year but may be paid without penalty or interest on or before March 1 of that year.  The amount of the installment payment shall be the lesser of:
(1)	Sixty-six and two-thirds percent (66 2/3%) of the tax shown on the return for the taxable year, or, if no return is filed, sixty-six and two-thirds percent (66 2/3%) of the tax for that year; or
(2)	One hundred percent (100%) of the tax shown on the return of the individual for the preceding taxable year, if the preceding taxable year was a taxable year of 12 months and the individual filed a return for that year.
An individual is a farmer or fisherman for any taxable year if the individual's gross income from farming or fishing, including oyster farming, for the taxable year is at least sixty-six and two-thirds percent (66 2/3%) of the total gross income from all sources for the taxable year, or the individual's gross income from farming or fishing, including oyster farming, shown on the return of the individual for the preceding taxable year is at least sixty-six and two-thirds percent (66 2/3%) of the total gross income from all sources shown on the return.
(j)	In applying this section to a taxable year beginning on any date other than January 1, there shall be substituted, for the months specified in this section, the months that correspond thereto.  This section shall be applied to taxable years of less than 12 months in accordance with rules prescribed by the Secretary.
(k)	This section shall not apply to any estate or trust."
––-EFFECTIVE DATE
Sec. 10.  Section 9 of this act is effective for taxable years beginning on or after January 1, 1990.  The remainder of this act is effective upon ratification.