GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

S	2 

SENATE BILL 290*
Transportation Committee Substitute Adopted 3/23/89

Short Title:  North Carolina Highway Trust Fund.	(Public)
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Sponsors:
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Referred to:  
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February 27, 1989

A BILL TO BE ENTITLED
AN ACT TO CREATE THE NORTH CAROLINA TRUST FUND AND TO DESIGNATE THE FUNDING SOURCES FOR THE FUNDS AND PURPOSES FOR THE FUND AND TO PROVIDE FOR INCREASED REVENUES FOR OTHER HIGHWAY PROGRAMS.
The General Assembly of North Carolina enacts:
Section 1.  Chapter 136 of the General Statutes is amended by adding a new Article to read:
“ARTICLE 14.
"North Carolina Highway Trust Fund.
"§ 136-175.  North Carolina Highway Trust Fund; created.
There is created a special account within the State Treasury to be known as the ‘North Carolina Highway Trust Fund'.  The Trust Fund shall contain the proceeds from the sources designated by this Article and the Trust Fund is continuously appropriated for the purposes designated by this Article.
"§ 136-176.  North Carolina Highway Trust Fund; purposes.
The Trust Fund shall be used:
(1)	For the planning, design, and construction of the projects of the North Carolina Intrastate System specifically described in G.S. 136-178.
(2)	For the planning, design and construction of the projects of the Urban Loops described in G.S. 136-179.
(3)	For a supplement to secondary road construction as described in G.S. 136-180.
(4)	For a supplement to the Transportation Improvement Program.
Funds from the North Carolina Highway Trust Fund may be substituted on a dollar-for-dollar basis with funds from the Federal Aid Construction Program.
"§ 136-177.  North Carolina Highway Trust Fund; sources.
The Trust Fund shall receive all funds generated by:
(1)	The three cents (3¢) per gallon tax on motor fuel authorized by Section 2 of this act and collected pursuant to Articles 36, 36A, and 36B of Chapter 105 of the General Statutes.
(2)	Two-thirds (2/3) of the net proceeds of the three percent (3%) use tax on motor vehicles authorized by Section 8 of this act.
(3)	The nine percent (9%) of the net revenue of the Highway Fund transferred to the North Carolina Highway Trust Fund pursuant to G.S. 136-182.
"§ 136-178.  North Carolina Intrastate System.
Sixty and five one-hundredths percent (60.05%) of the Trust Fund shall be used to plan, design and construct the North Carolina Intrastate System, hereinafter referred to in this Article as the ‘Intrastate System'.  The Intrastate System is a network of major multi-lane arterial highways established to provide a high level of travel service (speed, safety and mobility) throughout the State, and serves to connect major population centers both inside and outside the State to provide safe, convenient, through travel for motorists.  The Intrastate System is designed to support statewide growth and development objectives and connect to major highways of adjoining states.  Designed for high speed travel, these corridors shall have access control determined by travel service and economic considerations.  The entire Intrastate System shall be under construction no later than  2001.
The Intrastate System Construction Program consists of the following:

Route	Description	Affected Counties
I-40	Widening

I-77	Widening

I-85	Widening

I-95 	Widening

US-64	Complete 4-laning from	Edgecombe, Pitt,
Raleigh to Coast	Martin, Washington,
Tyrrell, Dare

US-264	Complete 4-laning from	Wilson, Greene,
US-64 to Washington	Pitt
(including Wilson and
Greenville Bypasses)

US-70	Complete 4-laning from	Wake, Johnston,
Raleigh to Morehead City	Wayne, Lenoir,
(including Clayton,	Craven
Goldsboro, Kinston,
Smithfield-Selma, and
Havelock Bypasses)

NC-24	Complete 4-laning from	Mecklenburg,
Charlotte to Morehead 	Cabarrus, Stanly,
City	Montgomery, Moore,
Harnett, Cumberland,
Sampson, Duplin,
Onslow, Carteret

US-74	Complete 4-laning from	Mecklenburg, Union,
Charlotte to US-17	Richmond, Robeson,
(including multi-laning	Columbus
of Independence Blvd. in
Charlotte, and Bypasses
of Monroe, Rockingham,
and Hamlet)

US-74	Complete 4-laning from	Polk, Rutherford
I-26 to I-85

US-158	Complete 4-laning	Forsyth, Guilford,
from Winston-Salem	Rockingham, Caswell,
to Whalebone	Person, Granville,
Vance, Warren,
Halifax,
Northampton, Gates,
Hertford,
Pasquotank, Camden,
Currituck, Dare

New bridge over	Currituck
Currituck Sound

US-64	Complete 4-laning from	Davidson, Randolph,
Lexington to Raleigh	Chatham, Wake

US-421	Complete 4-laning from	Watauga, Wilkes,
Tennessee Line to I-40	Yadkin

US-421	Complete 4-laning from	Chatham, Lee
Greensboro to Sanford
(including Bypass of
Sanford)

NC-87	Complete 4-laning from	Lee, Harnett,
Sanford to US-74	Cumberland, Bladen,
Columbus

US-13	Connector from I-95	Cumberland
to NC-87

US-19/	Complete 4-laning from	Madison, Yancey,
US-19E	US-23 to NC 194 in	Mitchell, Avery
Ingalls

NC-194	Complete 4-laning from	Avery
US-19E to US-221

US-19	Complete 4-laning	Cherokee, Macon,
Swain

US-23-441	Complete 4-laning from	Macon
US-19/US-74 to Georgia
Line

US-23	Complete 4-laning and	Madison, Buncombe
upgrading existing
4-lanes from Tennessee
Line to I-240

NC-105	Complete 4-laning from	Watauga, Avery
Boone to Linville

US-221	Complete 4-laning from	Avery, McDowell,
Linville to South 	Rutherford
Carolina

US-321	Complete 4-laning from	Caldwell, Catawba,
Boone to South Carolina	Lincoln, Gaston
Line

US-52	Complete 4-laning from	Surry, Davidson
I-77 to Lexington
(including new I-77
Connector)

US-220/NC-68	Complete 4-laning from	Rockingham, Guilford
	Virginia Line to I-40

US-220	Complete 4-laning from	Guilford, Randolph,
I-40 to the inter-	Montgomery, Richmond
section with US-1

US-1	Complete 4-laning from	Vance, Franklin,
Henderson to South	Wake, Chatham, Lee,
Carolina Line	Moore, Richmond
(including 6-laning of
Raleigh Beltline)

US-13	Complete 4-laning from	Gates, Hertford,
Virginia Line to US-17	Bertie

US-17	Complete 4-laning from	Camden, Pasquotank,
Virginia Line to South	Perquimans, Chowan,
Carolina Line (including	Bertie, Martin,
Washington, New Bern,	Beaufort, Craven,
and Jacksonville	Jones, Onslow,
Bypasses)	Pender, New Hanover,
	Brunswick

NC-168	Complete multi-laning	Currituck
from Virginia Line
to US-158
"§ 136-179.  Urban loops.
Twenty-four and six one-hundredths percent (24.06%) of the Trust Fund shall be used to plan, design and construct the following projects:

Project	Description	County
Charlotte Outer Loop	Multi-lane facility on	Mecklenburg
	new location encircling
	City of Charlotte.

Raleigh Outer Loop	Multi-lane facility on	Wake
	new location from US 1
	southwest of Cary
northerly to US-64 in
eastern Wake County.

Greensboro Loop	Multi-lane facility on new	Guilford
	location encircling City
	of Greensboro.

Winston-Salem	Multi-lane facility on new	Forsyth
Northbelt	new location from I-40 west
of Winston-Salem northerly
to I-40 in eastern Forsyth
County.

Durham Northern Loop	Multi-lane facility on new	Durham, Orange
	location from I-85 west of
	Durham to US 70 east of
	Durham.

Asheville Western	Multi-lane facility on new	Buncombe
Loop	location from I-26 west of
Asheville to US-19/23
north of Asheville.

Wilmington Bypass	Multi-lane facility on new	New Hanover
location from US-17
northeast of Wilmington
to the US-17 southwest
of Wilmington.
"§ 136-180.  Secondary roads.
Six and one-half percent (6.5%) of the Trust Fund shall be used to supplement the regular secondary road appropriations to each county, on a pro rata basis, so as to pave by 1999 all secondary roads with a traffic vehicular equivalent of 50 vehicles per day, at which time the supplemental funding will be discontinued.  All funds shall be allocated solely based upon the ratio of the number of miles of unpaved secondary road mileage with traffic vehicular equivalent of 50 vehicles per day within a county bear to the total number of State-maintained unpaved secondary road miles with traffic vehicular equivalent of 50 vehicles per day.
"§ 136-181.  Transportation Improvement Program.
	Nine and thirty-nine one-hundredths percent (9.39%) of the Trust Fund shall be used to supplement the Transportation Improvement Program and the planning, design, and construction of the Intrastate System.
"§ 136-182.  Continuation funding of Trust Fund.
	Except to the extent needed to satisfy any current obligation of all outstanding bonded indebtedness pursuant to any pertinent Bond Act, within 30 days after the end of each calendar quarter, beginning with the calendar quarter ending September 30, 1989, the State Treasurer shall transfer from the Highway Fund and deposit to the credit of the North Carolina Highway Trust Fund, a sum equal to nine percent (9%) of net revenue credited to the Highway Fund during the immediately preceding quarter including the net proceeds of revenues from taxes on motor fuels collected pursuant to Articles 36, 36A, and 36B of Chapter 105 of the General Statutes, and the motor vehicle registration fees and other revenues collected pursuant to Chapter 20 of the General Statutes, including interest or income received and accruing on the State Highway Fund by reason of these revenues.  These transfers shall be made from the Highway Fund prior to the availability of these funds for any other appropriation.  The sums transferred pursuant to this section shall constitute recurring annual appropriations.
"§ 136-183.  North Carolina Highway Trust Fund Oversight Committee.
	(a)	There is created the North Carolina Highway Trust Fund Oversight Committee.  The members of this Committee shall be:
(1)	The Chairman of the Transportation Committee of the Senate.
(2)	The Vice-Chairman of the Transportation Committee of the Senate.
(3)	The Ranking Minority Member of the Transportation Committee of the Senate.
(4)	The Chairman of the Finance Committee of the Senate.
(5)	The Chairman of the Appropriations Committee of the Senate.
(6)	The Chairman of the Base Budget Committee of the Senate.
(7)	The Chairman of the Infrastructure Committee of the House of Representatives.
(8)	The Chairman of the Highways Subcommittee of the Infrastructure Committee of the House of Representatives.
(9)	The Chairman of the Finance Committee of the House of Representatives.
(10)	The Chairman of the Highway Fund Subcommittee of the Finance Committee of the House of Representatives.
(11)	The Chairman of the Appropriations Committee of the House of Representatives.
(12)	The Chairman of the Highway Fund Subcommittee of the Appropriations Committee of the House of Representatives.
The Chairmanship of the Oversight Committee shall alternate annually between the Chairman of the Senate Transportation Committee and the Chairman of the Highway Subcommittee of the Infrastructure Committee of the House of Representatives.
	(b)	The Committee shall meet at least quarterly to review reports prepared by the Department of Transportation relating to the matters contained in this Article.
	The Committee shall:
(1)	Monitor the collections and expenditures to the North Carolina Highway Trust Fund.
(2)	Insure that the funds are spent in accordance with the provisions of this Article.
(3)	Recommend to the General Assembly any revisions needed in the programs established by this Article based on funds available to the North Carolina Highway Trust Fund.
	(c)	The Committee shall prepare reports to be submitted to the 1991 General Assembly, the 1995 General Assembly, and the 1999 General Assembly, containing any necessary legislation needed to facilitate the construction of the projects authorized by this Article.
	(d)	The Committee, while in the discharge of official duties, may exercise all the powers provided for under the provisions of G.S. 120-19, and G.S. 120-19.1 through G.S. 120-19.4.  The Committee may meet at any time upon the call of the Chairman.  The Committee may meet in the Legislative Building or the Legislative Office Building.
	(e)  Members of the Committee shall receive subsistence and travel expenses at the rates set forth in G.S. 120-3.1.
	(f)  The Committee may contract for professional, clerical, or consultant services as provided by G.S. 120-32.02.  The Legislative Services Commission, through the Legislative Administrative Officer, shall assign professional staff to assist in the work of the Committee. The House of Representatives' and the Senate's Supervisor of Clerks shall assign clerical staff to the Committee, upon the direction of the Legislative Services Commission.  The expenses relating to clerical employees shall be borne by the Committee.
	(g)  All State departments and agencies and local governments and their subdivisions shall furnish the Committee with any information in their possession or available to them.
	(h)  The Committee shall be funded from funds available to the Legislative Services Commission.
(i)	The President Pro-Tempore of the Senate may appoint an additional member of the Oversight Committee, to maintain numerical balance, when a member of the Senate holds more than one position listed in subsection (a) of this section."
Sec. 2.  G.S. 105-434(a) reads as rewritten:
"(a)	Tax. – An excise tax is levied on motor fuel sold, distributed, or used by a distributor within this State at the rate of seventeen cents (17¢) per gallon plus seven percent (7%) of the average wholesale price of motor fuel, but no less than the equivalent of three and one-half cents (3 1/2¢) per gallon of the average wholesale price of motor fuel, as determined semiannually by the Secretary of Revenue from information on refiner and gas plant operator sales prices of finished motor gasoline and No. 2 diesel fuel for resale, published by the United States Department of Energy in the ‘Monthly Energy Review,' or on equivalent data. The Secretary shall determine the average wholesale price of motor fuel by computing the average sales price of finished motor gasoline for the base period, computing the average sales price for No. 2 diesel fuel for the base period, and then computing a weighted average of the results of the first two computations based on the proportion of tax collected under this Article on motor fuel and Article 36A on fuel for the base period. The Secretary shall notify affected taxpayers of the tax rate to be in effect for each six-month period.
To facilitate collection of the motor fuel tax, the Secretary shall convert the percentage rate to a cents-per-gallon rate to be in effect during the six-month period beginning each January 1 and July 1. The rate to be in effect during the six-month period beginning January 1 shall be computed from data published for the six-month base period ending on the preceding September 30, and the rate to be in effect during the six-month period beginning July 1 shall be computed from data published for the six-month base period ending on the preceding March 31. The cents-per-gallon rate computed by the Secretary shall be rounded to the nearest one-tenth of a cent (1/10¢). If the cents-per-gallon rate computed by the Secretary is exactly between two tenths of a cent, the rate shall be rounded up to the higher of the two."
Sec. 3.  G.S. 105-446 reads as rewritten:
"§ 105-446.  Refund of motor fuel used other than to propel a motor vehicle.
A person who purchases and uses motor fuel for a purpose other than to operate a licensed motor vehicle may receive an annual refund, for the tax paid during the preceding calendar year, at a rate equal to seventeen cents (17¢) per gallon plus the average of the two wholesale cents-per-gallon rates of tax in effect during the year for which refund is claimed, less one cent (1¢) per gallon. An application for a refund allowed under this section shall be made in accordance with G.S. 105-440."
Sec. 4.  G.S. 105-446.1 reads as rewritten:
"§ 105-446.1.  Refunds of taxes paid by counties and municipalities.
The following entities shall be entitled to reimbursement for the tax levied by G.S. 105-434 upon filing a statement in writing with the Secretary of Revenue, which statement shall be made upon the oath or affirmation of the chief executive officer of said entity, showing the number of gallons of fuel purchased and used by said entity on which the tax levied by G.S. 105-434 has been paid: the Department of Transportation, counties, municipal corporations, volunteer fire departments, county fire departments, volunteer rescue squads, and ‘sheltered workshop' organizations recognized and approved by the  Department of Human Resources. ‘Chief executive officer' shall mean the Secretary of the North Carolina Department of Transportation, the mayor, city manager or other municipal officer designated by the governing body of the municipality, the chairman of the board of county commissioners or other county officer designated by the board of county commissioners, or the president or other duly designated officer or agent of a volunteer fire department, county fire department, volunteer rescue squad or ‘sheltered workshop' organization. Reimbursement shall be at a rate equal to seventeen cents (17¢) per gallon plus the wholesale cents-per-gallon rate of tax in effect during the quarter for which the refund is claimed, less one cent (1¢) per gallon. An application for a refund under this section shall be made in accordance with G.S. 105-440."
Sec. 5.  G.S. 105-446.3.(a) reads as rewritten:
"(a)	Any person, association, firm or corporation, who shall purchase any motor fuels, as defined in this Article, for the purpose of use, and the same is actually used, in the operation of motor buses transporting fare-paying passengers, in connection with a city transit system or in the operation of a taxicab transporting fare-paying passengers, both as hereinafter defined in subsection (b) of this section, or in the operation, by private nonprofit organizations, of motor vehicles transporting passengers under contract with or at the express designation of units of local government (such transportation above and hereinafter referred to as private nonprofit  transportation services) shall be entitled to reimbursement for the tax levied by this Article upon filing with the Secretary of Revenue an application upon the oath or affirmation of the applicant or his agent showing the number of gallons of motor fuel so purchased and used. Reimbursement shall be at a rate equal to seventeen cents (17¢) per gallon plus the wholesale cents-per-gallon rate of tax in effect during the quarter for which the refund is claimed, less one cent (1¢) per gallon. An application for a refund allowed under this section shall be made in accordance with G.S. 105-440."
Sec. 5.1.  G.S. 105-446.5(a) reads as rewritten:
"(a)	Refund. – A person who purchases and uses motor fuel in one of the vehicles listed below may receive a refund for the amount of fuel consumed by the vehicle:
(1)	A concrete mixing vehicle;
(2)	A solid waste compacting vehicle;
(3)	A bulk feed vehicle that delivers feed to poultry or livestock and uses a power take-off to unload the feed; and
(4)	A vehicle that delivers lime or fertilizer in bulk to farms and uses a power take-off to unload the lime or fertilizer.
	The refund rate shall be computed by subtracting one cent (1¢) from seventeen cents (17¢) per gallon plus the average of the two wholesale  cents-per-gallon rates of tax in effect during the year for which the refund is claimed, and multiplying the difference by thirty-three and one-third percent (33 1/3%). An application for a refund allowed under this section shall be made in accordance with G.S. 105-440. This refund is allowed for the amount of fuel consumed by the vehicle in its mixing, compacting, or unloading operations, as distinguished from propelling the vehicle, which amount is considered to be one third of the amount of fuel consumed by the vehicle."
Sec. 5.2.  G.S. 105-446.6 reads as rewritten:
"§ 105-446.6. Refund on taxpaid motor fuel transported to another state.
Upon application to the Secretary, any person, association or corporation who purchases motor fuel upon which the tax imposed by this Article has been paid, and who transports the fuel to another state for sale or use in that state may be reimbursed at a rate equal to seventeen cents (17¢) per gallon plus the wholesale cents-per-gallon rate of tax paid on the fuel, less one cent (1¢) per gallon. The refund application shall require the claimant to furnish evidence satisfactory to the Secretary that the motor fuel for which the refund is claimed has been reported for taxation in the state to which it was transported. As used in this section, to ‘transport' means to carry motor fuel in a cargo tank, tank car, barge or barrel and does not include carrying fuel in a tank connected with or attached to the engine of a motor vehicle."
Sec. 6.  G.S. 136-41.1(a) reads as rewritten:
"(a)	There is hereby annually appropriated out of the State Highway Fund a sum equal to nine percent (9%) of the annual net revenues paid into the State Highway Fund to be allocated in cash on or before October 1 of each year to the cities and towns of the State in accordance with the following formula:
Seventy-five percent (75%) of said funds shall be distributed among the several eligible municipalities of the State in the percentage proportion that the population of each eligible municipality bears to the total population of all eligible municipalities according to the most recent annual estimates of population as certified to the Secretary of Revenue by the State Budget Officer. This annual estimation of population shall include increases in the population within the municipalities caused by annexations accomplished through July 1 of the calendar year in which these funds are distributed. Twenty-five percent (25%) of said fund shall be distributed among the several eligible municipalities of the State in the percentage proportion that the mileage of public streets in each eligible municipality which does not form a part of the State highway system bears to the total mileage of the public streets in all eligible municipalities which do not constitute a part of the State highway system.
It shall be the duty of the mayor of each municipality to report to the Department of Transportation such information as it may request for its guidance in determining the eligibility of each municipality to receive funds by virtue of G.S. 136-41.1 and 136-41.2 and in determining the amount of allocation to which each is entitled. Upon failure of any municipality to make such report within the time prescribed by the Department of Transportation, the Department of Transportation may disregard such defaulting unit in making said allotment.
The funds to be allocated under this section shall be paid in cash to the various eligible municipalities on or before October 1 each year after March 15, 1951. Provided that eligible municipalities are authorized within the discretion of their governing bodies to enter into contracts for the purpose of maintenance, repair, construction, reconstruction, widening, or improving streets of such municipalities at any time after January 1 of any calendar year in total amounts not to exceed ninety percent (90%) of the amount received by such municipality during the preceding fiscal year, in anticipation of the receipt of funds under this section during the next fiscal year, to be paid for out of such funds when received.
No allocation to cities and towns shall be made under the provisions of this section from the one cent (1¢) per gallon additional tax on gasoline imposed by Chapter 46 of the Session Laws of 1965, unless and until said additional one cent (1¢) per gallon tax produces funds which are not needed for or committed by said Chapter 46 of the Session Laws of 1965, to the payment of the principal of or the interest on the secondary road bonds issued pursuant to the provisions of said Chapter 46 of the Session Laws of 1965. The Department of Transportation is hereby authorized to withhold each year an amount not to exceed one percent (1%) of the total amount appropriated in G.S. 136-41.1 for the purpose of correcting errors in allocations: Provided, that the amount so withheld and not used for correcting errors will be carried over and added to the amount to be allocated for the following year.
The word ‘street' as used in this section is hereby defined as any  public road maintained by a municipality and open to use by the general public, and having an average width of not less than 16 feet. In order to obtain the necessary information to distribute the funds herein allocated, the Department of Transportation may require that each municipality eligible to receive funds under G.S. 136-41.1 and 136-41.2 submit to it a statement, certified by a registered engineer or surveyor of the total number of miles of streets in such municipality. The Department of Transportation may in its discretion require the certification of mileage on a biennial basis."
Sec. 7.  G.S. 136-44.2A reads as rewritten:
"§ 136-44.2A.  Secondary road construction.
There shall be annually allocated out of the State Highway Fund to the Department of Transportation for secondary road construction programs developed pursuant to G.S. 136-44.7 and 136-44.8, a sum equal to that allocation made under G.S. 136-41.1(a). The sum of sixty-eight million six hundred seventy thousand dollars ($68,670,000) allocated to secondary road construction shall be distributed in accordance with the provisions of G.S. 136-44.5.  All funds for secondary road construction in excess of sixty-eight million six hundred seventy thousand dollars ($68,670,000) shall be allocated solely based upon the ratio of the number of miles of unpaved secondary road mileage with traffic vehicular equivalent of 50 vehicles per day within a county bear to the total number of State-maintained unpaved secondary road miles with traffic vehicular equivalent of 50 vehicles per day. The Department of Transportation shall report, on or before April 1 of each year, to the General Assembly, and to the Fiscal Research Division of the Legislative Services Commission, the number of secondary roads with a traffic vehicular equivalent of 50 vehicles per day statewide, the number of secondary roads with a traffic vehicular equivalent of 50 vehicles per day in each county, and the number of secondary roads with a traffic vehicular equivalent of 50 vehicles per day paved pursuant to this section."
Sec. 8.  G.S. 105-164.6 is amended by adding a new subdivision to read:
"(9)	Notwithstanding any other provision of law, there is hereby levied and imposed, in addition to all other taxes of every kind imposed by law, a use tax of three percent (3%) on the sales price of motor vehicles to be collected upon the sale or transfer of the motor vehicles in this State.  For purposes of this section ‘motor vehicle' means any vehicle which is self-propelled and designed primarily for use on the highways, any vehicle which is propelled by a self-propelled vehicle, but shall not include any implement of husbandry, farm tractor, road construction or maintenance machinery, special mobile equipment as defined in G.S. 20-4.01, any manufactured/mobile homes while titled for transport on the highways, or any vehicle designed primarily for use in work off the highway.  For purposes of this section, ‘sales price' means the total amount for which the motor vehicle was sold including charges that are a part of the sale valued in money whether paid in money or otherwise.  The three percent (3%) use tax shall not apply, but instead a minimum tax of twenty-five dollars ($25.00) shall apply, to transfers between spouses and between parents and children in which there is no exchange of anything of value except the motor vehicle; to court ordered or approved transfers in divorces, estate settlements, and other legal actions; and when it is impossible, because of a limited market or the unique quality of the motor vehicle, to determine the value of the particular motor vehicle.  This use tax shall be collected by the Department of Revenue using the procedures established for collection of use taxes, in general, and the administrative interpretations made by the Secretary of Revenue with respect to the North Carolina Sales and Use Tax Act, to the extent not inconsistent with the provisions of this subdivision, may be uniformly applied in the construction, interpretation, and implementation of this subdivision.  The net proceeds of this use tax shall be transferred, at least monthly: two-thirds (2/3) to the North Carolina Highway Trust Fund and one-third (1/3) to the General Fund."
Sec. 8.1.  G.S. 105-164.4. reads as rewritten:
"§ 105-164.4.  Imposition of tax; retailer.
There is hereby levied and imposed, in addition to all other taxes of every kind now imposed by law, a privilege or license tax upon every person who engages in the business of selling tangible personal property at retail, renting or furnishing tangible personal property or the renting and furnishing of rooms, lodgings and accommodations to transients, in this State, the same to be collected and the amount to be determined by the application of the following rates against gross sales and rentals, to wit:
(1)	At the rate of three percent (3%) of the sales price of each item or article of tangible property when sold at retail in this State, the tax to be computed on total net taxable sales as defined herein but for the purpose of computing the amount due the State each and every taxable retail sale, or retail sales upon which the tax has been collected, or the amount of tax actually collected, whichever be greater and whether or not erroneously collected, shall be included in the computation of tax due the State. Provided, however, that in the case of the sale of any aircraft, railway locomotive, railway car or the sale of any taxable motor vehicle or boat, the tax shall be only at the rate of two percent (2%) of the sales price, but at no time shall the maximum tax with respect to any one such aircraft, railway locomotive, railway car or taxable motor vehicle or boat, including all accessories attached thereto at the time of delivery thereof to the purchaser, be in excess of three hundred dollars ($300.00).
		The separate sale of a new taxable motor vehicle chassis and a new taxable motor vehicle body to be installed thereon, whether by the same retailer or by different retailers shall be subject only to the tax herein prescribed with respect to a single taxable motor vehicle. No tax shall be imposed upon a body mounted on the chassis of a taxable motor vehicle which temporarily enters the State for the purpose of having such body mounted thereon by the manufacturer thereof.
		Notwithstanding G.S. 105-164.3(16) and regardless whether the seller is a retailer of taxable motor vehicles, the sales price of a taxable motor vehicle is the gross sales price of the taxable motor vehicle less any allowance given for a taxable motor vehicle taken in trade as part of the consideration for the purchased taxable motor vehicle.
		The tax levied under this section applies to all retail sales of taxable motor vehicles regardless whether the seller is engaged in business as a retailer of taxable motor vehicles or whether a tax on the sale of the vehicle has previously been  paid under this Article. A purchaser of a taxable motor vehicle from a retailer shall pay the tax imposed under this Article to the retailer, who is liable for collecting and remitting the tax to the Secretary. A purchaser of a motor vehicle is liable for payment of the tax imposed by this Article if the seller is not a retailer. The purchaser shall pay the tax to the Commissioner of Motor Vehicles when applying for a certificate of title for the vehicle. When property is transferred by an individual to a partnership or corporation, and no gain or loss arises as provided by Section 351 or Section 721 of the Code, such transfer is not a sale for the purpose of this subdivision if the transfer is incident to the organization of the partnership or corporation.
		When applying for a certificate of title, a purchaser of a motor vehicle from a seller who is not a retailer shall certify in writing the sales price of the purchased  motor vehicle. A purchaser who knowingly makes a false certification of the sales price is guilty of a misdemeanor.
		The Commissioner of Motor Vehicles may not issue a certificate of title for a motor vehicle sold by a seller who is not a retailer unless the tax imposed by this section is paid when the purchaser of the vehicle applies for a certificate of title. The Commissioner shall remit taxes collected by him under this subsection to the Secretary.
		Persons who lease or rent motor vehicles shall collect and remit the tax imposed by this Article on the separate retail sale of a motor vehicle in addition to the tax imposed on the proceeds from the lease or rental of the motor vehicle.
		Provided further, the tax shall be only at the rate of one percent (1%) of the sales price on the following items:
	a. 	Horses or mules by whomsoever sold.
	b.	Semen to be used in the artificial insemination of animals.
c.	Sales of fuel, other than electricity or piped natural gas, to farmers to be used by them for any farm purposes other than preparing food, heating dwellings and other household purposes. The quantity of fuel purchased or used at any one time shall not in any manner be a determinative factor as to whether any sale or use of fuel is or is not subject to the one percent (1%) rate of tax imposed herein.
	d.	Sales of fuel, other than electricity or piped natural gas, to manufacturing industries and manufacturing plants for use in connection with the operation of such industries and plants other than sales of fuels to be used for residential heating purposes. The quantity of fuel purchased or used at any one time shall not in any manner be a determinative factor as to whether any sale or use of fuel is or is not subject to the one percent (1%) rate of tax imposed herein.
	e.	Sales of fuel, other than electricity or piped natural gas, to commercial laundries or to pressing and dry-cleaning establishments for use in machinery used in the direct performance of the laundering or the pressing and  cleaning service.
	f.	Sales to freezer locker plants of wrapping paper, cartons and supplies consumed directly in the operation of such plant.
		Provided further, the tax shall be only at the rate of one percent (1%) of the sales price, subject to a maximum tax of eighty dollars ($80.00) per article, on the following items:
	g.	Sales of machines and machinery, whether animal or motor drawn or operated, and parts and accessories for such machines and machinery to farmers for use by them in the planting, cultivating, harvesting or curing of farm crops, and sales of machines and machinery and parts and accessories for such machines and machinery to dairy operators, poultry farmers, egg producers, and livestock farmers for use by them in the production of dairy products, poultry, eggs or livestock, except such machines, machinery, equipment, parts, and accessories that come within the provisions of G.S. 105-164.13(4c).
		The term ‘machines and machinery' as used in this subdivision is defined as follows:
		The term shall include all vehicular implements, designed and sold for any use defined in this subdivision, which are operated, drawn or propelled by motor or animal power, but shall not include vehicular implements which are operated wholly by hand, and shall not include any motor vehicles required to be registered under Chapter 20 of the General Statutes.
		The term shall include all nonvehicular implements and mechanical devices designed and sold for any use defined in this subdivision, which have moving parts, or which require the use of any motor or animal power, fuel, or electricity in their operation but shall not include nonvehicular implements which have no moving parts and are operated wholly by hand.
		The term shall also include metal flues sold for use in curing tobacco, whether such flues are attached to handfired furnaces or used in connection with mechanical burners.
	h.	Sales of mill machinery or mill machinery parts and accessories to manufacturing industries and plants, and sales to contractors and subcontractors purchasing mill machinery or mill machinery parts and accessories for use by them in the performance of contracts with manufacturing industries and plants, and sales to subcontractors purchasing mill machinery or mill machinery parts and accessories for use by them in the performance of contracts with general contractors who have contracts with manufacturing industries and plants. As used in this paragraph, the term ‘manufacturing industries and plants' does not include delicatessens, cafes, cafeterias, restaurants, and other similar retailers that are principally engaged in the retail sale of foods prepared by them for consumption on or off their premises.
	i.	Sales of central office equipment and switchboard and private branch exchange equipment to telephone companies regularly engaged in providing telephone service to subscribers on a commercial basis, and sales to these companies of prewritten computer programs used in providing telephone service to their subscribers.
	j.	Sales to commercial laundries or to pressing and dry cleaning establishments of machinery used in the direct performance of the laundering or the pressing and cleaning service and of parts and accessories thereto.
		k.	Sales to freezer locker plants of machinery used in the direct operation of said freezer locker plant and of parts and accessories thereto.
	l.	Sales of broadcasting equipment and parts and accessories thereto and towers to commercial radio and television companies which are under the regulation and supervision of the Federal Communications Commission.
	m.	Sales to farmers of bulk tobacco barns and racks and all parts and accessories thereto and similar apparatus used for the curing and drying of any farm produce.
	n.	Repealed by Session Laws 1987, c. 800, s. 2.
		o.	Sales to farmers of grain, feed or soybean storage facilities and accessories thereto, whether or not dryers are attached, and all similar apparatus and accessories thereto for the storage of grain, feed or soybeans.
		p.	Repealed by Session Laws 1983, c. 805, s. 2, effective July 1, 1983.
		q.	Sales of containers to farmers or producers for use in the planting, producing, harvesting, curing, marketing, packaging, sale, or transporting or delivery of their products when such containers do not go with and become part of the sale of their products at wholesale or retail.
(2)	At the rate of three percent (3%) of the gross proceeds derived from the lease or rental of tangible personal property as defined herein, where the lease or rental of such property is an established business, or the same is incidental or germane to said business; except that whenever a rate of less than three percent (3%) is applicable to a sale of property which is leased or rented, the lower rate of tax shall be due on such lease or rental proceeds.
(3)	Operators of hotels, motels, tourist homes, tourist camps, and similar type businesses and persons who rent private residences and cottages to transients are considered retailers under this Article.  There is levied upon every such retailer a tax of three percent (3%) of the gross receipts derived from the rental of any room or rooms, lodgings, or accommodations furnished to transients for a consideration.  This tax does not apply to any private residence or cottage that is rented for less than 15 days in a calendar year or to any room, lodging, or accommodation supplied to the same person for a period of 90 or more continuous days.
As used in this subdivision, the term ‘persons who rent to transients' means (i)	owners of private residences and cottages who rent to transients and (ii) rental agents, including ‘real estate brokers' as defined in G.S. 93A-2, who rent private residences and cottages to transients on behalf of the owners.  If a rental agent is liable for the tax imposed by this subdivision, the owner is not liable.
(4)	Every person, firm or corporation engaged in the business of operating a pressing club, cleaning plant, hat-blocking establishment, dry-cleaning plant, laundry (including wet or damp wash laundries and businesses known as launderettes and launderalls), or any similar-type business, or engaged in the business of renting clean linen or towels or wearing apparel, or any similar-type business, or engaged  in the business of soliciting cleaning, pressing, hat blocking, laundering or rental business for any of the aforenamed businesses, shall be considered ‘retailers' for the purposes of this Article. There is hereby levied upon every such person, firm or corporation a tax of three percent (3%) of the gross receipts derived from services rendered in  engaging in any of the occupations or businesses named in this subdivision, and every person, firm or corporation subject to the provisions of this subdivision shall register and secure a license in the manner hereinafter provided in this section, and, insofar as practicable, all other provisions of this Article shall be applicable with respect to the tax herein provided for. The tax imposed by this subdivision does not apply to receipts derived from coin or token-operated washing machines, extractors, and dryers.  The taxes levied in this subdivision are additional privilege or license taxes for the privilege of engaging in the occupations or businesses named herein. Any person, firm or corporation engaged in cleaning, pressing, hat blocking, laundering for, or supplying clean linen or towels or wearing apparel to, another person, firm or corporation engaged in soliciting shall not be required to pay the three percent (3%) tax on its gross receipts derived through such solicitor, if the soliciting person, firm or corporation has registered with the Department, secured the license hereinafter required and has paid the tax at the rate of three percent (3%) of the total gross receipts derived from business solicited.
(4a)	At the rate of three percent (3%) of the gross receipts derived by a utility from sales of electricity, piped natural gas, or local telecommunications service as defined by G.S. 105-120(a). A person who operates a utility is considered a retailer under this Article.
(4b)	A person who sells tangible personal property at a flea market, other than his own household personal property, is considered a retailer under this Article.  A tax is levied on that person at the rate of three percent (3%) of the sales price of each article sold by him at the flea market.  A person who leases or rents space at a flea market may not lease or rent this space unless the retailer requesting to rent or lease the space furnishes evidence that he has obtained the license required by this Article.  A person who leases or rents space at a flea market shall keep records of retailers to whom he has leased or rented space at the market.  As used in this subdivision, the term ‘flea market' means a place where space is rented to a person for the purpose of selling tangible personal property.
(4c)	At the rate of six and one-half percent (6 1/2%) of the gross receipts derived from providing toll telecommunications services or private telecommunications services as defined by G.S. 105-120(a) that both originate from and terminate in the State which are not subject to the privilege tax under G.S. 105-120.  Any business entity that provides the service outlined above is considered a retailer under this Article.  This subdivision shall not apply to telephone membership corporations as described in Chapter 117 of the General Statutes.
(5)	The said tax shall be collected from the retailer as defined herein and paid by him at the time and in the manner as hereinafter provided. Provided, however, that any person engaging or continuing in business as a retailer shall pay the tax required on the net taxable sales of such business at the rates specified when proper books are kept showing separately the gross proceeds of taxable and nontaxable sales of tangible personal property in such form as may be accurately and conveniently checked by the Secretary or his duly authorized agent. If such records are not kept separately the tax shall be paid as a retailer on the gross sales of business and the exemptions and exclusions provided by this Article shall not be allowed.
(6)	The tax so levied is and shall be in addition to all other taxes whether levied in the form of excise, license or privilege or other taxes.
(7)	Any person who shall engage or continue in any business for  which a privilege tax is imposed by this Article shall immediately after July 1, 1979, apply for and obtain from the Secretary upon payment of the sum of five dollars ($5.00) a license to engage in and conduct such business upon the condition that such person shall pay the tax accruing to the  State of North Carolina under the provisions of this Article  and he shall thereby be duly licensed and registered to engage in and conduct such business. Except as hereinafter provided, a license issued under this subsection shall be a continuing license until revoked for failure to comply with the provisions of this Article. However, any person who has heretofore applied for and obtained such license, and such license was in force and effect as of July 1, 1979, shall not be required to apply for and obtain a new license.
		Any person who shall cease to be engaged in any business for which a privilege tax is imposed by this Article, and who shall remain continuously out of business for a period of five years shall apply for and obtain a new license from the  Secretary upon the payment of a tax of five dollars ($5.00),  and any license previously issued under this section shall be null, void and of no effect. The burden of proof after such period shall be upon the taxpayer to show that he did engage in such activity within the period, and that no new license is required.
		A retailer who sells tangible personal property at a flea market shall conspicuously display his sales tax license when making sales at the flea market.
		For purposes of this section ‘taxable motor vehicle' means all motor vehicles not subject to the use tax imposed by G.S. 105-164.6(9)."
Sec. 8.2.  G.S. 105-164.6(1) reads as rewritten:
"(1)	At the rate of three percent (3%) of the cost price of each item or article of tangible personal property when the same is not sold but used, consumed, distributed or stored for use or consumption in this State; except that, whenever a rate of less than three percent (3%) is applicable under the sales tax schedule set out in G.S. 105-164.4 to the sale at retail of an item or article of tangible personal property, the same rate, and maximum tax if any, shall be used in computing any use tax due under this subdivision.  The separate sale of a new taxable motor vehicle chassis and a new taxable motor vehicle body to be installed thereon, whether by the same retailer or by different retailers, shall be subject only to the tax herein prescribed with respect to a single taxable motor vehicle.
		For purposes of this subdivision ‘taxable motor vehicle' means any motor vehicle not subject to the use tax imposed by subdivision (9) of this section."
Sec. 9.  Chapter 136 of the General Statutes is amended by adding a new section to read:
"§ 136-184. Distribution Formula.
	The funds for the construction of the program authorized in G.S. 136-178, G.S. 136-181, G.S. 143B-350(f)(4), and exempting G.S. 136-179, shall be distributed in the following manner:
(1)	For purposes of this formula, the State shall be divided into seven Distribution Regions:
a.	Highway Divisions 1 and 4 shall be Distribution Region A.
b.	Highway Divisions 2 and 3 shall be Distribution Region B.
c.	Highway Divisions 5 and 6 shall be Distribution Region C.
d.	Highway Divisions 7 and 9 shall be Distribution Region D.
e.	Highway Divisions 8 and 10 shall be Distribution Region E.
f.	Highway Divisions 11 and 12 shall be Distribution Region F.
g.	Highway Divisions 13 and 14 shall be Highway Distribution Region G.
(2)	The amount of funds available during each seven year period for the construction of Intrastate System Construction Program authorized in G.S. 136-178, G.S. 136-181, G.S. 143B-350(f)(4), and exempting G.S. 136-179, in each Distribution Region shall be determined by multiplying the total amount of the funds available for that seven year period for the construction of these projects by a factor based:  twenty-five percent (25%) on the miles to complete the Intrastate System within the Distribution Region as compared to the miles of the entire Intrastate System; twenty-five percent (25%) on the vehicle miles travelled (VMT) within the Distribution Region as compared to the total VMT for the State; twenty-five percent (25%) on the population of the Distribution Region compared to the total population of the State; and twenty-five percent (25%) on an equal share based on the number of Distribution Regions (14.28%).
(3)	These funds shall be distributed on a seven-year construction program, which shall be updated annually.
(4)	When ninety percent (90%) of the Intrastate System Construction Program is completed, a certified by the Department of Transportation, or in the year 2000, whichever comes first, the distribution formula shall change to be determined by multiplying the total amount of funds available in that fiscal year for the construction of the projects authorized by G.S. 136-178, G.S. 136-181, G.S. 143B-350(f)(4), and exempting G.S. 136-179 by a factor based:  thirty-three and one-third percent (33.3%) on the VMT within the Distribution Region as compared to the total VMT for the State; thirty-three and one-third percent (33.3%) on the population of the Distribution Region as compared to the total population of the State; and thirty-three and one-third percent (33.3%) on an equal share based on the number of Distribution Regions (14.28%).
(5)	Each Distribution Region shall receive within fifteen percent (15%), more or less of received by any other Distribution Region, as determined using the formulae set forth in subdivisions (3) and (4) of this section, in each consecutive seven-year period.
(6)	The miles of the Intrastate System completed, the VMT, and the population figures for the State and each Distribution Region shall be adjusted on July 1, or each year."
Sec. 10.  Chapter 136 of the General Statutes is amended by adding a new section to read:
"§ 136-44.16.  Toll roads authorized.
	The Department of Transportation shall determine on which highways and bridges it is legally and economically feasible to collect tolls and shall report to the General Assembly along with the necessary legislation to implement the collection of the tolls including the creation of a North Carolina Toll Roads Authority to collect the tolls."
Sec. 11.  Notwithstanding any provision of this act, nothing in this act authorizes the appropriation, allocation, or expenditure of any funds.
Sec. 12.  This act is effective upon ratification and the taxes imposed by Sections 2, 3, and 8 of this act shall be collected beginning no later than 60 days after the ratification date of this act.  Except for completion of projects for which funding is available prior to the expiration date of this act, this act shall expire on June 30, 2001.