GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

S	1 

SENATE BILL 29

Short Title:  Local Gasoline Sales Tax for Roads.	(Public)
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Sponsors: Senator Johnson of Cabarrus.
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Referred to:  Local Government.
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January 19, 1989

A BILL TO BE ENTITLED
AN ACT TO AUTHORIZE COUNTIES AND CERTAIN CITIES TO LEVY LOCAL SALES AND USE TAXES ON GASOLINE IF THESE TAXES ARE APPROVED BY THE VOTERS, TO REQUIRE THAT THE TAX REVENUE FROM THESE TAXES BE USED TO BUILD AND MAINTAIN STREETS IN THE CITY AND ACQUIRE RIGHTS-OF-WAY IN THE COUNTY FROM WHICH THE TAXES WERE COLLECTED, AND TO GRANT CITIES AND COUNTIES ADDITIONAL POWERS WITH RESPECT TO ACQUISITION OF RIGHTS-OF-WAY.
The General Assembly of North Carolina enacts:
Section 1.  Subchapter VIII of Chapter 105 of the General Statutes is amended by adding the following new Articles to read:
"Article 43.
"County Sales and Use
Taxes on Motor Fuel.
"§ 105-510.  Purpose of Article.
This Article provides the counties of this State with a means to obtain revenue to acquire rights-of-way for proposed street construction and improvement projects by giving them the authority to levy sales and use taxes on motor fuel and by requiring that the revenue from these taxes be used for purchasing rights-of-way in the county.
"§ 105-511.  Definitions.
The definitions in Article 5 of this Chapter apply to this Article.  In addition, the following definitions apply to this Article:
(1)	Motor Fuel.  Defined in G.S. 105-430.
(2)	Street.  Defined in G.S. 20-4.01(46).
"§ 105-512.  Levy and collection of county taxes.
The board of county commissioners of a county may, by resolution, levy county sales and use taxes on motor fuel, not to exceed four percent (4%) of the sales price of the motor fuel, if the voters of the county approve the taxes in a referendum on the issue.  These taxes may be levied even though motor fuel is exempt from State sales and use taxes and from local sales and use taxes levied under Articles 39, 40, 41, or 42 of this Chapter.  These taxes are in addition to the excise tax on motor fuel levied by Article 36 of this Chapter.  Taxes levied under this Article shall be collected by the Secretary.  
	In collecting the tax from the purchaser, the retailer shall cause the tax to be added to the sales or cost price at the motor fuel pump.
	Except as provided in this Article, the adoption, levy, collection, distribution, administration, and repeal of these taxes shall be in accordance with the procedures in Article 39 of this Chapter for local sales and use taxes.  In applying the provisions of Article 39 of this Chapter to this Article, references to ‘this Article' mean Article 43 of Chapter 105.
"§ 105-513.  Form of ballot.
(a)	Levy.  The form of the question to be presented on a ballot for a special election concerning the levy of taxes authorized by this Article shall be:  ‘FOR (X) percent (X%) county sales and use taxes on gasoline, to be used to acquire rights-of-way for streets in the county' or ‘AGAINST (X) percent (X%) local sales and use taxes on gasoline, to be used to acquire rights-of-way for streets in the county'.
	(b)	Repeal.  The form of the question to be presented on a ballot for a special election concerning the repeal of any taxes levied pursuant to this Article shall be:  ‘FOR repeal of the (X) percent (X%) county sales and use taxes on gasoline' or ‘AGAINST repeal of the (X) percent (X%) county sales and use taxes on gasoline'.
"§ 105-514.  Retail collection bracket.
The following bracket applies to collections by retailers in a county that levies two percent (2%) sales and use taxes on motor fuel under this Article:
(1)	No amount on sales of less than 10¢;
(2)	1¢ on sales of 10¢ through 55¢;
(3)	2¢ on sales of 56¢ through $1.05;
(4)	Sales of over $1.06- straight two percent (2%) with major fractions governing.
The retail collection bracket in G.S. 105-164.10 applies to retailers in a county that levies three percent (3%) sales and use taxes on motor fuel under this Article, and the retail collection bracket in G.S. 105-470 applies to retailers in a county that levies four percent (4%) sales and use taxes on motor fuel under this Article.  If a county levies a tax under this Article at a rate other than two percent (2%), three percent (3%), or four percent (4%), the Secretary shall establish a retail collection bracket for the tax.
"§ 105-515.  Distribution and use of additional taxes.
The Secretary shall, on a quarterly basis, distribute to each taxing county under this Article the net proceeds of the taxes collected under this Article during the preceding quarter from that county.  Amounts distributed to a county under this section may be used only for the acquisition of rights-of-way for proposed street construction or improvement projects.
"Article 44.
"City Sales and Use
Taxes on Motor Fuel.
"§ 105-516.  Purpose of Article.
This Article provides the cities of this State whose population exceeds 500 with a means to obtain revenue to build and maintain streets by giving them the authority to levy sales and use taxes on motor fuel and by requiring that the revenue from these taxes be used for streets in the city.
"§ 105-517.  Definitions.
The definitions in Article 5 of this Chapter apply to this Article.  In addition, the following definitions apply to this Article:
(1)	City.  A city, as defined in G.S. 153A-1(1), whose population exceeds 500 people, as determined by the most recent annual population estimates certified by the State Budget Officer.
(2)	Motor Fuel.  Defined in G.S. 105-430.
(3)	Street.  Defined in G.S. 20-4.01(46).
"§ 105-518.  Levy and collection of city taxes.
The governing body of a city may, by resolution, levy city sales and use taxes on motor fuel, not to exceed four percent (4%) of the sales price of the motor fuel, if the voters of the city approve the taxes in a referendum on the issue.  These taxes may be levied even though motor fuel is exempt from State sales and use taxes and from local sales and use taxes levied under Articles 39, 40, 41, or 42 of this Chapter.  These taxes are in addition to the excise tax on motor fuel levied by Article 36 of this Chapter.  Taxes levied under this Article shall be collected by the Secretary.
	In collecting the tax from the purchaser, the retailer shall cause the tax to be added to the sales or cost price at the motor fuel pump.
	Except as provided in this Article, the adoption, levy, collection, distribution, administration, and repeal of these taxes shall be in accordance with the procedures in Article 39 of this Chapter for local sales and use taxes.  In applying the provisions of Article 39 of this Chapter to this Article, references to ‘this Article' mean Article 43 of Chapter 105.
"§ 105-519.  Form of ballot.
(a)	Levy.  The form of the question to be presented on a ballot for a special election concerning the levy of taxes authorized by this Article shall be:  ‘FOR (X) percent (X%) city sales and use taxes on gasoline, to be used to build and maintain streets in the city' or ‘AGAINST (X) percent (X%) local sales and use taxes on gasoline, to be used to build and maintain streets in the city'.
	(b)	Repeal.  The form of the question to be presented on a ballot for a special election concerning the repeal of any taxes levied pursuant to this Article shall be:  ‘FOR repeal of the (X) percent (X%) city sales and use taxes on gasoline' or ‘AGAINST repeal of the (X) percent (X%) city sales and use taxes on gasoline'.
"§ 105-520.  Retail collection bracket.
The following bracket applies to collections by retailers in a city that levies two percent (2%) sales and use taxes on motor fuel under this Article:
(1)	No amount on sales of less than 10¢;
(2)	1¢ on sales of 10¢ through 55¢;
(3)	2¢ on sales of 56¢ through $1.05;
(4)	Sales of over $1.06- straight two percent (2%) with major fractions governing.
The retail collection bracket in G.S. 105-164.10 applies to retailers in a city that levies three percent (3%) sales and use taxes on motor fuel under this Article, and the retail collection bracket in G.S. 105-470 applies to retailers in a city that levies four percent (4%) sales and use taxes on motor fuel under this Article.  If a city levies a tax under this Article at a rate other than two percent (2%), three percent (3%), or four percent (4%), or if the city rate when combined with the county rate is at a rate other than two percent (2%), three percent (3%), or four percent (4%), the Secretary shall establish a retail collection bracket for the tax.
"§ 105-521.  Distribution and use of additional taxes.
(a)	The Secretary shall, on a quarterly basis, allocate to each taxing city under this Article the net proceeds of the taxes collected under this Article during the preceding quarter from that city.  The Secretary shall distribute to each city the amount allocated to it reduced by the city's budget factor calculated in subsection (b).  If the city's budget factor is greater than one, the Secretary shall distribute the city's entire allocation to the city.  Amounts distributed to a city under this section may be used by the city only for streets.  Amounts allocated to a city but not distributed to the city because the city's budget factor was less than one shall be transferred, on a quarterly basis, to the Highway Fund.
	(b)	The Secretary shall, on an annual basis, calculate for each taxing city under this Article a budget factor to be used to determine the amount of the tax proceeds to be distributed to the city pursuant to subsection (a).  The budget factor shall be a fraction, the numerator of which is the percentage of the city's revenue, other than proceeds received under this section, appropriated for streets during the immediately preceding fiscal year and the denominator of which is the average of the percentages of the city's revenue appropriated for streets during the five fiscal years immediately preceding the city's levy of a tax under this Article.
"§ 105-522.  Effect of city tax on county tax.
If a city levies a tax on motor fuel under this Article, and the county in which the city is located has previously levied or subsequently adopts a resolution levying a sales tax on motor fuel in the county, the tax levied by the county does not apply in the city as of the effective date of the city levy unless the county tax rate exceeds the city tax rate.  If the county tax rate exceeds the city tax rate, the county sales and use taxes on motor fuel shall continue to apply in the city, but the county tax rate in the city shall be the difference between the county tax rate and the city tax rate.
	When both city and county taxes are in effect in a city, the net proceeds of the revenue from the city tax shall be used distributed to the city and the net proceeds of the revenue from the county tax shall be distributed to the county."
Sec. 2.  G.S. 136-98 reads as rewritten:
"§ 136-98. Prohibition of and bonds and construction of roads by local authorities; existing contracts.
From and after the first day of July, 1931, no county or road district by authority of any public, public-local, or private act shall issue or sell or enter into any contract to issue or sell any bonds heretofore authorized to be issued and sold, but unissued and unsold, for the purpose of obtaining money with which to improve, maintain, reconstruct, or construct roads, except for the purpose of discharging obligations entered into prior to the ratification of this section, and all acts authorizing the board of county commissioners, the county highway commissions, district highway or township commissions, to issue and sell bonds for the purpose aforesaid, are hereby amended so as to conform to this section. No board of county commissioners nor county highway commission, nor district nor township highway commission from and after the passage of this section shall enter into any contract to build or construct roads in the various and several counties except for such projects as can be completed and paid for prior to July 1, 1931. All contracts heretofore entered into by any county through the  board of county commissioners, county highway commission, and all contracts heretofore entered into by any district or township highway commission which shall be incomplete on July 1, 1931, shall be taken over by the Department of Transportation and completed by the Department of Transportation by the use of money and funds applicable thereto, by the terms of the said contracts. Nothing in this section or in any section of Chapter 145 of the Public Laws of 1931 that may appear in this Code shall be construed to prohibit the levying of taxes authorized by law for the payment of interest or principal on outstanding bonds or other evidences of debt lawfully issued. Any county or road district which has heretofore issued bonds or other evidences of debt by authority of law for road improvement purposes may refund said bonds or other evidences of debt under and pursuant to the laws of the State of North Carolina relative thereto."
Sec. 3.  Chapter 136 of the General Statutes is amended by adding a new section to read:
"§ 136-66.8.  City right-of-way power.
In order for a city to acquire rights-of-way outside its corporate limits for street or sidewalk construction and to construct the streets or sidewalks or for a county to jointly fund with the city that acquisition and construction, the comprehensive plan provided for in G.S. 136-66.2 must also be adopted by the Board of County Commissioners of the county where the land or interest in the land to be acquired or the street or sidewalk to be constructed is located."
Sec. 4.  G.S.136-66.3(a) reads as rewritten:
"(a)	Except as otherwise authorized by this Article, no municipality shall participate in the cost of any State highway system improvement project approved by the Board of Transportation under G.S. 143B-350(f)(4).  No municipality shall be required to contribute to the right-of-way and construction costs of any State highway system improvement approved by the Board of Transportation under G.S. 143B-350(f)(4), nor shall the Department of Transportation accept any participation, directly or indirectly, from a municipality except as authorized by this Article.  Any such agreement may, with the approval of the county where the land is located, provide for that county to provide funds to the city to acquire rights-of-way necessary for such project or projects."
Sec. 5.  G.S. 136-66.3(b) reads as rewritten:
"(b)	The restrictions imposed by this section on participation by municipalities in the implementation of improvements on the State highway system shall not apply to those improvements approved by the Board of Transportation which are financed by funds allocated by the General Assembly for the ‘Small Urban Construction Program'.  The municipalities may, but shall not be required to, participate in the right-of-way and construction cost of ‘Small Urban Construction Program' highway improvements.  Whenever a county and municipality jointly agree under G.S. 160A-297.1 that the county will fund acquisition of rights-of-way for a State highway system street improvement project, the Department of Transportation may reimburse the county or the municipality in whole or in part for expenditures made by the county or municipality to acquire or fund the acquisition of the right-of-way."
Sec. 6.  G.S. 136-66.3(e) reads as rewritten:
"(e)	A municipality may pursuant to an agreement with the Department of Transportation reimburse the Department of Transportation for the cost of all improvements, including additional right-of-way, for a street or highway improvement project approved by the Board of Transportation under G.S. 143B-350(f)(4) that are in addition to those improvements that the Department of Transportation would normally include in the project.  Any agreement under subsection (a) of this section or under G.S. 136-66.8 which includes the county as a party may only be amended with respect to the role of the county with the consent of that county."
Sec. 7.  G.S. 153A-149(c) reads as rewritten:
"(c)	Each county may levy property taxes for one or more of the purposes listed in this subsection up to an effective combined rate of one dollar and fifty cents ($1.50) on the one hundred dollars ($100.00) appraised value of property subject to taxation before the application of any assessment ratio. To find the actual rate limit for a particular county, divide the effective rate limit of one dollar and fifty cents ($1.50) by the county assessment ratio. Authorized purposes subject to the rate limitation are:
(1)	To provide for the general administration of the county through the board of county commissioners, the office of the county manager, the office of the county budget officer, the office of the county finance officer, the office of the county assessor, the office of the county tax collector, the county purchasing agent, and the county attorney, and for all other general administrative costs not allocated to a particular board, commission, office, agency, or activity of  the county.
(2)	Agricultural Extension. – To provide for the county's share  of the cost of maintaining and administering programs and services offered to agriculture by or through the Agricultural Extension Service or other agencies.
(3)	Air Pollution. – To maintain and administer air pollution control programs.
(4)	Airports. – To establish and maintain airports and related aeronautical facilities.
(5)	Ambulance Service. – To provide ambulance services, rescue squads, and other emergency medical services.
(6)	Animal Protection and Control. – To provide animal protection and control programs.
(6a)	Arts Programs and Museums. – To provide for arts programs and museums as authorized in G.S. 160A-488.
(6b)	Auditoriums, coliseums, and convention and civic centers. – To provide public auditoriums, coliseums, and convention and civic centers.
(7)	Beach Erosion and Natural Disasters. – To provide for shoreline protection, beach erosion control, and flood and hurricane protection.
(8)	Cemeteries. – To provide for cemeteries.
(9)	Civil Preparedness. – To provide for civil preparedness programs.
(10)	Debts and Judgments. – To pay and discharge any valid debt of the county or any judgment lodged against it, other than debts and judgments evidenced by or based on bonds and notes.
(10a)	Defense of Employees and Officers. – To provide for the defense of, and payment of civil judgments against, employees and officers or former employees and officers, as authorized by this Chapter.
(10b)	Economic Development. – To provide for economic development as authorized by G.S. 158-12.
(11)	Fire Protection. – To provide fire protection services and  fire prevention programs.
(12)	Forest Protection. – To provide forest management and protection programs.
(13)	Health. – To provide for the county's share of maintaining  and administering services offered by or through the county or district health department.
(14)	Historic Preservation. – To undertake historic preservation programs and projects.
(15)	Hospitals. – To establish, support and maintain public hospitals and clinics, and other related health programs and facility, or to aid any private, nonprofit hospital, clinic,  related facilities, or other health program or facility.
(15a)	Housing Rehabilitation. – To provide for personnel costs related to planning and administration of housing rehabilitation programs authorized by G.S. 153A-376.  This subdivision only applies to counties with a population of 400,000 or more, according to the most recent decennial federal census.
(16)	Human Relations. – To undertake human relations programs.
(16a)	Industrial Development. – To provide for industrial development as authorized by G.S. 158-7.1.
(17)	Joint Undertakings. – To cooperate with any other county, city, or political subdivision in providing any of the functions, services, or activities listed in this subsection.
(18)	Law Enforcement. – To provide for the operation of the office of the sheriff of the county and for any other county  law-enforcement agency not under the sheriff's jurisdiction.
(19)	Libraries. – To establish and maintain public libraries.
(20)	Mapping. – To provide for mapping the lands of the county.
(21)	Medical Examiner. – To provide for the county medical examiner or coroner.
(22)	Mental Health. – To provide for the county's share of the cost of maintaining and administering services offered by or  through the area mental health, mental retardation, and substance abuse authority.
(23)	Open Space. – To acquire open space land and easements in accordance with Article 19, Part 4, Chapter 160A of the General Statutes.
(24)	Parking. – To provide off-street lots and garages for the parking and storage of motor vehicles.
(25)	Parks and Recreation. – To establish, support and maintain public parks and programs of supervised recreation.
(26)	Planning. – To provide for a program of planning and regulation of development in accordance with Article 18 of this Chapter and Article 19, Parts 3A and 6, of Chapter 160A of the General Statutes.
(27)	Ports and Harbors. – To participate in programs with the North Carolina Ports Authority and provide for harbor masters.
(28)	Register of Deeds. – To provide for the operation of the office of the register of deeds of the county.
(29)	Sewage. – To provide sewage collection and treatment services as defined in G.S. 153A-274(2).
(30)	Social Services. – To provide for the public welfare through the maintenance and administration of public assistance programs not required by Chapters 108A and 111 of the General Statutes, and by establishing and maintaining a county home.
(31)	Solid Waste. – To provide solid waste collection and disposal services, and to acquire and operate landfills.
(32)	Surveyor. – To provide for a county surveyor.
(33)	Veterans' Service Officer. – To provide for the county's share of the cost of services offered by or through the county veterans' service officer.
(34)	Water. – To provide water supply and distribution systems.
(35)	Watershed Improvement. – To undertake watershed improvement projects.
(36)	Water Resources. – To participate in federal water resources development projects.
(37)	Armories. – To supplement available State or federal funds to be used for the construction (including the acquisition of land), enlargement or repair of armory facilities for the North Carolina National Guard.
(38)	Rights-of-Way.  To carry out an agreement with a city whereby the city or the State acquires rights-of-ways for streets as provided by G.S. 153A-245."
Sec. 8.  Chapter 153A of the General Statutes is amended by adding a new section to read:
"§ 153A-245.  County expenditures on rights-of-way.
Counties may expend funds not otherwise limited as to use by law for the purpose of jointly participating with a city in the acquisition of rights-of-way for street construction or improvement projects which have been approved for county participation under G.S. 160A-297.1, G.S. 136-66.8 and G.S. 136-66.3(a).  This section shall not be construed to authorize counties to acquire rights-of-way for State highways by purchase or condemnation."
Sec. 9.  G.S. 159-48(c) reads as rewritten:
	"(c) Each county is authorized to borrow money and issue its bonds under this Article in evidence thereof for the purpose of, in the case of subdivisions (1) to (4), inclusive, paying any capital costs of any one or more of the purposes mentioned therein and, in the case of the remaining subdivisions  (5), to finance the cost thereof:
(1)	Providing community college and technical institute facilities, including without limitation buildings, plants, and other facilities, physical and vocational educational buildings and facilities, including in connection therewith classrooms, laboratories, libraries, auditoriums, administrative offices, student unions, dormitories, gymnasiums, athletic fields, cafeterias, utility plants, and garages.
(2)	Providing courthouses, including without limitation offices,  meeting rooms, court facilities and rooms, and detention facilities.
(3)	Providing county homes for the indigent and infirm.
(4)	Providing school facilities, including without limitation schoolhouses, buildings, plants and other facilities, physical and vocational educational buildings and facilities, including in connection therewith classrooms, laboratories, libraries, auditoriums, administrative offices, gymnasiums, athletic fields, lunchrooms, utility plants, garages, and school buses and other necessary vehicles.
(4a)	Providing improvements to subdivision and residential streets pursuant to G.S. 153A-205.
(5)	Providing for the octennial revaluation of real property for taxation.
(6)	Appropriating funds to carry out an agreement with a city whereby the city or the State acquires rights-of-way for streets pursuant to G.S. 153A-245."
Sec. 10.  Chapter 160A of the General Statutes is amended by adding a new section to read:
"§ 160A-297.1.  Joint city-county funding and acquisition.
A city and county may jointly agree that the county will fund acquisition of rights-of-way for a State highway system street improvement project."
Sec. 11.  This act is effective upon ratification.