GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

H	1 

HOUSE BILL 234

Short Title:  1/2 Cent Local Sales Tax.	(Public)
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Sponsors: Representatives Grimmer, Isenhower; Hurley and Tallent.
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Referred to:  Finance.
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March 11, 1991

A BILL TO BE ENTITLED
AN ACT TO AUTHORIZE AN ADDITIONAL ONE-HALF-CENT LOCAL OPTION SALES TAX AND TO ELIMINATE THE ANNUAL REIMBURSEMENTS TO LOCAL GOVERNMENTS FOR PREVIOUSLY REPEALED LOCAL TAXES.
The General Assembly of North Carolina enacts:
Part I.
One-half-cent Local Option Sales Tax
Section 1.  The title of Article 39 of Chapter 105 of the General Statutes reads as rewritten:
                            "ARTICLE 39.
"One-cent (1¢)  Local Government Sales and Use Tax."
Sec. 2.  G.S. 105-463 reads as rewritten:
"§ 105-463. Short title.
This Article shall be known as the 'One-cent (1¢) Local Government Sales and Use Tax Act.'"
Sec. 3.  The title of Article 40 of Chapter 105 of the General Statutes reads as rewritten:
                            "ARTICLE 40.
" First One-half-cent (1/2¢) Local Government Sales
and Use Tax."
Sec. 4.  G.S. 105-480 reads as rewritten:
"§ 105-480. Short title.
This Article shall be known as the First One-half-cent (1/2¢) Local Government Sales and Use Tax Act."
Sec. 5.  G.S. 105-468.1 and Article 41 of Chapter 105 of the General Statutes are repealed. 
Sec. 6.  The title of Article 42 of Chapter 105 of the General Statutes reads as rewritten:
                            "ARTICLE 42.
" Second One-half-cent (1/2¢) Local 
Government Sales and Use Tax."
Sec. 7.  G.S. 105-495 reads as rewritten:
"§ 105-495. Short title.
This Article shall be known as the Second One-half-cent (1/2¢) Local Government Sales and Use Tax Act."
Sec. 8.  Subchapter VIII of Chapter 105 of the General Statutes is amended by adding a new Article to read:
                            "ARTICLE 43.
"Third One-half-cent (1/2¢) Local Government
Sales and Use Tax.
"§ 105-505. Short title.
This Article shall be known as the Third One-half-cent (1/2¢) Local Government Sales and Use Tax Act.
"§ 105-506. Purpose.
This Article gives the counties and cities of this State an opportunity to obtain an added source of revenue with which to meet their growing financial needs.  It provides all counties of the State that are subject to this Article with authority to levy one-half percent (1/2%) sales and use taxes.
"§ 105-507. Limitations.
This Article applies only to counties that levy the one percent (1%) sales and use tax under Article 39 of this Chapter or under Chapter 1096 of the 1967 Session Laws, the first one-half percent (1/2%) local sales and use tax under Article 40 of this Chapter, and the second one-half percent (1/2%) local sales and use tax under Article 42 of this Chapter.
"§ 105-508. Levy and collection of additional taxes.
A county subject to this Article may levy one-half percent (1/2%) local sales and use taxes in addition to any other State and local sales and use taxes levied pursuant to law.  Except as provided in this Article, the adoption, levy, collection, distribution, administration, and repeal of these additional taxes shall be in accordance with Article 39 of this Chapter.  In applying the provisions of Article 39 of this Chapter to this Article, references to 'this Article' mean 'Article 43 of Chapter 105 of the General Statutes'.
"§ 105-509. Form of ballot.
(a)	The form of the question to be presented on a ballot for a special election concerning the levy of the taxes authorized by this Article shall be: 'FOR one-half percent (1/2%) local sales and use taxes in addition to the current two percent (2%) local sales and use taxes' or 'AGAINST one-half percent (1/2%) local sales and use taxes in addition to the current two percent (2%) local sales and use taxes.'
(b)	The form of the question to be presented on a ballot for a special election concerning the repeal of any additional taxes levied pursuant to this Article shall be: 'FOR repeal of the additional one-half percent (1/2%) local sales and use taxes, thus reducing local sales and use taxes to two percent (2%)' or 'AGAINST repeal of the additional one-half percent (1/2%) local sales and use taxes, thus reducing local sales and use taxes to two percent (2%).'
"§ 105-510. Distribution of additional taxes.
The Secretary shall, on a quarterly basis, distribute the net proceeds of the additional one-half percent (1/2%) sales and use taxes levied under this Article among the taxing counties and the cities located in the taxing counties in proportion to the total amount of funds each county and city received during the 1990-91 fiscal year from the Local Government Tax Reimbursement Reserve created in Section 52 of Chapter 752 of the 1989 Session Laws.  'Net proceeds' means gross proceeds less taxes refunded, the cost to the State of collecting and administering the tax in the taxing county, and other deductions properly charged to the taxing county.  As used in this section, the term 'city' has the same meaning as in G.S. 153A-1(1).
If any taxes levied under this Article by a county have not been collected in that county for a full quarter because of the levy or repeal of the taxes, the Secretary shall distribute a pro rata share to that county and the cities located in that county for that quarter based on the number of months the taxes were collected in that county during the quarter."
Part II.
Repeal Local Reimbursements
Sec. 9.  G.S. 105-213 reads as rewritten:
"§ 105-213.  Appropriation to counties and municipalities; use of appropriation.
(a)	There is annually appropriated from the General Fund to counties and municipalities the amount of revenue collected under this Article during the preceding fiscal year, less an amount equal to the costs during the preceding fiscal year of:
(1)	Refunds made during the fiscal year of taxes levied under this Article.
(2)	The Department of Revenue to collect and administer the taxes levied under this Article.
(3)	The Department of Revenue in performing the duties imposed by Article 15 of this Chapter.
(4)	The Property Tax Commission.
(5)	The Institute of Government in operating a training program in property tax appraisal and assessment.
The appropriation shall be distributed by August 30 of each year.  The appropriation shall be included in the Current Operations Appropriations Act.
To distribute the appropriation, the Secretary of Revenue shall keep a separate record by counties of the taxes collected under this Article and shall certify to the State Controller and to the State Treasurer the amount to be distributed to each county and municipality in the State.  The State Controller shall then issue a warrant on the State Treasurer to each county and municipality in the amount certified.
The Secretary shall allocate the amount appropriated under this Article to the counties according to the county in which the taxes were collected.  The amounts so allocated to each county shall in turn be divided between the county and the municipalities in the county in proportion to the total amount of ad valorem taxes levied by each during the fiscal year preceding the distribution.  For the purpose of computing the distribution of the intangibles tax to any county and the municipalities located in the county for any year with respect to which the property valuation of a public service company is the subject of an appeal pursuant to the provisions of the Machinery Act, or to applicable provisions of federal law, and the Department of Revenue is restrained by operation of law or by a court of competent jurisdiction from certifying such valuation to the county and municipalities therein, the Department shall use the last property valuation of such public service company which has been so certified in order to determine the ad valorem tax levies applicable to such public service company in the county and the municipalities therein.
The chairman of each board of county commissioners and the mayor of each municipality shall report to the Secretary of Revenue information requested by the Secretary to enable the Secretary to distribute the amount appropriated by this section.  If a county or municipality fails to make a requested report within the time allowed, the Secretary may disregard the county or municipality in distributing the amount appropriated by this section.  The amount distributed to each county and municipality shall be used by the county or municipality in proportion to property tax levies made by it for the various funds and activities of the county or municipality, unless the county or municipality has pledged the amount to be distributed to it under this section in payment of a loan agreement with the North Carolina Solid Waste Management Capital Projects Financing Agency.  A county or municipality that has pledged amounts distributed under this section in payment of a loan agreement with the Agency may apply the amount the loan agreement requires.
(b)	For purposes of this section, the term 'municipality' includes any urban service district defined by the governing board of a consolidated city-county, and the amounts due thereby shall be distributed to the government of the consolidated city-county."
Sec. 10.  G.S. 105-164.44C, 105-213.1, 105-275.1, 105-277A, and 105-277.1A are repealed.
Part III.
Effective Dates
Sec. 11.  Part I of this act is effective upon ratification.  Part II of this act becomes effective July 1, 1991, and applies to distributions made on or after that date.  The remainder of this act is effective upon ratification.
Sec. 12.  A tax levied under Article 43 of Chapter 105 of the General Statutes, as enacted by this act, does not apply to construction materials purchased to fulfill a lump sum or unit price contract entered into or awarded before the effective date of the levy or entered into or awarded pursuant to a bid made before the effective date of the levy when the construction materials would otherwise be subject to the tax levied under Article 34 of Chapter 105 of the General Statutes.