GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

H	1 

HOUSE BILL 237

Short Title:  Restore Inventory Tax.	(Public)
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Sponsors: Representatives Beall; Gottovi, Luebke, and Stamey.
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Referred to:  Finance.
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March 13, 1991

A BILL TO BE ENTITLED
AN ACT TO REPEAL THE PROPERTY TAX EXEMPTION FOR INVENTORIES ENACTED IN 1985 AND 1987, TO REPEAL THE CORRESPONDING REIMBURSEMENTS TO LOCAL GOVERNMENTS THAT ARE PAID FROM THE GENERAL FUND, AND TO APPROPRIATE FUNDS TO THE COUNTIES TO HELP DEFRAY THE ADMINISTRATIVE EXPENSES OF THE TRANSITION TO A TAX ON INVENTORIES.
The General Assembly of North Carolina enacts:
Section 1.  Effective January 1, 1993, G.S. 105-275.1 and G. S. 105-277A are repealed.
Sec. 2.  G.S. 105-275 reads as rewritten:
"§ 105-275. Property classified and excluded from the tax base.
	The following classes of property are hereby designated special classes under authority of Article V, Sec. 2(2), of the North Carolina Constitution and shall not be listed, appraised, assessed, or taxed:
(1)	Cotton, tobacco, other farm products, goods, wares, and merchandise held or stored for shipment to any foreign country, except any such products, goods, wares, and merchandise that have been so stored for more than 48 months on the date as of which property is listed for taxation.  Such property shall be listed (by quantity only, and with a statement that it is being held for export) in the county in which it is located on the tax listing date, but shall not be assessed or taxed.  On the first tax listing date following 48 months of storage, any such property which has not been exported shall be listed, assessed, and taxed in the same manner as other taxable property.  The purpose of this classification is to encourage the development of the ports of North Carolina.
(2)	Tangible personal property that has been imported from a foreign country through a North Carolina seaport terminal and which is stored at such a terminal while awaiting further shipment – for the first 12 months of such storage. (The purpose of this classification is to encourage the development of the ports of this State.)
(3)	Real and personal property owned by nonprofit water or nonprofit sewer associations or corporations.
(4)	
	For the year following that in which grown, farm products (including crops but excluding poultry and other livestock) that:
a.	Are in unmanufactured state and
b.	Are owned by the original producer.
(5)	Vehicles that the United States government gives to veterans on account of disabilities they suffered in World War II, the Korean Conflict, or the Viet Nam Era so long as they are owned by:
a.	A person to whom a vehicle has been given by the United States government or
b.	Another person who is entitled to receive such a gift under Title 38, section 252, United States Code Annotated.
(6)	Special nuclear materials held for or in the process of manufacture, processing, or delivery by the manufacturer or processor thereof, regardless whether the manufacturer or processor owns the special nuclear materials.  The terms 'manufacture' and 'processing' do not include the use of special nuclear materials as fuel.  The term 'special nuclear materials' includes (i) uranium 233, uranium enriched in the isotope 233 or in the isotope 235; and (ii) any material artificially enriched by any of the foregoing, but not including source material.  'Source material' means any material except special nuclear material which contains by weight one twentieth of one percent (0.05%) or more of (i) uranium, (ii) thorium, or (iii) any combination thereof.  Provided however, that to qualify for this exemption no such nuclear materials shall be discharged into any river, creek or stream in North Carolina.  The classification and exclusion provided for herein shall be denied to any manufacturer, fabricator or processor who permits burial of such material in North Carolina or who permits the discharge of such nuclear materials into the air or into any river, creek or stream in North Carolina if such discharge would contravene in any way the applicable health and safety standards established and enforced by the Department of Environment, Health, and Natural Resources or the Nuclear Regulatory Commission.  The most stringent of these standards shall govern.
(7)	Real and personal property that is:
a.	Owned either by a nonprofit corporation formed under the provisions of Chapter 55A of the General Statutes or by a bona fide charitable organization, and either operated by such owning organization or leased to another such nonprofit corporation or charitable organization, and
b.	Appropriated exclusively for public parks and drives.
(8)	a.	Real and personal property that is used or, if under construction, is to be used exclusively for air cleaning or waste disposal or to abate, reduce, or prevent the pollution of air or water (including, but not limited to, waste lagoons and facilities owned by public or private utilities built and installed primarily for the purpose of providing sewer service to areas that are predominantly residential in character or areas that lie outside territory already having sewer service), if the Department of Environment, Health, and Natural Resources or a local air pollution control program for air-cleaning devices located in an area where the Environmental Management Commission has certified a local air pollution control program pursuant to G.S. 143-215.112 furnishes a certificate to the tax supervisor of the county in which the property is situated or to be situated stating that the Environmental Management Commission or local air pollution control program has found that the described property:
		1.	Has been or will be constructed or installed;
		2.	Complies with or that plans therefor which have been submitted to the Environmental Management Commission or local air pollution control program indicate that it will comply with the requirements of the Environmental Management Commission or local air pollution control program;
		3.	Is being effectively operated or will, when completed, be required to operate in accordance with the terms and conditions of the permit, certificate of approval, or other document of approval issued by the Environmental Management Commission or local air pollution control program; and
4.	Has or, when completed, will have as its primary rather than incidental purpose the reduction of water pollution resulting from the discharge of sewage and waste or the reduction of air pollution resulting from the emission of air contaminants.
		b.	Real or personal property that is used or, if under construction, is to be used exclusively for recycling or resource recovering of or from solid waste, if the Department of Environment, Health, and Natural Resources furnishes a certificate to the tax supervisor of the county in which the property is situated stating the Department of Environment, Health, and Natural Resources has found that the described property has been or will be constructed or installed, complies or will comply with the rules of the Department of Environment, Health, and Natural Resources, and has, or will have as its primary purpose recycling or resource recovering of or from solid waste.
c.	Tangible personal property that is used exclusively, or if being installed, is to be used exclusively, for the prevention or reduction of cotton dust inside a textile plant for the protection of the health of the employees of the plant, in accordance with occupational safety and health standards adopted by the State of North Carolina pursuant to Article 16 of G.S. Chapter 95. The Department of Revenue shall adopt guidelines to assist the tax supervisors in administering this exclusion.
(9) 
All cotton while subject to transmit privileges under Interstate Commerce Commission tariffs.
(10)	Personal property shipped into this State and placed in a public warehouse as intermediate consignee for the purpose of transshipment in its original form or package to the owner's customers either inside or outside the State.  No portion of a premises owned or leased by a consignor or consignee, or a subsidiary of a consignor or consignee, is a public warehouse within the meaning of this subdivision despite any licensing as such.  The purpose of this classification is to encourage the development of the State of North Carolina as a distribution center.
(11)	Personal property shipped from a point within this State and placed in a public warehouse as intermediate consignee for the purpose of transshipment in its original form or package to the owner's customers outside the State.  No portion of a premises owned or leased by a consignor or consignee, or a subsidiary of a consignor or consignee, is a public warehouse within the meaning of this subdivision despite any licensing as such.  The purpose of this classification is to encourage the development of the State of North Carolina as a distribution center.
(12)	Real property owned by a nonprofit corporation or association exclusively held and used by its owner for educational and scientific purposes as a protected natural area. (For purposes of this subdivision, the term 'protected natural area' means a nature reserve or park in which all types of wild nature, flora and fauna, and biotic communities are preserved for observation and study.)
(13)	Repealed by Session Laws 1973, c. 904.
(14)	Motor vehicles chassis belonging to nonresidents, which chassis temporarily enters the State for the purpose of having a body mounted thereon.
(15)	Upon the date on which each county's next general reappraisal of real property under the provisions of G.S. 105-286(a) becomes effective, standing timber, pulpwood, seedlings, saplings, and other forest growth. (The purpose of this classification is to encourage proper forest management practices and to develop and maintain the forest resources of the State.)
(16)	Non-business Property. – As used in this subdivision, the term 'non-business property' means personal property that is used by the owner of the property for a purpose other than the production of income and is not used in connection with a business. The term includes household furnishings, clothing, pets, lawn tools, and lawn equipment. The term does not include motor vehicles, mobile homes, aircraft, watercraft, or engines for watercraft.
(17)	Real and personal property belonging to the American Legion, Veterans of Foreign Wars, Disabled American Veterans, or to any similar veterans organizations chartered by the Congress of the United States or organized and operated on a statewide or nationwide basis, and any post or local organization thereof, when used exclusively for meeting or lodge purposes by said organization, together with such additional adjacent real property as may be necessary for the convenient and normal use of the buildings thereon. Notwithstanding the exclusive-use requirement hereinabove established, if a part of a property that otherwise meets this subdivision's requirements is used for a purpose that would require that it not be listed, appraised, assessed or taxed if the entire property were so used, that part, according to its value, shall not be listed, appraised, assessed or taxed. The fact that a building or facility is incidentally available to and patronized by the general public, so far as there is no material amount of business or patronage with the general public, shall not defeat the classification granted by this section.
(18)	Real and personal property belonging to the Grand Lodge of Ancient, Free and Accepted Masons of North Carolina, the Prince Hall Masonic Grand Lodge of North Carolina, their subordinate lodges and appendant bodies including the Ancient and Arabic Order Nobles of the Mystic Shrine, and the Ancient Egyptian Order Nobles of the Mystic Shrine, when used exclusively for meeting or lodge purposes by said organization, together with such additional adjacent real property as may be necessary for the convenient normal use of the buildings thereon. Notwithstanding the exclusive-use requirement hereinabove established, if a part of a property that otherwise meets this subdivision's requirements is used for a purpose that would require that it not be listed, appraised, assessed or taxed if the entire property were so used, that part, according to its value, shall not be listed, appraised, assessed or taxed. The fact that a building or facility is incidentally available to and patronized by the general public, so far as there is no material amount of business or patronage with the general public, shall not defeat the classification granted by this section.
(19)	Real and personal property belonging to the Loyal Order of Moose, the Benevolent and Protective Order of Elks, the Knights of Pythias, the Odd Fellows and similar fraternal or civic orders and organizations operated for nonprofit benevolent, patriotic, historical, charitable, or civic purposes, when used exclusively for meeting or lodge purposes by said organization, together with such additional adjacent real property as may be necessary for the convenient normal use of the buildings thereon. Notwithstanding the exclusive-use requirement hereinabove established, if a part of a property that otherwise meets this subdivision's requirements is used for a purpose that would require that it not be listed, appraised, assessed or taxed if the entire property were so used, that part, according to its value shall not be listed, appraised, assessed or taxed. The fact that a building or facility is incidentally available to and patronized by the general public, so far as there is no material amount of business or patronage with the general public, shall not defeat the classification granted by this section. Nothing in this section shall be construed so as to include social fraternities, sororities, and similar college, university, or high school organizations in the classification for exclusion from ad valorem taxes.
(20)	Real and personal property belonging to Goodwill Industries and other charitable organizations organized for the training and rehabilitation of disabled persons when used exclusively for training and rehabilitation, including commercial activities directly related to such training and rehabilitation.
(21)	The first thirty-eight thousand dollars ($38,000) in assessed value of housing together with the necessary land therefor, owned and used as a residence by a disabled veteran who receives benefits under Title 38, section 801, United States Code Annotated. This exclusion shall be the total amount of the exclusion applicable to such property.
(22)	 
	All nursery stock, herbaceous and nonherbaceous (annual, biennial, or perennial plants including rooted cuttings) in the ground, pots, hothouses, greenhouses, raised beds, or containers or otherwise held by the original producer.  Provided, this exemption does not apply to pots or similar containers in which nursery stock is planted.
(23)	Tangible personal property imported from outside the United States and held in a Foreign Trade Zone for the purpose of sale, manufacture, processing, assembly, grading, cleaning, mixing or display and tangible personal property produced in the United States and held in a Foreign Trade Zone for exportation, either in its original form or as altered by any of the above processes.
(24)	Cargo containers and container chassis used for the transportation of cargo by vessels in ocean commerce.
		The term 'container' applies to those nondisposable receptacles of a permanent character and strong enough for repeated use and specially designed to facilitate the carriage of goods, by one or more modes of transport, one of which shall be by ocean vessels, without intermediate reloadings and fitted with devices permitting its ready handling particularly in the transfer from one transport mode to another.
(25)	Tangible personal property shipped into this State for the purpose of repair, alteration, maintenance or servicing and reshipment to the owner outside this State.  This classification does not include raw materials, supplies, or goods in process of manufacture in this State.
(26)	For the tax year immediately following transfer of title, tangible personal property manufactured in this State for the account of a nonresident customer and held by the manufacturer for shipment. For the purpose of this subdivision, the term 'nonresident' means a taxpayer having no place of business in North Carolina.
(27), (28) Repealed by Session Laws 1983, c. 643, s. 1.
(29)	Real property and easements wholly and exclusively held and used for nonprofit historic preservation purposes by a nonprofit historical association or institution, including real property owned by a nonprofit corporation organized for historic preservation purposes and held by its owner exclusively for sale under an historic preservation agreement prepared and recorded under the provisions of the Conservation and Historic Preservation Agreements Act, Article 4, Chapter 121 of the General Statutes of North Carolina.
(30)	
	Works of fine art created by an individual artist, other than in the course of employment, and either held by the artist for sale in the regular course of business as an artist or consigned by the artist to another person for sale.  As used in this subdivision, 'work of fine art' means an original art work that is:
a.	A visual rendition, including a painting, drawing, sculpture, mosaic, or photograph;
b.	A work of calligraphy;
c.	A work of graphic art, including an etching, lithograph, offset print, or silk screen;
d.	A craft work in materials, including clay, textile, fiber, wood, metal, plastic, or glass; or
e.	A work in mixed media, including a collage or a work consisting of any combination of works included in this subdivision.
(31)	Money, whether on hand or on deposit at a bank, a credit union, a savings and loan association, or an insurance company.
(32)	Real and personal property owned by a home for the aged, sick, or infirm, that is exempt from tax under Article 4 of this Chapter, and used in the operation of that home.  The term 'home for the aged, sick, or infirm' means a self-contained community that (i) is designed for elderly residents; (ii) operates a skilled nursing facility, an intermediate care facility, or a home for the aged; (iii) includes residential dwelling units, recreational facilities, and service facilities; (iv) the charter of which provides that in the event of dissolution, its assets will revert or be conveyed to an entity organized exclusively for charitable, educational, scientific, or religious purposes, and which qualifies as an exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986; (v) is owned, operated, and managed by one of the following entities:
A.	A congregation, parish, mission, synagogue, temple, or similar local unit of a church or religious body;
B.	A conference, association, division, presbytery, diocese, district, synod, or similar unit of a church or religious body;
C.	A Masonic organization whose property is excluded from taxation pursuant to G.S. 105-275(18); or
D.	A nonprofit corporation governed by a board of directors at least a majority of whose members elected for terms commencing on or before December 31, 1987, shall have been elected or confirmed by, and all of whose members elected for terms commencing after December 31, 1987, shall be selected by, one or more entities described in A., B., or C. of this subdivision, or organized for a religious purpose as defined in G.S. 105-278.3(d)(1); and
	(vi) has an active program to generate funds through one or more sources, such as gifts, grants, trusts, bequests, endowment, or an annual giving program, to assist the home in serving persons who might not be able to reside at the home without financial assistance or subsidy.
		(35)	Severable development rights, as defined in G.S. 136-66.11(a), when severed and evidenced by a deed recorded in the office of the register of deeds pursuant to G.S. 136-66.11(c).
(36)	Real and personal property belonging to the North Carolina Low-Level Radioactive Waste Management Authority created under Chapter 104G of the General Statutes.
	(38)	Real and personal property belonging to the North Carolina Hazardous Waste Management Commission created under Chapter 130B of the General Statutes.
(39)	Real and personal property that is: (i) owned by a nonprofit corporation organized upon the request of a local government unit for the sole purpose of financing projects for public use, (ii) leased to a unit of local government whose property is exempt from taxation under G.S. 105-278.1, and (iii) used in whole or in part for a public purpose by such unit of local government.  If only part of the property is used for a public purpose, only that part is exempt from the tax. This subdivision shall not apply if any distributions are made to members, officers, or directors of the nonprofit corporation."
Sec. 3.  G.S. 105-273 reads as rewritten:
"§ 105-273. Definitions.
When used in this Subchapter (unless the context requires a different meaning):
(1)	'Abstract' means the document on which the property of a taxpayer is listed for ad valorem taxation and on which the appraised and assessed values of the property are recorded.
(2)	'Appraisal' means both the true value of property and the process by which true value is ascertained.
(3)	'Assessment' means both the tax value of property and the process by which the assessment is determined.
(4)	Repealed by Session Laws 1973, c. 695, s. 15, effective January 1, 1974.
(5)	'Collector' or 'tax collector' means any person charged with the duty of collecting taxes for a county or municipality.
(6)	'Corporation' includes nonprofit corporation and every type  of organization having capital stock represented by shares.
(7)	'Document' includes book, paper, record, statement, account, map, plat, film, picture, tape, object, instrument, and any other thing conveying information.
(8)	'Intangible personal property' means patents, copyrights, secret processes, formulae, good will, trademarks, trade brands, franchises, stocks, bonds, cash, bank deposits, notes, evidences of debt, leasehold interests in exempted real property, bills and accounts receivable, and other like  property.
(8a)	'Inventories' means goods held for sale in the regular course of business by manufacturers and retail and wholesale merchants.  As to manufacturers, the term includes raw materials, goods in process, and finished goods, as well as other materials or supplies that are consumed in manufacturing or processing, or that accompany and become a part of the sale of the property being sold.  The term also includes crops, livestock, poultry, feed used in the production of livestock and poultry, and other agricultural or horticultural products held for sale, whether in process or ready for sale.  The term does not include fuel used in manufacturing or processing, nor does it include materials or supplies not used directly in manufacturing or processing.  As to retail and wholesale merchants, the term includes, in addition to articles held for sale, packaging materials that accompany and become a part of the sale of the property being sold.
(9)	'List' or 'listing,' when used as a noun, means abstract.
(10)	Repealed by Session Laws 1987, c. 43, s. 1, effective April 2, 1987.
(10a)	'Local tax official' includes a county assessor, an assistant county assessor, a member of a county board of commissioners, a member of a county board of equalization and review, a county tax collector, and the municipal equivalents of these officials.
	 " (11)	'Municipal corporation' and 'municipality' mean city, town, incorporated village, sanitary district, rural fire protection district, rural recreation district, mosquito control district, hospital district, metropolitan sewerage district, watershed improvement district, or other district or unit of local government by or for which ad valorem taxes are levied.
(12)	'Person' and 'he' include any individual, trustee, executor, administrator, other fiduciary, corporation, unincorporated association, partnership, sole proprietorship, company, firm, or other legal entity.
(13)	'Real property,' 'real estate,' and 'land' mean not only the land itself, but also buildings, structures, improvements, and permanent fixtures thereon, and all rights and privileges belonging or in any wise appertaining thereto. These terms also means a manufactured home as defined in G.S. 143-143.9(6) if it is a multi-section residential structure (consisting of two or more sections); has the moving hitch, wheels, and axles removed; and is placed upon a permanent enclosed foundation on land owned by the owner of the manufactured home.
	 " (14)	'Tangible personal property' means all personal property that is not intangible and that is not permanently affixed to real property.
(15)	'Tax' and 'taxes' include the principal amount of any tax,  costs, penalties, and interest imposed upon property tax or dog license tax.
(16)	'Taxing unit' means a county or municipality authorized to levy ad valorem property taxes.
(17)	'Taxpayer' means any person whose property is subject to ad valorem property taxation by any county or municipality and any person who, under the terms of this Subchapter, has a duty to list property for taxation.
(18)	'Valuation' means appraisal and assessment.
	 " ."
Sec. 4.  G.S. 105-277(a), (b), (c), and (e), as repealed by Section 9 of Chapter 813 of the 1987 Session Laws, are reenacted.
Sec. 5.  G.S. 105-285(c) and G.S. 105-289.1, as repealed by Section 12 of Chapter 813 of the 1987 Session Laws, are reenacted.
Sec. 6.  G.S. 105-163.02 reads as rewritten:
"§ 105-163.02. Definitions.
For the purposes of this Division and unless otherwise required by the context:
(1)	 
'Book value' of qualifying inventories means the net amount at which qualifying inventories are valued for North Carolina income tax purposes, and the date of such valuation shall be the first day of the taxable year.
(2)	'Cost of manufacturing' means the costs of producing the goods manufactured in this State.  The term shall be interpreted so as to conform to generally accepted accounting practices in the industry.  Unless in the opinion of the Secretary of Revenue the peculiar circumstances in any case justify a different meaning, the term shall be construed to include as elements of cost the following:  the cost of materials put into production; the cost of labor applied to material conversions; and all of the other costs for services and facilities utilized in manufacturing, including factory superintendence, indirect labor, depreciation and other costs relating to factory buildings, machinery and equipment, factory supplies used, patent amortization, and factory light, heat, and power.  The 'cost of materials put into production' means the inventories of raw materials and goods in process of manufacture at the beginning of the taxable year plus purchases of raw materials, less inventories of raw materials and goods in process of manufacture at the end of the taxable year.  The 'cost of manufacturing' shall be for the taxable year.  Where the 'taxable year' of the taxpayer is less than 12 months (or 52 weeks) the taxpayer shall annualize the cost of manufacturing.  'Annualize' means the projection of an annual amount or rate ordinarily expressed in terms of a year, where the amount or rate to be projected has been experienced for less than a year, as in the case of a manufacturer having a short taxable year due to changing the taxable year or due to commencing operations in this State during the taxable year.
(3)	'Establishment' means a mill or plant in North Carolina at which manufacturing operations are performed, and which constitutes an economic unit at a single physical location or site, unless otherwise indicated herein.  The word 'establishment' includes along with a manufacturing plant all sites in North Carolina where raw materials and/or partially manufactured goods are stored away from the manufacturing plant for use in the plant.  Two or more plants engaged in different steps of a manufacturing process constitute an establishment if goods must move through each plant before becoming a finished product even though the plants are at different sites in North Carolina.  Two or more plants having a common ownership in North Carolina located at different sites and producing the same class or type of products may be treated at the option of the taxpayer as a single establishment for the purposes of this Division.
(4)	'Finished goods' means those articles of tangible personal property which are the products of the manufacturing process after all production in North Carolina by the manufacturer in this State has been completed and the products are being held for sale or are being held for shipment out of this State for further manufacture by the same manufacturer in another state before they are ready for sale.
(5)	'Goods in process of manufacture' means materials to which manufacturing services have been applied by the manufacturer in this State and which do not meet the definition of finished goods in (4) above.
(6)	'Inventories' has the meaning provided in G.S. 105-273(8a).
(7)	'Manufacturer' means a taxpayer taxable under Article 4 of this Chapter whose business would cause the taxpayer to be classified as a manufacturer in the Standard Industrial Classification Manual whose publication by the Executive Office of the President, Office of Management and Budget, occurred next before January 1, 1978; provided, however, that fabricating processors whose cost of materials consumed is seventy-five percent (75%) or more of their cost of manufacturing shall not be deemed to be manufacturers under this Division.  Costs incurred in performance of construction activities by a fabricator shall not be included in cost of manufacturing for purposes of this Division.
(8)	'Property taxes' means the principal amount of taxes levied and assessed by a taxing unit under the Machinery Act. It does not include costs, penalties, interest, or other charges that may be added to the principal amount.
	(9)	' Qualifying inventories' means inventories of raw materials and goods in process of manufacture in this State which have been assessed for property tax purposes.  The book value of qualifying inventories shall be determined as of the valuation date established for inventories for property tax purposes, pursuant to G.S. 105-285(c), which inventories give rise to the total property tax used in computing the manufacturer's income tax credit allowed under G.S. 105-163.03(a).
(10)	'Raw materials' means those articles of tangible personal property which are held by a manufacturer for use as ingredient or component parts of finished goods to be manufactured by the manufacturer in North Carolina.
(11)	'Taxable year' shall have the meaning provided in G.S. 105-134.1 and G.S. 105-130.2(5), as appropriate.  In addition, 'taxable year' shall be that taxable year for which a manufacturer files an income tax return upon which the tax credit provided for under this Division is claimed.
(12)	Repealed by Session Laws 1985, c. 656, s. 15, effective January 1, 1986.
(13)	'Taxpayer' means an individual, a person, a firm, a corporation, or other entity subject to income tax under this Article.
(14)	'Taxing unit' has the same meaning as in G.S. 105-273(16)."
Sec. 7.  G.S. 105-163.03, as repealed by Section 3 of Chapter 622 of the 1987 Session Laws, is reenacted.
Sec. 8.  G.S. 105-163.05, as repealed by Section 5 of Chapter 37 of the 1989 Session Laws, is reenacted.
Sec. 9.  G.S. 105-315(a) reads as rewritten:
"(a)	As of January 1, every person having custody of taxable tangible personal property that has been entrusted to him by another for storage, sale, renting, or any other business purpose shall furnish the appropriate assessor the reports required by subdivisions (a)(1) and (a)(2), below:
(1)	 
For farm products that are owned by the original producer and that were produced in a county of this State other than that in which the products are situated, there shall be furnished to the assessor of the county in which the products were produced a statement showing the name of the producer, a description of the property, the quantity of the property, and the amount of money, if any, advanced against the products by the person having custody of them.
(2)	For all other tangible personal property, there shall be furnished to the assessor of the county in which the property is situated a statement showing the name of the owner of the property, a description of the property, the quantity of the property, and the amount of money, if any, advanced against the property by the person having custody of it.
(3)	For purposes of illustration, but not by way of limitation, the term 'person having custody of taxable tangible personal property' as used in this subsection (a) shall include warehouses, cooperative growers' and marketing associations, consignees, factors, commission merchants, and brokers."
Sec. 10.  There is appropriated from the General Fund to each county in the State the sum of $2,000 for the 1991-92 fiscal year to help defray the administrative costs involved in making the transition to a tax on inventories.
Sec. 11.  This act does not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute amended or repealed by this act before its amendment or repeal; nor does it affect the right to any refund or credit of a tax that would otherwise have been available under the amended or repealed statute before its amendment or repeal.
Sec. 12.  Section 1 of this act becomes effective January 1, 1993.  The remainder of this act is effective for taxes imposed for taxable years beginning on or after July 1, 1992.