GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

H	1 

HOUSE BILL 916

Short Title:  Restore Local Govt. Earmarking.	(Public)
─────────────────────────────────────── 
Sponsors: Representatives Barnes; Gottovi and Warner.
─────────────────────────────────────── 
Referred to:  Appropriations.
─────────────────────────────────────── 

April 18, 1991

A BILL TO BE ENTITLED
AN ACT TO PROVIDE THAT DISTRIBUTIONS AND REIMBURSEMENTS TO LOCAL GOVERNMENTS SHALL BE PROVIDED BY EARMARKING RATHER THAN BY APPROPRIATION.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-113.82 reads as rewritten:
"§ 105-113.82.  Distribution of part of beer and wine taxes.
(a)	Amount, Method. –The Secretary shall annually distribute the following percentages of the net amount of excise taxes collected during the period that begins the preceding October 1 and ends September 30 on the sale of malt beverages and wine, less the amount of the net proceeds credited to the Department of Agriculture under G.S 105-113.81A, to the counties and cities in which the retail sale of these beverages is authorized:
(1)	Of the tax on malt beverages levied under G.S. 105-113.80(a), twenty-three and three-fourths percent (23 3/4%);
(2)	Of the tax on unfortified wine levied under G.S. 105-113.80(b), sixty-two percent (62%); and
(3)	Of the tax on fortified wine levied under G.S. 105-113.80(b), twenty-two percent (22%).
If malt beverages, unfortified wine, or fortified wine may be licensed to be sold at retail in both a county and a city located in the county, both the county and city shall receive a portion of the amount of excise tax to be distributed, that portion to be determined on the basis of population. If one of these beverages may be licensed to be sold at retail in a city located in a county in which the sale of the beverage is otherwise prohibited, only the city shall receive a portion of the amount of excise tax to be distributed, that portion to be determined on the basis of population. The amounts to be distributed under subdivisions (1), (2), and (3) shall be computed separately.
(b)	Reduction in Amount Distributed. – Where the sale of malt beverages, unfortified wine, or fortified wine is prohibited in a defined area of a city or county in which the sale of the beverage is authorized, the amount that would otherwise be distributed to the city or county on the basis of population under subsection (a) shall be reduced in the same ratio that the area of the defined area bears to the total area of the city or county, unless the defined area is a city. If the defined area in a county is a city, the reduction in the amount that would otherwise be distributed to the county under subsection (a) shall be based on population instead of area.  All reductions shall be retained by the State.
	(c)	Exception. – Notwithstanding subsection (a), in a county in which ABC stores have been established by petition, excise tax revenue shall be distributed as though the entire county had approved the retail sale of a beverage whose retail sale is authorized in part of the county.
(d)	Time. – The distribution shall be made within 60 days after September 30 of each year.
(e)	Population Estimates. – To determine the population of a city or county for purposes of the distribution required by this section, the Secretary shall use the most recent annual estimate of population certified by the State Budget Officer.
(f)	City Defined. – As used in this section, the term 'city' means a city as defined in G.S. 153A-1(1) or an urban service district defined by the governing body of a consolidated city-county.
(g)	Use of Funds. – Funds distributed to a county or city under this section may be used for any public purpose.
	."
Sec. 2.  G.S. 105-116(d) reads as rewritten:
"(d)	Distribution.  Each year, the Secretary of Revenue shall distribute to each municipality from collections received under this section an amount that equals three and nine hundredths percent (3.09%) of the taxable gross receipts derived, from April 1 of the preceding fiscal year to the following March 31, by an electric power company and a natural gas company from sales within the municipality of the commodities and services described in subsection (a).  The Secretary of Revenue shall distribute the amount to a municipality in quarterly installments on or before September 15, December 15, March 15, and June 15 based on the taxable gross receipts derived within the municipality during the preceding calendar quarter.  If a company's report does not state the company's taxable gross receipts derived within a municipality, the Secretary of Revenue shall determine a practical method of allocating part of the company's taxable gross receipts to the municipality.  Before distributing an amount under this subsection, the Secretary of Revenue shall certify the amount to be distributed to the State Controller.  
As used in this subsection, the term 'municipality' includes an urban service district defined by the governing board of a consolidated city-county.  The amount due an urban service district shall be distributed to the governing board of the consolidated city-county."
Sec. 3.  G.S. 105-120(c) reads as rewritten:
"(c)	Distribution.  Each year, the Secretary of Revenue shall distribute to each municipality from collections received under this section an amount that equals three and nine hundredths percent (3.09%) of the taxable gross receipts derived, from April 1 of the preceding fiscal year to the following March 31, from local telecommunications service provided within the municipality.  The Secretary of Revenue shall distribute the amount to a municipality in quarterly installments on or before September 15, December 15, March 15, and June 15 based on the taxable gross receipts derived within the municipality during the preceding calendar quarter.  If a company's report does not state the company's taxable gross receipts derived within a municipality, the Secretary of Revenue shall determine a practical method of allocating part of the company's taxable gross receipts to the municipality.  Before distributing an amount under this subsection, the Secretary of Revenue shall certify the amount to be distributed to the State Controller.  
As used in this subsection, the term 'municipality' includes an urban service district defined by the governing board of a consolidated city-county.  The amount due an urban service district shall be distributed to the governing board of the consolidated city-county."
Sec. 4.  G.S. 105-164.44C reads as rewritten:
"§ 105-164.44C. Reimbursement for sales taxes on food stamp foods and supplemental foods.
As soon as practicable after July 1 of each year, the Secretary shall determine from available information the amount of local sales taxes that would have been collected in each county during the preceding fiscal year on foods purchased with food stamp coupons or supplemental food instruments in the county, had these foods not been exempt from tax under G.S. 105-164.13(38).  The Secretary shall then distribute the amounts determined to be due each county between the county and the cities located in the county in accordance with the method by which local sales and use taxes are distributed in that county.  In order to pay for the reimbursement under this section and the cost to the Department of Revenue for administering the reimbursement, the Secretary shall draw from collections received under Article 2B of this Chapter an amount equal to the amount of the reimbursement and the cost of administration."
Sec. 5.  G.S. 105-213 reads as rewritten:
"§ 105-213.  Distribution of taxes and reimbursement to counties and municipalities; use of funds distributed.
(a)	The Secretary shall annually distribute to counties and municipalities the net amount of revenue collected under this Article during the preceding fiscal year, plus an amount equal to forty percent (40%) of the tax collected on accounts receivable during the preceding fiscal year and 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 distribution shall be made by August 30 of each year.  
To make the distribution, the Secretary of Revenue shall keep a separate record by counties of the taxes collected under this Article and shall allocate the net amount of taxes collected under this Article, less the deductions enumerated above, to the counties according to the county in which the taxes were collected.  The Secretary shall then increase the amount allocable to each county by a sum equal to forty percent (40%) of the amount of tax on accounts receivable allocated to the county on the basis of collections.  To pay for this increase, the Secretary shall draw an amount equal to the increase from collections received under Division II of Article 4 of this Chapter.  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.
	The Secretary 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.
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 make the distributions provided 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 making the distribution provided 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. 6.  G.S. 105-213.1 reads as rewritten:
"§ 105-213.1.  Additional distribution to counties and municipalities.
(a)	Distribution. – As soon as practicable after July 1 of 1986, the Secretary of Revenue shall allocate for distribution to each county and the municipalities located in the county the amount allocated to that county from taxes levied under G.S. 105-199, 105-200, and 105-205 for the last taxable year in which these taxes were levied, plus or minus a sum that equals the product of this amount and the percentage by which State disposable personal income has increased or decreased during the most recent 12-month period for which State personal income data has been compiled by the Bureau of Economic Analysis of the United States Department of Commerce.
Thereafter, by August 30 of each year, the Secretary shall allocate to each county the amount of funds allocated to the county under this section the preceding year, plus or minus a sum that equals the product of this amount and the percentage by which State disposable personal income has increased or decreased during the most recent 12-month period for which State personal income data has been compiled by the Bureau of Economic Analysis of the United States Department of Commerce.
Amounts allocated to a county under this section shall in turn be divided and distributed between the county and the municipalities located in the county in accordance with the method of allocating intangible tax revenue between a county and the municipalities located in the county provided in G.S. 105-213.
(b)	Restrictions on Use. – Amounts distributed to a county or a municipality under this section are subject to the same restrictions as amounts distributed under G.S. 105-213.
(c)	Municipality Defined. – As used in this section, the term 'municipality' has the same meaning as in G.S. 105-213.
(d)	Source. –Amounts distributed under this section shall be drawn from collections received under Division II of Article 4 of this Chapter."
Sec. 7.  G.S. 105-275.1(e) reads as rewritten:
"(e)	Source of Funds. – To pay for the distribution required by this section and the cost to the Department of Revenue of making the distribution, the Secretary of Revenue shall draw from collections received under Division I of Article 4 of this Chapter an amount equal to the amount distributed and the cost of making the distribution."
Sec. 8.  G.S. 105-277A(f) reads as rewritten:
"(f)	Source of Funds. –To pay for the distribution required by this section and the cost of making the 
	distribution, the Secretary shall draw from collections received under Article 5 of this Chapter an amount equal to the amount distributed and the cost of making the distribution."
Sec. 9.  G.S. 105-277.1A(f) reads as rewritten:
	"(f)  In order to pay for the reimbursement under this section and the cost to the Department of Revenue of administering the reimbursement, the Secretary of Revenue shall draw from collections received under Articles 2A and 2C of this Chapter an amount equal to the reimbursement and the cost of administration."
Sec. 10.  Taxes collected under G.S. 105-113.80, 105-116, and 105-120 and under Article 7 of Chapter 105 of the General Statutes on or after the effective date of this act that are to be distributed to local governments shall be placed in a trust and agency fund and reserved for the required distributions.
Sec. 11.  Section 16 of Chapter 813 of the 1989 Session Laws is repealed.
Sec. 12.  This act becomes effective July 1, 1991.