GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	1 

SENATE BILL 574

Short Title:  Franklin School Revenue Options.	(Local)

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Sponsors: Senator Speed.

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Referred to:  Finance

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April 4, 1995

A BILL TO BE ENTITLED
AN ACT TO AUTHORIZE FRANKLIN COUNTY TO LEVY FACILITY FEES, AN ADDITIONAL SALES AND USE TAX OF ONE PERCENT, AND A TWO PERCENT REAL ESTATE TRANSFER TAX, SUBJECT TO APPROVAL BY THE VOTERS OF THE COUNTY, TO GENERATE FUNDS FOR PUBLIC SCHOOL CAPITAL NEEDS.
The General Assembly of North Carolina enacts:
Section 1.  This act applies only to Franklin County.
PART I
LOCAL SALES TAX
Sec. 1.1.  Subchapter VIII of Chapter 105 of the General Statutes is amended by adding a new Article to read:
                            "ARTICLE 43.
"Second One-Cent (1¢) Local Government
Sales and Use Tax.
"§ 105-505.  Short title.
This Article shall be known as the Second One-Cent (1¢) Local Government Sales and Use Tax Act.
"§ 105-506.  Purpose.
This Article gives the counties of this State an opportunity to obtain a source of revenue with which to meet their growing public school capital needs.  It provides all counties of the State that are subject to this Article with authority to levy one percent (1%) sales and use taxes for public school capital outlay.
"§ 105-507.  Limitations.
This Article applies only to counties that levy the first one-cent (1¢) sales and use tax under Article 39 of this Chapter or under Chapter 1096 of the 1967 Session Laws, the first one-half cent (1/2¢) local sales and use tax under Article 40 of this Chapter, and the second one-half cent (1/2¢) local sales and use tax under Article 42 of this Chapter.
"§ 105-508.  County election on adoption of tax.
The board of commissioners of a county may direct the county board of elections to conduct an advisory referendum on the question of whether a local sales and use tax at the rate of one percent (1%) will be levied in accordance with this Article.  The election shall be held on a date jointly agreed upon by the two boards and shall be held in accordance with the procedures of G.S. 163-287.
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   [ ] AGAINST
One percent (1%) local sales and use taxes in addition to the current two percent (2%) local sales and use taxes to be used only for public school capital projects.'
"§ 105-509.  Levy and collection of additional taxes.
If the majority of those voting in a referendum held pursuant to this Article vote for the levy of the tax, the board of commissioners of the county may levy one percent (1%) 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'.
"§ 105-510.  Distribution and use of additional taxes.
The Secretary shall, on a quarterly basis, distribute to each taxing county the net proceeds of the tax levied under this Article by that county.  If the Secretary collects taxes under this Article in a month and the taxes cannot be identified as being attributable to a particular taxing county, the Secretary shall allocate these taxes among the taxing counties in proportion to the amount of taxes collected in each county under this Article in that month and shall include them in the quarterly distribution.  A county may use the proceeds of a tax levied under this Article only for public school capital outlay purposes and to retire debt incurred for these purposes."
Sec. 1.2.  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 43 of Chapter 105 of the General Statutes.
PART II
FACILITY FEES
Sec. 2.1.  County election on facility fees.
The Franklin County Board of Commissioners may direct the county board of elections to conduct an advisory referendum on the question of whether the county may by ordinance impose and collect facility fees, in an amount not to exceed eight hundred fifty dollars ($850.00), to be paid for each new residential unit or development to help defray the costs to the county of public school capital needs, including the construction, equipment, expansion, improvement, and renovation of public schools, the need for which is created in substantial part by the new residential development that takes place within the county.  The election shall be held on a date jointly agreed upon by the two boards and shall be held in accordance with the procedures of G.S. 163-287.
The form of the question to be presented on the ballot for a special election concerning the facility fees authorized by this Part shall be:
"[ ] FOR   [ ] AGAINST
Facility fees, in an amount not to exceed eight hundred fifty dollars ($850.00), to be paid for each new residential unit or development to help defray the costs to the county of public school capital needs, including the construction, equipment, expansion, improvement, and renovation of schools."
Sec. 2.2.  Imposition of facility fees.
If the majority of those voting in the referendum held pursuant to this Part vote for the imposition of facility fees, the board of commissioners of Franklin County may adopt ordinances, pursuant to this Part, to impose and collect facility fees, in an amount not to exceed eight hundred fifty dollars ($850.00), to be paid for each new residential unit or development to help defray the costs to the county of public school capital needs, including the construction, equipment, expansion, improvement, and renovation of schools, the need for which is created in substantial part by the new residential development that takes place within the county.
Sec. 2.3.  Scope of facility fees.
(a)	A county may by ordinance impose and collect facility fees, in an amount not to exceed eight hundred fifty dollars ($850.00), to be paid for each new residential unit or development to help defray the costs to the county of public school capital needs, including the construction, equipment, expansion, improvement, and renovation of schools, the need for which is created in substantial part by the new residential development that takes place within the county.
(b)	An ordinance authorized by this act shall apply everywhere within the county, including within the corporate limits and extraterritorial planning jurisdiction of any city, town, or municipal corporation within the county.
(c)	In establishing the amount of facility fees to be imposed, the county shall endeavor to approach the objective of having each new residential unit or development contribute to a public school capital costs reserve fund an amount of revenue that bears a reasonable relationship to that residential unit's or development's fair share of the costs to the county of public school capital needs that are needed in part because of that residential unit or development.  In fulfilling this objective, the board of county commissioners shall, among other steps and actions:
(1)	Estimate the total costs of public school capital needs required during a reasonable planning period not to exceed 20 years.  The board of county commissioners may divide the county into two or more districts and estimate the costs of public school capital needs within each district.  The facility fees imposed may be different in different districts, based upon differing public school capital needs among the districts.
(2)	Establish a method of imposing facility fees that fairly and objectively apportions the total costs of public school capital needs that are to be borne by those paying the facility fee.  By way of illustration, and without limitation:
a.	A facility fee may be imposed on each new residential unit; or
b.	The amount of facility fees may be related to the size of the development, i.e., the number of houses, the anticipated number of students expected from the development according to recognized estimates, and the costs to the county of public school capital needs associated with the development.
(d)	An ordinance adopted under this Part shall state when in the process of development approval and construction facility fees shall be paid and by whom.  By way of illustration, and without limitation, the ordinance may provide that an applicant for a building permit shall submit the facility fee along with the permit application and that building permits shall not be issued until the facility fee has been paid.
(e)  Facility fees collected by the county shall be deposited in a Public School Capital Costs Reserve Fund established pursuant to Part 2, Article 3 of Chapter 159 of the General Statutes.  The funds may be expended only on the costs to the county of public school capital needs.
(f)  In order to provide that facility fees paid by a particular residential unit or development are expended on public school capital needs related to that unit or development, the county may establish within the county two or more districts or zones, and facility fees generated by units or developments within those districts or zones shall be spent on the public school capital needs within those districts or zones.
(g)  An ordinance adopted under this act may provide that any person aggrieved by a decision regarding a facility fee may appeal to the county board of adjustment.  If the ordinance establishes an appeal procedure, it shall state the time within which the appeal must be taken to the board of adjustment, the possible grounds for an appeal, the board's authority in the matter, whether the fee must be paid prior to resolution of the appeal, and other procedural or substantive matters related to appeals.
(h)  Any decision of the board of adjustment shall be subject to review by the superior court within the county by proceedings in the nature of certiorari in the same manner as provided in G.S. 153A-345(e).
(i)  If an ordinance adopted under this act is declared to be invalid by any court of competent jurisdiction, then any facility fee collected thereunder shall be refunded to the person paying them together with interest at the rate established under G.S. 105-241.1, being the same rate paid by the Secretary of Revenue on refunds for tax overpayments.
(j)  Any action contesting the validity of an ordinance adopted pursuant to this act shall be commenced not later than nine months after the facility fee is paid.  Any action seeking to recover a facility fee shall be commenced not later than nine months after the facility fee is paid.
PART III
REAL ESTATE TRANSFER TAX
Sec. 3.1.  Chapter 105 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 8F.
"Local Government Excise Stamp Tax on Conveyances.
"§ 105-228.50.  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.
"§ 105-228.51.  Levy of county conveyance tax.
(a)	The board of commissioners of a county may direct the county board of elections to conduct an advisory referendum on the question of whether an excise tax on instruments conveying interests in real property located in the county will be levied in accordance with this Article.  The election shall be held on a date agreed upon by the two boards, and shall be held in accordance with the procedures of G.S. 163-287.
The form of the question to be presented on a ballot for a special election concerning the levy of the tax authorized by this Article shall be:
'[  ] FOR      [  ] AGAINST
Local real property transfer tax at a rate not to exceed two dollars ($2.00) on each one hundred dollars ($100.00) of value or consideration, to be used only for public school capital outlay purposes.'
(b)	If the majority of those voting in a referendum held pursuant to this Article vote for the levy of the tax, the board of commissioners of the county may, by resolution, levy an excise tax on instruments conveying interests in real property located in that county at a rate not to exceed two dollars ($2.00) on each one hundred dollars ($100.00) of the consideration or value, whichever is greater, of the interest conveyed, including the value of any lien or encumbrance remaining on the property at the time of sale.  This tax is in addition to the tax levied by Article 8E of this Chapter.  Upon adoption of the resolution, the board of commissioners shall send a certified copy to the register of deeds of the county.
Collection of the tax, and liability therefor, shall begin and continue only on and after the first day of a calendar month set by the board of county commissioners in the resolution levying the tax, which may not be earlier than the first day of the second succeeding calendar month after the date the resolution is adopted.
"§ 105-228.52.  Scope and administration of tax.
A tax levied under this Article does not apply to transfers exempt pursuant to G.S. 105-228.28 or G.S. 105-228.29 from the tax levied by Article 8E of this Chapter.  A tax levied under this Article applies to transfers of interests in real property located within the taxing county, except that if the property is located in two or more counties, a transfer of an interest in the property is taxable only by the county in which the greater part of the property, with respect to value, lies.
A tax levied under this Article is payable by the transferor of the interest.  The provisions of G.S. 105-228.31 through G.S. 105-228.36 apply to a tax levied under this Article.
"§ 105-228.53.  Use of proceeds.
A county may use taxes collected under this Article only for public school capital outlay purposes and to retire debt incurred for these purposes.
"§ 105-228.54.  Repeal or reduction of tax.
A county may, by resolution, repeal or reduce the rate of a tax levied under this Article.  Repeal or reduction of the tax shall become effective on the first day of a month and may not become effective until the end of the fiscal year in which the repeal or reduction resolution was adopted.  Repeal of a conveyance tax, or reduction of its rate, under this Article does not affect a liability for a tax that attached before the effective date of the repeal or reduction, nor does it affect a right to a refund of a tax that accrued before the effective date of the repeal or reduction."
PART IV
EFFECTIVE DATE
Sec. 4.  This act is effective upon ratification.